After some 15 years of hard bargaining, China's formal accession to the World Trade Organization (WTO) in 2001 meant that one of the world's great economic and trading entities — now the world's number two exporter — became subject to mutually agreed international rules, regulations and practices. The tenth anniversary of China's accession to the WTO provides a particularly auspicious occasion to reflect on the current state of the global trading regime, and on China's significance in the system.
The accession of China has had a number of positive consequences for the WTO, its other members, and China itself. China's membership augmented the universality of the organization, by adding this very large and ever-expanding trade actor. Within the WTO, as well as in and around its host city of Geneva, China has proven to be a useful problem solver, although less as an individual or group leader, and more as a responsible, engaged member.
A decade following its accession, China remains somewhat of a "new kid on the block" — more of a learner than a leader. This is similar to the role it has taken in other global institutions — for example, in global financial governance bodies or even in the various "G" summits. To date, it has not shown an appetite to champion a broad array of new trade rules, especially in contentious issue areas such as state-assisted subsidies (paid directly or through the banking system), technology transfer mechanisms or exchange rate/balance of payments regimes. Rather, over the past decade, China has argued in these and other areas that it has already contributed all that it can — commensurate with its present stage of economic and social development. This stance is a continuation of China's positioning during its WTO accession negotiations, a posture that draws concern now mainly because the trade regime itself is in trouble. The WTO is deadlocked by a number of impasses between the world's traditional and emerging trade powers.
China's entry into the WTO has had a largely positive impact on global trade negotiations, in particular, on the Doha Round negotiating group on non-agricultural market access (NAMA), but also in the difficult, protracted agricultural negotiations. However, given the improved quality and range of Chinese-manufactured exports, and its expanded market share with respect to these products in most markets of the world outside the European Union, the willingness of NAMA members to seek a broad, ambitious outcome as part of the Doha Round negotiations, has been, arguably, less than it might have been had China not been a WTO member. In short, China's involvement in these discussions is key to reaching a sufficiently comprehensive agreement. But the NAMA negotiations have some way to go in order to reach conclusion, with many countries now looking to China for direction and to play a greater leadership role in helping to break the existing deadlocks.
With respect to the agricultural negotiations — the symbol of the Doha Development Round and the "deal breaker" — China's role has been key. To date, China has steadfastly supported the more than 100 other emerging and developing countries in pressing the United States and the European Union to open their agricultural sectors further in areas of particular interest to these emerging countries: wheat, cotton and sugar are the prime examples, in addition to citrus and horticultural products. Unlike 20 years ago when the United States and the European Union deal on agriculture — the so-called Blair House Agreement of December 1991 — broke the logjam leading to the conclusion of the Uruguay Round, this time, developing-country interests in agriculture, supported by China, will have to be a key element in concluding the Doha Round — ff and when it happens.
Finally, thus far as a WTO member, China has accepted the decisions of various dispute resolution panels, and has adjusted its practices to reflect WTO panel outcomes in the cases brought against it. There is now, however, concern on the part of some in the international legal community who focus on the enforcement of trade agreements — many in the United States and the European Union — about Chinese non-compliance in the future, especially if complaints and subsequent cases are to involve export restrictions (for example, on food or industrial materials) or industrial policy matters. Time will tell. Up to now, China has been a remarkably responsible international actor in global trade governance in terms of playing by the existing rules. However, we have now reached the stage when we may need more direction from China, to help get us beyond the current impasse in the Doha trade round.
John Curtis is a distinguished fellow at The Centre for International Governance Innovation.