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    Lardy 2002-Ch3 - Globalization of China

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    Lardy 2002-Ch3 -globalization of China

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    Lardy 2002-Ch3 - Globalization of China

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    hiss the most comprehensive, thoughtlul, and important treatment of Chinas fvement inthe lobal economy that has heen writen to date. Landy detailed alysis ofthe opportunities and the challenges tht both China andl ts ad partners face i compulsory reading for leaders in goverment and busines, 25 1 8 anyone else who wants to know alot more about intemational commerce in the yeas shes” jeppty & GARTEN, dey, Yale School af Manas Former dene af eon or itabonl ae, cr the pist two decades, His detailed description of Chins far reaching com uments to secure WTO membership and how they wil transform is economy expand opportunites for foreign entrepreneurs is essential reading for anyone ‘ested in doing business in China, His insightful analysis of how Chinas ans ration wilalfect the region and the global trading system makes this volume must-read for plieymakers a well” {CARLA HILLS. chi and CEO, Fill Company, omer Lad Stes Tae Repeat fs the mos important event inthe shor his cy ofthe WTO, Profesor Landys book it timely and definitive analysis ofthe many facets Lardy fone ofthe most accomplished students of the Chinese inom, He aks the questions most important to scholars, policymakers, and terested Americans, including why has Chiea been willing 19 ake on difficult iations exceeting those of existing members and other acceding nations and ich can impose short-term rks and burdens on Ching? What is che potential + Chinas compliance with the WTO obligations His answers ar profcund, bal: ced, and supported No one who requites knowledge of the global impact of hina membership in the WTO should be without this book JOHN H. JACKSON, Laverty Profesor a iw, Ceorgcown Unies Law Center ICHOLAS LARD is serio Fellow in the Foreign Policy Sudies program atthe okings Institution. He isthe author of Chita Unfnike Ezoronic Rcalation ooking, 1998). as8n 0-ans7-sias—4 shill -minimur have the porenial oe used to protec domentc indo. ‘More important, wie China had rece ie protsion of the domes oes market though the refs just dsase,it lagged in poids foveig rms accent servicer markt, Ie a impones any ce sents on orig ems that wee icoassene wih WTO sandstds 00 inllactil propery and other principe that are covered bythe tes under which Chine bose a meer ofthe World Trae Organization China’s Accession to the World Trade Organization ‘ua seca a wan of he World Tne Organ soe than fie year ae fit oral eqested memes inthe pede tor uu, te Genel Agreement om Ti and Tad Jay {GaeIsaly the prose of sso wn wo be working sect ‘hi sseiteds nemoranm desing tad ine, he i ep inthe proce athe GATT Counc ytd to estas working pry member oso cond he apoaone, png Febry 15 he working prty Span ome reac. Atte veh ting in Ape 1989 ake she petal sen RG, od ny pas hath ln rote of te worn pany Wich wate tes fori ly 1989, Cina would ape to es tha Wl ad seahestip. NS ar conlence of een delayed Chin nn Ft and ost clin in the wa fhe align Tannen Senex une of 1383, mos Wer ovement one cnn cons {SEL Epc al son ice ppm fem tee pent No Went goverment war ing send epee Unesto met Cnn ade agus Genta 0 he sched July 1999 meting th working pry wan anes A pes forma eg snl edn ace sha ent de wa compe Then 199 the esp of he Sov Unions th claps of the Counc fo Mal Eso Aman he conic nang ten the kate he cnn fee Enope cyt the Son ‘ln sed the prospec tlre number fan ranion omoies woud eto come GATT mers Soe the ms of ‘Ginter ness were ena pat tat wuld p= iy toute transition conomey Western governed Boca of tiga io on rately go cme % 6) canu's AccASSION 10 THE WORLD TRADE ORGANIZATION yt 19 Chg et we ssl a epi ead seca cig tet any bere Sek en athe tn Cin wa excel menlbp ara seecmey Tha setts nul tte ews i ngicme Canon ergata ay SEUSS ct oy aC ped poe rm ne tui bos kc ht ely weiner com see ay pods ad sda eae socal ea