China Creates Research Centre on WTO DSM

♠ Posted by Emmanuel in , at 5/13/2008 12:36:00 AM
If any country can be described as a lightning rod for trade complaints, China would be my choice, surpassing even the United States. Aside from being one of the world's three largest exporters, there are a handful of largely undisputed reasons why China is being continually embroiled in trade disputes: extensive use of statist policies, unprecedented currency intervention, weak intellectual property enforcement, and occasionally capricious attitudes to market access issues (at least by WTO rules). It should come as no surprise that China has been or is currently on the receiving end of ten matters which have been brought before the WTO's judicial body, the Dispute Settlement Mechanism (DS309, DS339, DS340, DS342, DS358, DS359, DS362, DS363, DS372, DS373) while it has only be a complainant in two (DS252, DS368).

Our favourite official publication, the People's Daily, now reports that China is creating a research body to look into the workings of the Dispute Settlement Mechanism (DSM). It's about time, I say. While I see it as being more of a defensive apparatus given China's oft-repeated status as a respondent to complaints, there may be some room for China to go on the offensive as well, although I can hardly see any more markets which Chin can pry open. Then again, I may be wrong. My suggestion to the Chines though would be to look into how to avoid being dragged into the DSM altogether as a more proactive way of defusing trade tensions:

A research center on World Trade Organization (WTO) dispute settlement mechanism was set up in Shanghai on Sunday, the first of its kind in the country. The China-WTO Dispute Settlement Mechanism Center (CWTODSMC) will offer suggestions and solutions to trade disputes for government and businesses, said Gong Baihua, deputy director of the center. The center was jointly founded by the Shanghai Institute of Foreign Trade and the Shanghai WTO Affairs Consultation Center, a non-governmental organization.

"Such a research institute will help Chinese government and businesses further familiarize themselves with WTO rules and learn how to resolve disputes using the dispute settlement mechanism," said Zhang Yuejiao, one of the five counselors for the center. In November last year, Zhang was appointed by the WTO Dispute Settlement Body (DSB) as a member of the seven-person Appellate Body, which issues final rulings in trade disputes. She is the first Chinese judge on WTO's highest court. China has been facing a number of trade disputes in the past seven years after the country joined WTO.

BTW: There is an interesting political economy side story involving the selection of Zhang Yuejiao of the PRC as one of the DSM's appellate body members. Taiwan initially made a move to block this appointment, but things were eventually papered over between these countries which perennially joust at international organizations.