Inside US Trade | February 8, 2002
The incoming director general of the World Trade Organization on Feb. 5 predicted that China's focus in the trade body would be on living up to its accession commitments and avoiding disputes, but that the country could also serve as a bridge between developing and developed countries.
"China's role in the WTO in the first few years will be one of great endeavor to be a decent member of the WTO to avoid disputes," Supachai Panitchpakdi told reporters following a forum on services trade where he also cited difficult reforms in China's banking sector, pricing policies and inter-provincial trade. "This is the kind of role China will have to play just to be seen as a really decent member of the international trading community before they develop any significance, any weight in the multilateral organization."
China has not shown its hand much in the WTO, but will eventually project itself as a "bridge" between developing and more advanced countries, Supachai predicted. However, in initial procedural discussions in the WTO, China has already played a role in fighting for procedural safeguards in future talks (see related story).
Supachai noted that the transitional review mechanism, which provides for annual reviews for the next eight years of China's trade policies in subsidiary bodies, will be a burden both for the WTO secretariat and for China. China has requested training for hundreds of officials to deal with these reviews, but the WTO was unable to accommodate the request, he said.
Supachai cited a number of hurdles in China's efforts to meet its WTO commitments, saying it had many trade laws it needs to revise or rescind. In addition, China had to abolish a dual pricing system that set one price for domestic goods and a separate one for imported equivalents. In auto trade, China had protectionist barriers between provinces that it had to get rid off, and in agriculture it faced yearly displacement of tens of millions of farm workers.
In banking, Supachai noted that there were large numbers of non-performing loans where there was no private market to assume these loans. That would create a "tremendous burden" on China's budget. With domestic Chinese banks facing these difficulties, Supachai noted that China had five years "to get its act in order" and end more favorable treatment to domestic over foreign banks.Inside US Trade:
