China's Product Specific Safeguard: Enhancing Protectionism And Impairing The Efforts Of The World Trade Organization Toward A Rule-based Legal-system

Essay by phoenecianlawUniversity, Master'sA, December 2011

download word file, 24 pages 0.0

China's Product Specific Safeguard: Enhancing Protectionism and Impairing the Efforts of the World Trade Organization toward a Rule-Based Legal-System

Fadil Mamoun Bayyari�

Introduction

On December 11, 2001, after fifteen years of extensive negotiations, the People's Republic of China ("China") joined the World Trade Organization ("WTO").� As one of the newest members of the WTO, China is unique in a number of respects. First, China is the only major WTO member that is still Communist.� Second, despite being the world's second largest economy� and fourth largest trading nation,� China is still within the definition of a developing country.� In recent years, the combination of foreign investment and cheap labor has turned China into an economic powerhouse.� Last, and most importantly, China is the only country that has agreed to a "Transitional Product Specific Safeguard Measure" ("China-safeguard") imposed on them by the United States, upon acceding into the WTO.� This safeguard, reflected in Article 16.9

of the "Protocol on the Accession of the People's Republic of China" (China's Accession Protocol), can be used by any WTO importing country against China's exports until 2014.� The justification for this new, and seemingly problematic, safeguard was that "China's export capacity threatened to disrupt established trade patterns."�

Many characteristics of China's product-specific safeguard are at odds with core WTO principles and established instruments of administered import protection available to members. One particular change introduced by the China-safeguard is the weakened evidentiary criterion that members must satisfy in order to meet WTO legal requirements to impose a new barrier to Chinese trade.� This has encouraged other countries to engage in trade policy aimed at protecting domestic industries.� Likewise, the China-safeguard has raised some concern as to whether the WTO can maintain its presence as a rule-based system.

This note is divided up into three parts. Part One...