China must ‘walk the talk’ on trade, says former WTO chief

BEIJING: Beijing’s pledges to pursue trade liberalization in the face of a potentially more protectionist US under Donald Trump meant it was time for China to “walk the talk” on the issue, former WTO director-general Pascal Lamy said Friday.
Lamy, also a former EU commissioner who negotiated China’s entry into the World Trade Organization, said that despite a rise in anti-globalization rhetoric, he expected the EU and China to remain key players in keeping international trade open.
But, speaking in the Chinese capital, he added: “China has had a lot of talk of trade-opening and globalization, and not much walk.
“It is time for China to walk the talk,” he told a conference at Renmin University’s Chongyang Institute for Financial Studies.
US President-elect Donald Trump has vowed to ditch the Trans-Pacific Partnership (TPP) once taking office, and analysts say the move could give Beijing an opportunity to forge ahead with its own trade deals and fill a vacuum left by any American withdrawal.
“Whether trade-opening is done multilaterally, bilaterally, regionally, east-west, north-south, that doesn’t matter,” said Lamy. What matters, he said, was that “obstacles to trade are reduced. You go the best option you have.”
A US withdrawal from the TPP would have limited impact on world trade, he insisted.
As EU trade commissioner, Lamy negotiated China’s 2001 entry into the WTO.
When it joined, it was promised it would attain Market Economy Status (MES) by the end of 2016 — a status that would mean that partners would have to treat the Communist-ruled country as a free market equal when it comes to settling trade disputes.
The EU is opposed to granting it to China, not wanting to let Beijing off the hook over a long series of disputes ranging from steel to solar panels.
MES was “a politically-correct notion invented by polite diplomats in order to not to call Communist countries ‘Communists’,” said Lamy.
At the time, he said, China wanted a maximum waiting period of 10 years, while the US was pushing for 20. “The compromise, surprise, surprise, was 15 years. Typical horse-trading.”
Now lawyers were looking at how to re-interpret the agreement, he said.
The “EU will recognize China as a market economy, but at the same time will revise its anti-dumping procedures,” he said.
Lamy spoke as China urged the US to abandon a surrogate country approach it uses to calculate anti-dumping measures against Chinese exports, as a related clause in China’s WTO deal is set to expire.
When China joined the WTO in 2001, it agreed to let WTO members treat it as a non-market economy when assessing dumping duties for 15 years. That gave trade partners the advantage of using a third country’s prices to gauge whether China was selling its goods below market value.
But that clause is due to expire on Dec. 11, and China has demanded that countries abide by the agreement.
US Commerce Secretary Penny Pritzker said in November the time was “not ripe” for the United States to change the way it evaluates whether China has achieved market economy status, and there was no international trade rules requiring changes in the way US anti-dumping duties are calculated.
Chinese Commerce Ministry spokesman Shen Danyang said the US should stop using its own market economy evaluations to deny China’s “rights.”
“It’s a right that China must enjoy as a WTO member and an obligation that all WTO countries must fulfil,” Shen told reporters during a regular briefing.
“China advises the US to stop mixing things and escaping its international obligations. China calls for the United States to fully comply with the rule in a timely manner, and push for healthy development of China-US trade relations.”

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