Tel cena cement ade wo dering sone: Na tld cone bt so wony east at ow gare Chis ass ae compo he ths we th ga Rd ee comple panda cope othe Nagel adog er. Hoag the ies ‘cl aman! hen So Cn oe TREY Spier procon faces proper, acon tof des Type afer Ue Sus reed the als fhe yl 198 Sry pee a sie Gere te ‘WTO memizep’ Once hacen was posed he wei fe Tee stent epte oe epee pent Chae eremen te calcfsconminas rane ey Ew tracer ein Ales pet isis tance but Peer Zeon! psn ponte fencer meds ase seca comp tig rt te Etch of WTO messy. The ssl. epee fC ‘rany ners ew mss gages ete a SP rca soeetncees te ei Sock wae cs mesa esl US deme Th ts fe et stop aye mpiton roves Breed ema wean ee Teer omans on Chin, Te Und Sas ok te ea og ees cotton ender nich woul ve sopon a hn ne Eehpn 9900S pain infoma Chase remenirs ft cnct wel Tent sve! te poy tdi wring puny nding apc gun ool smite Cie ee as irom a TUS etna pre neat Chan shoud be se (Copel pad eos of scope widest The tem sd ny hes eed ude epaiton or warhan's dead. Chine nett, hap fr Jom pata eons, wee Copel een to forg developing coun stan on alms ee) ‘Sle me Bain tbecad te Chic ade che ato seep tru ofthe demands fhe nied St ed ter ees he wr Fagot aceon athe oor fhe woe the pose econ and he gor of he working any vem ing Chinas secs tthe Well Tee Oreaicionpovie fr {at Han f Chia ee epine ad ftbe oping pa penis for foreign dct tnt. These proven, Bealy speaking lit wo cto. The ft provide for pester cn 0 Gina take trogh dato of isl coat ars ar wll ‘comments co oen fren investment nthe ei eto, The we Sa eatgny pectin the meander lac Chin ll nrc wh he intentional economy. The ond exter equ reed ‘tke tes Market Access (China's market acess comments cover goods and servis Goode hina aged ant flee apie pds 18 pee for inal ds 0 9 pen Fr owe roses Sov ver a rw ke fl bg04 For sone poss pn cx un lle died: far xml af ned cap, Chia ierapee!opoicjeinth W7O fora Tinley Apes whch epi cen al wi on tgs coset Temeaneers coma andcanenss eee one Noses PSE phate Yor aay ode pc tle wl Goby 208 te en 200402008 Merced {obi al ot if Tht meas hs ape il comet tortor en thre abe th apenas rl be Prowse pc into 205 afr ry em Sch {um to ay 2006 ‘hin hated inion ll gun ines, tendering ere nent ane oreo gon ae a 208 ae CSorloreachc Stan mele pmo dled sind be, ec nthe pa af npr US. eo, imprsqucas were sing on aceon For others 4 pont of ipo quot Bebe eo, wher lon agro age ine {nthe quotn ring the impor of rotor vhs vaca ype oF Spo i ander product wh gia potato eed ‘Spy US compen For some ofthe rac fr exp pay ‘Sie ie China wl out uo one yn af aces The or ‘coment wl au qua fr al ter ds by 1S pre each yur and ‘Seneininn thos 30D4 oor nor vehicle ayia 200, hin bs ged to lying ation em ok it conve wih the WTO Aare om or Liss Acong other ‘shoes Chinese ins wi longer eo demote aed or ‘omic ingot produc, standard thar he US. Trade Repeat ‘elovs wasted toatl Block se import of odes sb o Sees ats ia aie and he limipasion of pong aries on import are nly the Felnagof Chines WTO commieents, Chin ha agreed 0 ‘pen imporansrvce maths igloding elecmmunicatogs, banking imran, scutes sodas), 350 many poop seninga) Mom ‘Rowan Cina agisd vo rai adiag igs and Gata veh © foreign fs, meaning they ean iprt and export aswel nba in ‘sislesle sed real rade afteralesevce, sepa catennct, and ‘eansportaton, _urconauntgarios. The opening ig ekcommuniatins series is pote ot oe ow ren Forte at Sine Chins wll How dg Tord investments providing teecommunications ‘eee, ining nen conten ap fern service proviser Before (Gin one he Wold Trade Organization frig res were portant supplies of tekcommancitons equipment ut they wee frozen a of thebsines of poviding tlcommtnicaons sere Give the est iy ofthe sector ower the it of feign ems inet det in he rovon of various tecotmuncaonsservins heed a ve ae, ud majnty foreign ownership is peeled in al ypes of econ “ions erie: Upon aceon China alloweg 30 pera sgn owe. Ship in fens providing paging spd value-added service? The peed fowign sare wil ret 49 and 50 percent in the fist and econ ye er scamon, especie. lvesnene fp seer alo Wasa lowe on aceon bt th fr sain iil 0.25 pe Coil i 3p so then 4 peo