China and Russia have failed to embrace the market-oriented economic policies championed by the World Trade Organization (WTO) and are not living up to certain key commitments they made upon joining, according to the Office of the United States Trade Representative (USTR).
Referring to annual reports released late last week on each country’s compliance with WTO rules, Ambassador Robert Lighthizer said this year’s editions show “the global trading system is threatened by major economies who do not intend to open their markets to trade and participate fairly.”
He added: “This practice is incompatible with the market-based approach expressly envisioned by WTO members and contrary to the fundamental principles of the WTO.”
The reports, delivered to Congress, are required by law and assess China’s and Russia’s implementation of their respective WTO commitments. China became a member of the WTO in 2001, while Russia joined eleven years later in 2012.
But now, according to the 2017 annual report on China’s WTO compliance, almost two decades after it pledged to support the multilateral trading system of the WTO, the Chinese government “pursues a wide array of continually evolving interventionist policies and practices aimed at limiting market access for imported goods and services and foreign manufacturers and service suppliers.”
The report on China takes a “decidedly sharper tone than in previous years”, says customs and international trade law firm Sandler, Travis & Rosenberg, which highlights the claim that the US “erred in supporting China’s entry into the WTO on terms that have proven to be ineffective in securing China’s embrace of an open, market-oriented trade regime”, in its trade report published today (24 January).
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By GlobalData“China has not dismantled policies and practices incompatible with the principles of non-discrimination, market access, reciprocity, fairness, and transparency, the report states, and instead remains a state-led economy that poses “serious problems” to the US and other trading partners,” the firm notes.
So-called selected highlights by Lighthizer, meanwhile, include claims the country’s regulatory authorities do not allow US companies to make their own decisions about technology transfer but instead continue to require or pressure foreign companies to transfer technology as a condition for securing investment or other approvals.
It also notes the country uses policy tools not employed by other WTO members, including a “wide array” of state intervention and support that “restricts, takes advantage of, discriminates against, or otherwise creates disadvantages for foreign enterprises and their technologies, products, and services”; and claims China is determined to maintain the state’s leading role in the economy and to continue to pursue industrial policies that promote, guide and support domestic industries while simultaneously and actively seeking to impede, disadvantage and harm their foreign counterparts.
Meanwhile, the 2017 annual report on Russia’s WTO compliance says “so far, Russia’s actions strongly indicate that it has no intention of complying with many of the promises it made to the United States and other WTO Members.” A trend it calls “very troubling”.
“Russia has done little in 2017 to demonstrate a commitment to the principles of the WTO or to many of the specific commitments that it made in the negotiations leading to Russia’s membership in the WTO,” the report adds, noting the country’s agricultural sector continues to be one of the most challenging sectors for US exporters.
“In 2017, notwithstanding a few tariff reductions, Russia increasingly appeared to turn away from the principles of the WTO, instead turning inward through the adoption of local content policies and practices. Russia continued to rely on arbitrary behind-the-border measures and other discriminatory practices to exclude US exports.”
