Background on China’s Decision
China has announced that it will maintain its status as a developing country but will refrain from seeking special and differential treatment (TED) in future World Trade Organization (WTO) negotiations, according to a high-ranking Chinese delegate at the WTO mission in Geneva.
Who is China’s Delegate?
Li Yihong, the Chinese trade official at the permanent mission in Genebra, communicated this decision to the press. Yihong emphasized that China’s commitment to supporting the multilateral trading system remains unwavering.
What is the Trading Special and Differential Treatment (TED)?
The Trading Special and Differential Treatment (TED) is a provision under the WTO that allows developing countries like China to enjoy certain advantages, such as higher tariffs and the use of subsidies for protecting domestic industries.
Why did China make this decision?
The United States has been opposing the benefits that countries like China receive by classifying themselves as developing nations. Washington wanted China to completely renounce these advantages.
Impact on the WTO and Global Trade
The World Trade Organization (WTO) welcomed China’s decision, stating that it would contribute to a fairer and more balanced global trading system.
- What are the advantages of TED? Developing countries under TED have more flexibility to use higher tariffs or subsidies to safeguard their industries.
- Why do some countries, like the US, consider TED unfair? As China has become the world’s second-largest economy, some trading partners view TED as an unfair advantage for large developing nations.
- What was the US stance on WTO reform? The United States argued that significant WTO reform was impossible unless major developing countries, like China, gave up TED benefits.
China’s Decision and its Implications
Li Yihong, the Chinese trade official, stated that China’s decision would inject “positive energy” into ongoing WTO reform discussions. This move is expected to foster a more cooperative atmosphere in WTO negotiations.
Key Questions and Answers
- What is China’s current status in the WTO? China maintains its developing country status within the WTO.
- What benefits will China no longer seek? China will not pursue special and differential treatment (TED) advantages in future WTO negotiations.
- How will this decision affect global trade? The move is expected to contribute to a more balanced and fair global trading system by addressing concerns from major trading partners like the United States.
