4
GENERAL INTRODUCTION
China s accession into the World Trade Organization (WTO)1 represents a desirable
outcome for the worldwide market. It is a milestone2 not only for China (zhongguo),
but for the entire global economy, and it is a goal achieved after nearly fifteen years
of exhausting negotiations carrying many legal, political and social implications for
all parties.3 China was finally able to convince WTO members that without China, the
WTO is only partially a worldwide trade organization.4 The road to the signature of
the final agreement of accession was long,5 but these difficulties pale in comparison to
the problems that have not yet been tackled in terms of achieving real implementation
of its provisions throughout the territory of the People s Republic of China (PRC).6
1
For an analysis of the transition from GATT to WTO, Robert HUDEC, The GATT Legal System and
World Trade Diplomacy, Butterworth Legal Publishers, Salem, NH 1993; Giorgio SACERDOTI, La
trasformazione del GATT nell Organizzazione mondiale del commercio , (1995) Diritto del
commercio internazionale at 73; Robert HUDEC, Enforcing International Trade Law: The Evolution of
the Modern GATT Legal System, 1993, Butterworth Legal Publishers, Salem NH 1993; Gabrielle
MARCEAU, Transition from GATT to the WTO: A Most Pragmatic Operation , (1995) 29 Journal of
World Trade at 147; John H. JACKSON, World Trade and the Law of GATT, Bobbs-Merrill,
Indianapolis 1969; David LUFF, Le droit de l Organisation mondiale du commerce. Analyse critique,
Bruylant, Bruxelles 2004, pp. 771-775. See also Paolo PICONE and Aldo LIGUSTRO, Diritto
dell Organizzazione Mondiale del Commercio , CEDAM, Padova, 2004; Giorgio SACERDOTI, Profili
istituzionali dell OMC e principi base degli accordi di settore , in Societ Italiana di Diritto
Internazionale, Diritto e organizzazione del commercio internazionale dopo la creazione della
Organizzazione mondiale del Commercio, Editoriale Scientifica, Napoli 1998, pp. 1-20; Marcella
DISTEFANO, Soluzione delle controversie nell OMC e diritto internazionale, CEDAM, Padova 2001;
Giovanna ADINOLFI, L Organizzazione mondiale del commercio. Profili istituzionali e normativi,
CEDAM, Padova 2001; Paolo PICONE and Giorgio SACERDOTI, Diritto internazionale
dell economia , F. Angeli, Milano 1991; Gabriella VENTURINI, L accordo generale sulle tariffe
doganali ed il commercio, GiuffrŁ, Milano 2004; Piet EECKHOUT, External Relations of the
European Union, Legal and Constitutional Foundations, Oxford University Press, Oxford 2004
2
Robert HERZSTEIN, Is China Ready for the WTO Rigors? , (1999) Publication of the Center for
Security Policy, No. 99 F-33. Available: http://www.security-policy.org/papers/1999/99-F33.html
3
See generally, Karen HALVERSON, China s WTO Accession : Economic, Legal, and Political
Implications , (Spring 2004) 27 Boston College International and Comparative Law Review; Alan
ALEXANDROFF, Concluding China s Accession to the W TO: the U.S. Congress and Permanent
Most Favored Nation Status for China , (1998-1999) 3 UCLA Journal of International Law & Foreign
Affairs at 25
4
WTO Ministerial Conference Approves China s Acces sion , World Trade Organization, Press
Release, 10 November 2001. Available: http://www.wto.org/english/news_e/pres01_e/pr252_e.htm
(last visited: 20-05-04). James FEINERMAN, China s Quest to Enter the GATT/WTO , (1996) 90
American Society of International Law Procedure at 402: PRC diplomats have been lobbying the
GATT intensively since the early 1980s to gain admission . See also Maria WEBER, Il miracolo
cinese : perchØ bisogna prendere la Cina sul serio, Il Mulino, Bologna 2003, pp. 83-84 ; Leila
CHOUKROUNE, Chine et OMC: l Øtat de droit par l ouverture au commerce international? , (2002) 6
Revue de droit des affaires internationales at 655
5
Raj BHALA, Enter the Dragon: An Essay on China s WTO Accession Saga , (1999-2000) 15
American University International Law Review at 1471
6
Donald C. CLARKE, China s Legal System and the WT O: Prospects for Compliance , (Winter
2003) 2 Washington University Global Studies Law Review at 97 (hereinafter CLARKE)
5
China s accession surely presents the world trading system with opportunities, but
also poses the challenge of integrating a market with strong structural, behavioural
and cultural constraints.7
Prior to China s accession and in the subsequent debates on the implementation of
China s WTO commitments, some have focused on the market access concessions,
tariff reductions or on the liberalization requirements for the integration of China in
the world trading system. A second group of scholars, researchers and analysts have
placed more emphasis on transparency issues, such as legal and administrative
policies that China must establish to ensure equitable and efficient resolution of
commercial and trade disputes.8
While recognising the key importance of all these issues, this piece will focus on the
latter group, because these commitments will radically influence and change the
Chinese legal system. Particular attention is given to the last four years of the review
and evaluation of the Chinese legal reforms through the Transitional Review
Mechanism (TRM),9 in view of complying with the WTO transparency commitments.
