China creates systemic problems for world trade, ruled the United States Trade Representation (USTR) as part of an evaluation process of the World Trade Organization (WTO) on the trade policies of that Asian nation.
This position by the USTR was taken after discussions that took place on Wednesday and Friday of last week among WTO members, who identified a number of specific problems with China’s trade regime.
In particular, the USTR highlighted 12 of those problems: industrial policies that “skew the playing field” against foreign competition and create systemic problems for world trade; “severe and persistent” overcapacity, especially in the steel and aluminum sectors; preferential treatment for state companies that contributes to unequal conditions for foreign competition; and forced technology transfer.
They also include: improper application of intellectual property rights; restrictions on foreign investment in key sectors; inadequate regulatory transparency; and a “too broad” cybersecurity regime that appears designed for protectionist purposes.
Finally there are cross-border data restrictions and data localization requirements; China’s use of forced labor in various sectors; China’s use of its Antitrust Law for industrial policy purposes; and a variety of “problematic” sanitary and phytosanitary (SPS) measures.
Several WTO Members urged China to assume responsibilities in the WTO commensurate with its economic weight and stature as one of the world’s largest traders, even refraining from claiming benefits that would accrue to a developing country in the ongoing negotiations.
According to the WTO Secretariat report, many Members also expressed concern about China’s “inadequate compliance” with its transparency obligations.
“In this regard, these Members drew attention to China’s poor record of submitting full and timely WTO notifications, especially in the areas of industrial subsidies, state trading, domestic support to agriculture and subsidies to agriculture. Fishing. The United States fully supports these sentiments, ”said the USTR.
The United States asked several follow-up questions about China’s prolific use of government guidance funds as a means of providing massive financial support to Chinese industries. The WTO Secretariat report also highlighted this issue.
“China’s brief response to numerous questions from the United States about these government guidance funds was simply to say that the state has no role in them. We note that China’s response appears to be inconsistent with publicly available information and does not answer most of the questions posed by the United States, ”the WTO questioned. The EU also asked a series of follow-up questions related to the fisheries sector, including subsidies.