Global Economics

China's Top Trade Official: Don't Abandon the Doha Round


The Chinese Commerce Minister writes that resuming the key trade talks is needed to combat a global economic slowdown

After seven years of ups and downs, the WTO's Doha Development Agenda negotiations registered another failure in July (BusinessWeek.com, 7/30/08). The talks collapsed when the agreement on modalities of both agriculture and nonagriculture market access (NAMA), critical to the progress of the whole round, was almost within reach. This is tragic. Yet multilateral trade negotiations have never sailed smoothly before, so one more setback should not mean the end of the Doha Round. An ever opening-up China remains firm on its support of the multilateral trading system, and would like to advocate an early resumption of the negotiations to help rejuvenate the world economy.

Opening up to the outside world is China's national strategy and state policy. The year 2008 marks the 30th anniversary of China's implementation of such a strategy. Over the past three decades, the Chinese government has leapfrogged ahead in economic and social development. Such development has greatly improved the living standards of the Chinese people and lifted 200 million out of poverty while making immense contributions to the growth of the world economy.

China's achievements over the last 30 years have convinced Chinese that free but orderly trade is a viable and effective way to propel economic growth and improve people's well-being. The fact that China spent 15 painstaking years seeking accession to the WTO illustrates China's confidence in the multilateral trading system and its determination to pursue free trade. Upon its WTO accession, China has faithfully implemented its commitments, lowering its average tariff rate to 9.8%. Specifically, the tariff rate for industrial products dropped to 8.9% and to 15.2% for agricultural products, which is only one-fourth of the world's average tariff level. To honor its accession commitments, China has opened up more than 100 services sectors, close to the level of service liberalization of the developed members. China has also virtually abolished all nontariff measures, phased out the system of examination and approval regarding trading rights, and reviewed approximately 3,000 laws and regulations, making them consistent with WTO rules. After such comprehensive adjustment of its trading system and policies, China has become one of the most open economies in the world.

Focus on Developing Members

This has not only brought prosperity to neighboring countries and enhanced the overall competitiveness and potential for long-term development in East Asia but also provided a huge market for all countries and ample opportunities for investors worldwide. Since its accession to the WTO, China has imported goods worth more than $4 trillion and attracted more than $400 billion of foreign direct investment. By opening up its market to the world and driving global trade and investment with its own economic growth, China has served as a new engine for world growth.

The Doha Round launched in 2001 was particularly important for developing members; for the first time in 60 years, the multilateral trading system focused its attention on the developing members as the first priority and established "development" as the ultimate goal. For economies, especially those urgently seeking development and improving their people's livelihood, this was a hard-won mandate and much valued decision.

The launch of the Doha Round coincided with China's WTO accession. Since the first day of its WTO membership, China has committed itself to advancing the new round of multilateral trade negotiations, participated fully, and increased its involvement progressively in the negotiations.

China attaches great importance to the Doha Round because its success will contribute to even fairer and more rational rules for international trade over the next decade or two. It will also create a more stable international environment essential to all members, which will help especially the large number of developing members to develop their economies. As a developing member and a recently acceded member as well, China has fulfilled its obligations and exerted its utmost efforts to push the round toward a successful conclusion. China has submitted more than 100 proposals on various negotiation items, either independently or jointly with other members, playing an active role ever since the start of the DDA negotiations.

The Longer the Impasse, the More It'll Hurt

At the recent WTO informal ministerial meeting, China played a constructive role in the G-7 group consultations. At the critical moment when the negotiations were at the verge of breakdown, China urged other members to bridge their differences. Meanwhile, China worked with other members, sparing no effort to reach agreement on modalities for agriculture and NAMA. China has taken on many challenges and shown commensurate flexibility on issues such as cuts in trade-distorting domestic support and agricultural tariffs of the developed countries. China has also committed to further market liberalization in a number of key sectors.

Despite the fact that this informal ministerial meeting has failed to score a breakthrough, people should not lose heart. Shirking responsibilities provides no remedy for the situation, and naming and shaming is unfair and meaningless. Confronted with a global economic slowdown, high inflationary pressure, and the pervasive risk of financial crisis, stoppage of the Doha Round will undoubtedly stoke up protectionism, slow the world economy, and inflict a negative impact upon the fragile multilateral trading system. The longer this impasse lasts, the more harmful its impact will be.

Therefore, China would very much like to see that the negotiations soon get back on the right track. As the old Chinese saying goes, "One who tied the knot has to untie it." So the negotiation should be picked up from where it stumbled. In today's globalized world, all countries are going up and down in the same elevator, not sitting on the two ends of a teeter-totter where one's gain is the other's loss. By showing enough wisdom and courage and working in unity, coordination, and synergy, we will be able to conclude the Doha Round at the earliest possible date. Only in this way will we be able to confront multiple challenges faced by the world economy and realize the goal of achieving global prosperity, sustainable development, and a harmonious world.


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