China has to become increasingly aware of the new system to which it has become a
member. This system implies state international liability in the event of non-
compliance with its obligations, such as respecting transparency requirements and
WTO legal and administrative policies.
In the opinion of the present author, the most relevant obstacle to an effective
implementation of the WTO and bilateral agreements is the problem of internal
7
Several members of the Committee decided to write analytical papers about China s accession. See
John H. JACKSON, The Institutional Ramifications of China s Accession to the WTO , in Frederick
M. ABBOTT, China in the World Trading System: Defining the Principles of Engagement, Kluwer
Law International, The Hague 1998. For an overview of other challenges for the WTO after ten years
from its foundation, see generally Gabriella VENTURINI, Giuseppe COSCIA and Michele
VELLANO, Le nuove sfide per l OMC a dieci anni dalla sua istituzione, GiuffrŁ Editore, Milano 2005;
see also Rufus YERXA and Bruce WILSON (eds.), Key Issues in the WTO Dispute Settlement. The
First Ten Years, Cambridge University Press, Cambridge 2005
8
United States Government Accountability Office (GAO), Report to Congressional Committees: US-
China Trade, Opportunities to Improve U.S Government Efforts to Ensure China s Compliance with
World Trade Organization Commitments, GAO-05-53, 6 October 2004, Washington DC 2004, p. 6.
Available: http://www.gao.gov/new.items/d0553.pdf; Karen HALVERSON, China s WTO Accession:
Economic, Legal, and Political Implications , cit. at 346; Jiangyu WANG, The Rule of Law in China:
A Realistic View of the Jurisprudence, the Impact of the WTO, and the Prospects for Future
Development , (2004) Singapore Journal of Legal Studies at 374-389; Alan S. ALEXANDROFF, The
WTO s China Problem , (May 2000) 21 Policy Options 4 at 64.
Available also: http://www.irpp.org/po/archive/may00/alexandr.pdf
9
The Transitional Review Mechanism is a special multilateral mechanism for reviewing Chinese legal
system, and it was included in the Protocol of China s accession to the WTO
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barriers 10 that have distinctive features because of China s unique historical
background, including the communist period, long-standing imperial traditions11 and
feudalism. The lack of stable rules to define relations between the central authority
and the increasingly powerful local entities undermines the good intentions of the
Chinese central government.12 China will not be able to resolve its internal limits and
really fight against the local trade barriers without foreign co-operation and
involvement. The final Protocol reflects the terms and conditions of the various
Chinese bilateral agreements13 with the United States (US),14 the European Union
(EU) 15 and Canada. 16 The EU and the US 17 are taking on key roles in the
implementation of the WTO agreement for China s accession, and their monitoring
action will be essential to improve the PRC s internal juridical system. The increasing
collaboration between China and the EU, and between China and the US, could be a
10
See generally Pitman B. POTTER, The Chinese Legal System: Globalization and Local Legal
Culture, Routledge, London 2001
11
Qingjiang KONG, China s WTO Accession: Commitment s and Implications , (2000) Journal of
International Economic Law at 658
12
See generally Pitman B. POTTER, China and the WTO: Tensions Between Globalized Liberalism
and Local Culture , (1999) 32, 3 Canadian Business Law Journal
13
Fabio SPADI, L evoluzione del protocollo di acces sione della Repubblica Popolare Cinese
all Organizzazione mondiale del commercio , (2000) Diritto del commercio internazionale at 205-207
14
Chinese-US negotiations finally came to an end in November 1999 with a bilateral agreement for
China s accession. In 2000, China was recognized by the US Congress with a permanent normal trade
status. See http://www.ncfb.com/daily2001/June_11_17_2001/u.htm. For an overview of the US-China
policy for the accession of China to the WTO, see generally Alan ALEXANDROFF, Concluding
China s Accession to the WTO: the US Congress and Permanent Most Favored Nation Status for
China , cit.; as regards the US relations with China during the Clinton and Bush administrations, see
Maria WEBER, Il dragone e l aquila. Cina e USA. La vera sfida, EGEA, Milano 2005, pp. 59-84
15
The bilateral EU-China agreement on WTO was signed in Beijing on 19 May 2000. For an overview
of the results achieved by the EU in addition to the Sino-US accord, see the Sino-EU Agreement on
China s Accession to the WTO: Results of the Bilateral Negotiations .