nd ie en ter sceion pec For donc niet ie re inci est lm allowed nl be tear fer son {nda il bind 25 poe Thi sre wl x89 ec nl yea afer ten, ial eset {rte vices the Reig, Sana, Csr, ‘Er ey whch coun for bor eee of dese ‘twlecommuiications traffic. The est ofthe country will open up overtime: two year afer nin ing ae adders the er {rebar on onda and et wal evn The ovine re smmardin able hint nsf he pincer oe 1937 WTO. eet on ‘Rasic Telecommunications is atleast as important as its casing of Foreign inestnert ice, Const it ths snes Che {cing play spe eaeae prosper pee, Fr tay Chin atest pred thay opting os CFs Mima fermion indy” Hance iyo Po {in Teeomantin om ofthe pee athe Mini fr imine he eur fe hme ty an the oper ofthe longtime monn ere poi, Cina ‘Theo se adorei pro ree a hs fincas, The ceive opin te Fes cr ttre need fms vee sel epporesy west wh Chie Teo, Thegh oo he 1350 Chin Ton fd ‘orn neon ye ring Pret ane tempers cha Uric eng remarks ‘he nls ny Chin ha corte low th pro Son af ay tse iecomaneaton cr, nig tea eo i tae an canal si yay mr fehl et src o aie Thin echaaog nea commen oer Comat pocomectine eon IWNANcin unis. Teg rea wv ect orn eo ncaa Kee Cs sion oe Wal at Olan ‘one fiancee. Ch as commie ae open = ‘sks asker, mf manages ad te fe Sages: Hit Chins pele or saromly reed {ily of frags fro compet wth dome fi in hese Table 3-1. Chin's Commitment Tecommanications Servic tarot fe pe eer tculon yur _ ye yrs ye _ ye banking or example, the People's Bank of Chin, the county’ ene ak United the numberof isin which og banks could operate sand severely retried the aly of foreign banks to provide los cu femcy sevice?” Ths for many yar the primary acti of orig bank in China was to provide foreign currency bunking services tty ofr primed companies, forge enbaie and individal Frege ct ‘ens, egoningn ery 1997 the cen bank snd eight foreign banks ‘condo semis busin the Padong dic of Shang. Ten fesexpandedo nineteen bymi-1999 and owen fora March 2000," I Aupan 1998 the People Bank of China extend the itt conde domestic een bsines toa fe frig bakin Sheen th spec sono zone ae to Hong Kong, But four inportantadonal esttion vee ited she ait of {occign banks Podog and Shenshen to expand damesti currency Troe. i che bins ype fee banka Pudong and Shean svar extrey ited nial the regulator liens hen eo prove ort corey servic ony to wll foreg-owned andi retae finns oto Chines compancs or to Chinese households, The oe ex ception was tha begining i 1998 the Pople Rank lowed Foreign bunks to participate with domestic Bak inentending aie lous 0 Chinese fms ‘second, foreign banks ened o do domestic sareqey bsineis Pudong and Shnaen werd autre conduc tee trnactons oy vith bein load within thew to smal geographic regions, Not Unt eh late summer of 1999 wasthisnarew hives expanded | = (HINA ACCESSION FO FHF WORLD TRADE ORGANIZATION 69 Forign banks based in Padong authorized o conduct doce arency tains were allowed ode! with fis Base inthe aisiningprovinss tf ings and Zhejiang, wl those based 9 Shenshen were authored to dea wth ems lected in Ganong st Hunan provinces as wel as the Ganngxshuang Autonomous Reo, "Think sine foreign banks ceed cdo domi cureny business had ide aces to mesic fans was df for foreign banks to dewlop domenie carey lending to foe owned and jue veaate ams. The eatr allowed each foreign bank that ened ene the ames exrency basins 0 inerase ts apt bya ost a9 amount ivlet to RMB 30 millon "These ands, dese as operating a Tahar well asdomesticeurenc depos take fom frig mete a= i, became the source of domestic cutee fr frig bank ending nominated in renin n May 199 the People’s Bank of Chia rok a toes tp 16 ene hs consti by authori nie foreign bak all tet in Pidong, to borrow renminbi fans inthe domestic ner rake An adtional weve banks recived he same nathan} in 2000." This peemision gave the banks an alematve to depots a6 2 toute of finde foe lending A cond moder sp occred in Aust 19 when the cel based the celing onthe tanks! RMB pert ing fandom RAE 30 milion to RMB 1 lion” The fourth Giriida on the develope of the domestic cureney busines of foreign banks hte regulitor ins the rat of domeic ro forsg