China plans to propose reforms of the WTO, Chinese envoy to the global trade body Zhang Xiangchen (張向晨) said, while warning member states against seeing reform as a chance to put Beijing in a straitjacket.
Zhang was speaking at a lunch during a WTO conference in Paris on Friday, where diplomats and officials discussed ideas about reforming the organization, largely driven by US complaints that the WTO has failed to police suspected Chinese rule-breaking.
With support from Brussels and Tokyo, Washington wants the WTO to crack down on subsidies for state-backed enterprises, overcapacity in steel and other basic industries, and on the practice of forcing investors to hand over valuable technology.
China is its chief suspect on all three counts.
However, the US has parted with its allies by blocking appointments to the WTO’s Appellate Body, whose judges it blames for hampering the US war on unfair trade practices.
The rest of the WTO fears the US is undermining a global check on protectionism.
The EU and Canada have launched reform initiatives to deal with the US’ concerns.
Zhang said China had decided to cosponsor the EU’s proposal on reforming the Appellate Body, and he and US Ambassador to the WTO Dennis Shea were members of a high-level working group that China and the EU had set up.
“We will also put forward China’s WTO reform proposal soon,” he said, according to a copy of his remarks provided to reporters.
Zhang said he had listened carefully and humbly to comments and complaints about China at the Paris conference.
“We will study them carefully, and to see if some of them could be taken into account in the process of domestic institutional reform,” he said.
China is willing to discuss the root causes of problems such as excess capacity, but it would not have views forced upon it, he said, adding that the problem needed to be correctly diagnosed before a rush to make prescriptions.
The WTO needed reform because it was not keeping up with changes in business, it was losing the battle against unilateralism and protectionism, and it had not made any meaningful cut in rich nations’ agricultural subsidies, he said.
WTO reform should liberalize trade and facilitate investment, but step-by-step and without reinventing the wheel or “moonshot targets,” he said, adding that the global body must not be used to suit particular nations’ needs.
“Excuse me for being a bit blunt here, but if someone wishes, in the name of reform, put China in a tailor-made straitjacket of trade rules to constrain China’s development, I think they will be very much disappointed,” he said.
“If it is a real reform, we’ll go ahead with it, if it is a trap, it’s best for all of us to stay away from it,” Zhang said.
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