Available: http://europa.eu.int/comm/trade/issues/bilateral/countries/china/index_en.htm
For further analysis, see Nicolas LIGNEUL, La portØe de l accord bilatØral conclu entre l Union
EuropØenne et la Chine. Le 19 Mai 2000: entre bilatØralisme et multilatØralisme , (Juillet-Aoßt 2000)
Revue de MarchØ Commun et de l Union EuropØenne at 436-440; Eberhard SANDSCHNEIDER,
China s Diplomatic Relations with the States of Eu rope , (March 2002) The China Quarterly at 33-44;
Franco ALGIERI, cit. at 64; Markus TAUBE, Economic Relations between the PRC and the States of
Europe , (March 2002) The China Quarterly at 79-105; Olivier PROST and Song Li WEI, China s
Accession to the WTO: How will this Benefit European Undertakings? , (2000-2001) 24 Fordham
International Law Journal at 554-559
16
China and Canada signed in Toronto in November 1999 their bilateral agreement on China s
accession into WTO as another step forward to the admission of China to the WTO. Canada was the
14th country to complete the WTO bilateral talks with China.
See http://www1.chinadaily.com.cn/highlights/docs/2001-04-30/2963.html
17
Congressional-Executive Commission on China, 2002 Annual Report, One Hundred Seventh
Congress, Second Session, 2nd October 2002, US Government Printing Office, Washington DC 2002,
p. 49: The US-China Relations Act of 2000 requires the USTR to submit an annual report on China s
compliance with its WTO commitments, including the findings of the Department of Commerce s
compliance monitoring program. [ ] the Senate Finan ce and House Ways and Means Committees
have tasked the General Accounting Office (GAO) with a four years project to examine China-WTO
implementation issues. Available: http://www.cecc.gov/pages/annualRpt/2002annRptEng.pdf
7
potential solution for China s internal problems and a great opportunity for the EU18
and the US. The development of bilateral trade relations, the creation of programs
with a view to exchange of expertise and know-how,19 and the dispatch of foreign
officials to China and of Chinese officials to the EU-US would facilitate the fostering
of reciprocal knowledge.20 Bilateral engagements and the multilateral forums are both
essential to bring China into full compliance with its WTO commitments.
18
See JosØ Manuel BARROSO, The EU and China: Painting a Brighter Future Together ,
SPEECH/05/444, Chinese Academy of Social Sciences, Beijing, 15 July 2005. Available:
http://europa.eu.int/rapid/pressReleasesAction.do?reference=SPEECH/05/444&format=HTML&aged=
0&language=en&guiLanguage=en ; see also Olivier PROST and Song Li WEI, cit. at 554
19
Report from the Commission to the Council and the European Parliament on the Implementation of
the Communication, Building a Comprehensive Partnership with China, COM (2000) 552 final,
Brussels, 8 September 2000 at 2.
Available : http://europa.eu.int/comm/external_relations/china/com_98/index.htm
20
Commission Policy Paper for transmission to the Council and the European Parliament, A Maturing
Partnership - Shared Interests and Challenges in EU-China Relations, COM (2003) 533 final,
Brussels, 10 September 2003 at 14.
Available: http://europa.eu.int/comm/external_relations/china/com_03_533/com_533_en.pdf
See also Report from the Commission to the Council and the European Parliament on the
Implementation of the Communication, Building a Comprehensive Partnership with China, cit. at 10