erry lief foreign banks. The People’ Bask inal ‘eth proportion a 35 pret bt ised 050 pcre 1998." Tie Tt the domes erency depots that frig banks can accep 10 a8 mount equa al thei foreign cvrency depos As longs his es Iain remains inet, once te 0 percent ro ead, the ate of tyowrth of domestic carey deposi of foreign bas wl be ied to the rate of expan oft foreign cuteny depois. ince hark ge rally rely penal on depots o fd tet ecg this meas tat oer thong nthe rte of goth of foreign nk? dome ureny ln tng ill belie he rate expansion of the foreign cute) le ing Efeively, foreign balks wil not beable to shit predominanly into domestic cueny lending nl this regulation mode o ed “The elt of the elon and srion thc whl there were lange numbers of foreign hanks operting 19 China inte 1990s ee sly to expand their domestic currency busines was extemel init ‘ethe en of March 1998, abou one year afer foreign bank fet were Aen cnc doe cy nn Pan st ‘moc cure eng th elegy une ott mn carey bss wa ony OIE ai Tt war ony 091 pen ofl donec rs sig mal ul in” ytd a 199 i fl arn ch iy ad the ii ho th domes fae ine neu a ene ore als Sorel domestic cone nein fog ha susan inn ef ROD 670 bil. wo ome an ‘ald iene ote nr oe yagi eprom ol 007 pe eno cre vraning fen domes Chesca tons For ns uve mined mana er nent eng Tg meric mare ire orm of common in svi Chin ied 0 sey own eer ‘cities where foreign banks can offer lompstic cabdhicy services will sys ‘cacy nr, and Jane 209 al ropaphc toon on ‘me frig tr cen oldman led 1ST nm 208 hc ae of mera to and ick cle ie" Chan’ est ee topcae tnt met spa ct Ti spe ef bs tered by frig bk alo wil be wileiee geal two Yur after entey foreign banks will be able to conduct Woeal ctrréncy business: ‘Chae Te ya itso bal wae pon anal ra chic ao Foe econo orga ss So sy gata ee ‘vent. AF that Point the benePal bask will nc longer be able'to restrict che {Bow of donee caren) Bsns of ac bas ymin thera of does ofr crm nits or we ty oe nonpadeslsto ctt omer cr pertion a fig ak Themis pease tsar Bre Ca sc cout oh Wed fae Oso mf ois ures Fensothe Chis merase eon he ey Toam ic pvenmen lowe fog sure fnsweebish ep. tee rte pose lcs fbn ya “vel octet syne The emt 99d iene tose i ca crt rane aid niet Amen national Gop AI sessing inf iunnce—Hnurne ol nti ty” Shana By he tof te dene Che il bd nana ee oe sce companies ol gid ange insane pods in ny hee Gi: Sangha, Geagahons ad Shain Rae eed insane welled ool ples 0 indie ny owe ctl Proper anatly uncon pote oc, Iernot domes Gm “aes af se minor sve ey ede the nto imurnce nase 1999 thes of org rane cornice fr estan 2 pce fa ence company {mets end de penance 1 pac fancy treme” The dian fine nt eno he role Trance Compan of Chine (P1C) and sr ae 398 te rope as conan yah of rom Pte ‘nde cee oi aruon, Chia wil pada puso moe ofthe eng scent on era age Coma See ‘So he Chins aun Reply Comin eed cone cat prea eta Shar ice UO: Spacer ean RES Daa Gt Hae lig reve atl ep ty Geographer aa are eng pel tT yeas ar So wee adnate wl be opened, Cong, Dla, Change, Sheen, Peon, Sskon, Xone, Nghe Shenyang ‘Wn, nd Tain A yee aller le ed ‘Chiat rtaly posing ut tations one scope bso foes imate sop Se sero rogaine comp bercan cf proper and rua sree ns eto td ‘ies cin seer bre ath om fs oie {F Ghin the seen earn and incon si, Sion, aod wasp fue, Fo ure comps lB {ble ofr heath nr ie ear fe sce ade a Speen ead ales to ena ‘ke aaking,howees he everanen wilt aly if own ship renin ne sane int A fore fay ve Fevemeuy sha of rfc snc, Whol op oved ‘Shanes fring nlf france ay be exablhe ating 0 Jen fom he i of Cina neon ie nance 430 pea {oragn owversipelng now appt bt he proviso a7 sce, Ar imate! Group whch ha pert whl {oreigcowned Insurance company Te Shagha sige 1992 ao i CGanphon sce PPR ican exc, wl be lowe o cosine pert under he aliating pono ott n seis hat was oct inthe 1999 US-China ber arenent and bls China’ scsi package, Ths clause prov that the conditions of ownership ‘operation, and scope of actives of forvign serie providers operating (China before is ene inode Wold Trade Organization wl ot be ade (Chin's conmitmentin cris dfn manage gles fi reac ing tan in Banking or sirance.Frsgn