Editor's Note: During the fifteen years from 1986 to 2001, after arduous negotiations, China joined the World Trade Organization. Wang Lei, a lawyer from Gaopeng Law Firm, participated fully and deeply in the negotiation from the beginning, and was a legal person in the negotiation delegation. This year marks the 20th anniversary of China's accession to the WTO. Gao Pengsuo specially invited Lawyer Wang to write a series of articles to recall the details of those eventful years. We also take this opportunity to pay tribute to those who stood at the forefront of reform and opening up and worked hard in the negotiations for the national interests.

 

At that time, there were about 90 contracting parties to the General Agreement, but most of them were dormant and did not participate in the activities of the General Agreement. Frequently participating in meetings of the China Working Group, there are representatives from over twenty to thirty countries, but only a dozen raised their hands to speak at the meeting. There are six or seven activists, four core members, the United States, the European Union, Canada, and Japan, with the United States leading the way.

 

The United States welcomes China's high-profile participation in the General Agreement. The US negotiator stated that "no country welcomes and hopes for China's entry into the General Agreement on Tariffs and Trade as much as the United States. The United States will negotiate hand in hand with China instead of blaming and arguing with each other. The United States believes that China's participation in the international trading system will bring positive results to all parties and help China's efforts to achieve economic modernization."

 

However, in the 15 years of negotiations between China's entry into the General Agreement and the subsequent WTO, no country has done as much as the United States can to haggle, nor has there been any bilateral negotiations, such as China and the United States, which involve a wide range of content, deep issues, great difficulties, and high levels of government. Over the past 15 years, China and the United States have conducted over 100 bilateral negotiations, both large and small, surpassing those between China and all other contracting parties.

 

The United States has raised more than half of the hundreds and thousands of issues regarding China's trade system. In particular, the joint efforts of the United States and Europe to require China to accept special safeguard measures have followed their consistent practice. The reason why special safeguard measures are special is that they themselves violate an important rule of the General Agreement, namely the most favored nation treatment rule. The General Agreement provides for normal safeguards. For example, when the number of color televisions imported from a country suddenly increases in a large amount, the color televisions produced in the country cannot be sold, and the benefits of color television enterprises decline, making it impossible to continue production and requiring protection. At this time, the government of the country can raise tariffs on the import of color televisions, giving domestic color television enterprises a breathing opportunity to adjust, resume production, and return to market competition. This is a general safeguard measure allowed by the General Agreement. The object of its implementation is imported color televisions, regardless of the country from which they are imported. It is said that it is not for people but for goods. The special safeguard measures proposed by the United States and Europe allow any GATT member country to specifically raise tariffs on color televisions from China, while color televisions from other countries such as South Korea, Japan, and Malaysia still enjoy low tariffs. This is a discriminatory approach that specifically and accurately targets Chinese export products.

 

There are precedents in the General Agreement for special safeguards. In the 1960s and 1970s, when Romania, Poland, and Hungary joined the General Agreement, they were forced to accept such discriminatory special safeguards. How harmful are they?

 

If you have any questions, go to Linden.

 

Oak Linden is a Swedish and special adviser to the Director General. As early as 1961, Linden served as the secretariat of the General Agreement and remained single, devoting his life to the cause of the General Agreement. He is a "walking dictionary" of the provisions, regulations, resolutions, cases, and events of the General Agreement, and is the supreme steward of the General Agreement. He has always been highly respected by delegations and colleagues in the Secretariat. At that time, he was in his fifties and was the iconic silver haired member of the Secretariat. He walked slowly, dressed like silver hair, was meticulous, and behaved like a gentleman. In addition, the Nordic people had a unique low profile, modest, approachable, and amiable personality. He was the first official in the Secretariat to contact China, and everyone was always ready to consult him if they had any questions, which would always benefit.

林登亲自经历了东欧国家加入总协定的过程。他介绍，东欧国家加入总协定时，总协定缔约方认为：这些国家是计划经济体制，与总协定市场经济基础上的规则和运行，有相当的差距，表现在进出口方面，这些国家中央计划体制下的行政干预无法避免；进口方面，它们的关税不起作用，总协定规则中的“关税减让表”下的降低关税，对这些国家没有意义，因此罗马尼亚和波兰加入时的“入门费”，不是承诺降低其进口关税，而是承诺每年进口一定数量的外国产品；出口方面，在中央计划体制下，这些国家某些产品在某个时候对国外市场会造成迅速有力的冲击，所以缔约方需要有一个的特别保障措施，专门针对这些国家的产品提高关税，防止其产品对国际市场的冲击。林登解释到，这些国家虽然接受了特别保障措施，但它们加入后的事实表明，该措施从来没有被援引使用过，主要是这些国家出口能力有限。

Linden personally experienced the process of accession of Eastern European countries to the General Agreement. He introduced that when Eastern European countries joined the General Agreement, the contracting parties to the General Agreement believed that: these countries have a planned economic system, which is quite different from the rules and operations based on the market economy of the General Agreement. This is reflected in the import and export aspects, and administrative intervention under the central planning system of these countries cannot be avoided; In terms of imports, their tariffs do not work, and the reduction of tariffs under the "Tariff Schedule" in the General Agreement rules has no significance for these countries. Therefore, the "entry fee" for Romania and Poland upon accession is not a commitment to reduce their import tariffs, but a commitment to import a certain amount of foreign products each year; In terms of exports, under the central planning system, certain products of these countries can at some point cause a rapid and powerful impact on foreign markets. Therefore, contracting parties need to have a special safeguard measure to specifically raise tariffs on the products of these countries to prevent their products from impacting the international market. Linden explained that although these countries have accepted special safeguard measures, the facts after their accession indicate that the measures have never been invoked, mainly due to the limited export capacity of these countries.

 

China's entry into the General Agreement has activated the precedent established by Eastern Europe in the General Agreement. However, neither China's current trade volume nor its future potential were comparable to those of these Eastern European countries. The requirement for special safeguard measures clearly meant that China would repeat the mistakes of Eastern Europe. Setting special restrictions on the export of Chinese products at any time is tantamount to placing a tight spell on Chinese enterprises' entry into the international market.

 

There are more thorny issues than this. While welcoming China into the General Agreement with a high profile, the United States has more frequent contacts and negotiations with China, and the means of exerting pressure on China's negotiations are more bizarre than anyone else. On the issue of the General Agreement between China and the United States, there has always been a roadblock, that is, how to resolve the trade policy of the United States towards the Communist Party countries, as far as China is concerned. The United States has publicly stated that China's entry into the General Agreement has triggered whether the United States wants to modify its relevant domestic legislation. "If the negotiations are good, the United States government can persuade Congress to modify the law. Otherwise, the United States can only cite the" non applicability "clause of the General Agreement and do not apply the rules of the General Agreement with China.".

 

The United States is the largest overseas market for Chinese products. When entering the General Agreement, both parties do not apply the rules of the General Agreement to each other, which will make China lose the fundamental significance of entering the General Agreement.

 

America's intentions are clear. If the bargaining is successful, revise the domestic law and become a trading partner with China in the General Agreement; "If we don't succeed, we will form the same path as China in the General Agreement.". The Chinese delegation has been fighting tenaciously for many years against such a near blackmail bargaining chip. What are the obstacles to American domestic law? The legal person needs to find out.

 

To be continued

 

(This article is translated by software translator for reference only.)