The U.S.-China Economic
and Security Review Commission has published the official
hearing record for its February
5, 2004 hearing covering "China and the WTO: Compliance
and Monitoring." The record is available on the Commission's
website (www.uscc.gov)
and in hard copy from the Commission.
The Commission held its hearing
on China's WTO compliance to assess China's progress in
complying with its schedule of commitments and to gauge
the adequacy of U.S. Government monitoring processes. The
hearing included statements from Sen. Byron L. Dorgan (D-ND),
officials from the U.S. Trade Representative and the Departments
of Commerce, State, and Agriculture, legal experts on China's
trade obligations, and representatives of agriculture, business,
industry and labor organizations.
The Commission included in its hearing
record a series of findings and recommendations for Congressional
consideration. Among the key findings are the following:
·
"China has made progress
on WTO compliance in absolute terms, but this progress towards
compliance has decelerated to an unacceptably slow pace.
Furthermore, some lowered barriers to trade have been replaced
by new barriers that deny market access to U.S. exports
of goods and services, a practice that we categorically
reject.
·
"The Transitional
Review Mechanism [of the WTO] has failed to live up to the
expectations of the U.S. and other WTO members that it would
be a comprehensive tool for measuring and evaluating China's
compliance with the full range of its commitments and a
robust mechanism for putting multilateral pressure on China
to address compliance shortfalls."
In keeping with these findings, the
Commission made a number of recommendations to Congress to
enhance U.S. efforts to improve China's compliance. Among
others, the Commission recommended that:
"The
U.S. Government should signal clearly to China that its WTO
'honeymoon' period has ended, and that the U.S. will no longer
hesitate to secure its rights through formal recourse to the
WTO when necessary. Such a statement should accompany the
first filing of a WTO case. The Congress should press the
Administration to use the WTO dispute settlement mechanism
and/or U.S. trade laws, including Section 301 provisions,
to seek redress for China's practices in the areas of exchange
rate manipulation, denial of trading and distribution rights,
massive violations of intellectual property rights (IPR) that
have cost U.S. firms billions of dollars, and government subsidies
to export industries that harm the competitiveness of U.S.-based
manufacturing firms.
·
"China's preferential
value-added tax (VAT) treatment for domestically designed
and produced semiconductors and other discriminatory policies
are encouraging large foreign investments into semiconductor
manufacturing facilities in China, leading to a global overcapacity
in that industry that threatens U.S. producers. The Commission
commends ongoing USTR efforts to resolve the issue expeditiously
through negotiations, but now recommends that the U.S. forthwith
file a WTO case on the matter.
·
"USTR and other appropriate
U.S. Government officials should undertake strenuous efforts
to reform the TRM process into a meaningful multilateral
review and measurement of China's compliance with its WTO
commitments. If this is unsuccessful, the U.S. Government
should initiate a parallel process with the EU, Japan, and
other major trading partners to produce a unified annual
report by which to measure and record China's progress toward
compliance. This measurement and evaluation should be provided
in detail to Congress as part of USTR's annual report on
China's WTO compliance.
·
"The U.S. Government
should make optimum use of the special Section 421 and textile
safeguards negotiated as part of China's WTO accession agreement.
These important safeguards were designed to prevent our
domestic industries from being forced into bankruptcy by
surges of Chinese exports. Although the International Trade
Commission has recommended that Section 421 relief be granted
on a number of occasions, they have yet to be approved by
the Executive Branch."
For the full set of findings,
recommendations, and Commission analysis, please consult the
hearing record. |