ones estctns for x spe ate more severe Fregn compan ca initaly wn apo need fan asset mangement company but his sare eso nly 49 psc thie yes fet acceon nsec persons feign semehip limited to one shies, wth ao provision for any intase overtime, Tete seals nis onthe scope of bins For expe since aceon fr ‘igrvestedsecurites ms can del ty in B hare and within hes years of accesion they wl eableto underwrite Brey andere ae tae government and coroeste debt and underwrite A sare, But they wll oe be allowed to prt inthe busines of tang A shares which hsoricly has been the source of the larget share the come ‘he Chinese series indus. There a however no geographic rte ions on sects, Sine acosson, ore inveted scutes and st management rms have bee allowed eo eas Busines nay oe. ‘on in Chins, xsi. Aout he Sate Coun promulgated proviso ‘eunonallowng on eae we ie Chace eon a, Suarareepsgu ers careers ‘re md. Reon covced vcs sa age ich commion a, dora mameranceses Fo fnew ined minority owed jm earls oer Stim onli an spec oni nc and and sho ‘her restos 198 ting ad approved than ey Se ici ie venir ere ncn ma aed oe in Gh, wl frp rn an Yee sage tenes cl negate esha we dass ree Bort wen allowed ong noth don eas on roid oie of Chin Thon Soha Vlnap sad ss Sle sqerh snl vie ep am ingens cos ‘Stunt atoms produc Sapna Mie abe new oad norte ed dite ny Vege chs poe pe Ger nny oher mies, The wee ootaieaplied to the dition err sie by Shang Buick ane thes of 1996 on ‘enue wih Sheng Ama nol Cope. ‘Une te et of Chin ssston othe Won Te Oranizion mom of hese qwsesap. adres etn nel ps Gs sees eg phe or oer tee foe ods rel und Waka to tar uta omc os bs pn, comin opend on ronan or era tng Two ys ae ey al ayia can wel es Chorin ‘eng nthe Chant S00 fs rea mtv sat ad Ningbo kyon he cone sah of Shang be opened ofr eae borcore xcs page ene ‘hip bs towed les thar ave be opel Tras ty that ie Al rogephe atic onreing wl be ed ee ‘mae cay Jenteal evs ve ben Permied sn stein; ign mj pyres neve Ste slows wo soso andthe yn afer rcs “nly foigrownel whl compar lb lowed Mo po. ‘et recon in Chin rb communes wl be panel et Tila dha fbn ass omer taped, een ad pt fine acre oo a nil eye ster nscntnschoni eae cna nde Perf re a ava od Ippo cg hg and ea, Fr Shstlas stat tatowed wich hats sar eel the gmernnet vl ibae ect dsb, ih mains and pi eal sd asin dene tel tin {dst ghee, package Gourl egs ad wa ig ump, sl eager Into crs ent re ‘Nich cca hebec aflowe ice cn sn esaon ch ‘shure ecg qty sre il eine in pr ying ifon iets yx ar mca, Rep sta es ‘er find wi a manana Chin ae en ‘we sce aesn Ts Shana uk con wr dee wo tool end eri ool cies proce nary aS och oe Gomer Mors mds roc oti of China srorasigne gays Rls coon 1th Woe Tee Org ston Chi sy mie be ay foes ome pide scoring anaenat comune. sx ieena OBES NE why! ‘using medi compure, and ether poeional serves in Chin, ssssson tins it most of there restos Majority fogs ownesg of joint venues offering professional vcs was alowed on scrsiog, andin ome fields wholy wae sires may Deetblihed fea, ater aceon. Geographic estos tha ha nite fog awe an fo nineteen ces and have eclaed cher fom operat saranecusy in more thin one of these ces, wl be limited one sea afer see, sion. More important in negations with the European Union fh, Chinn cased its legstanding prohibition on fron Ines pacing Chinese a at eh tems ner which hy ean hie Chine hate lawyer to represen lens in Chinese cours, Feiler wil bee to adie lens on Chinese eal matey sigan ening the long standing if ot sally eee estrction tht forign lawyers Chee ‘oui nly provide advice on tcc home counties, Foreign lawyers connie to be pronrbe rm representing bi in ioe cours. Howevey, some provement has eed in the tne tnd which they can ener it long elton withthe Chita firs tha provide hse services to the lt of the fon fm Fore Jaws ny ow instruc invidal Chins layers on how to sprsen thestont of he foreign lawyer. Atleast in pinnae (er the fer system in which he foi lf co only aaa ersten laons” with Chinese nw ims, Whether wl in se te be equivalent fll employment” of Chinese lawyers frig a ess tenaine obese. nna, tes Cho his hos ec ch aie «fee iis escaped face ae ea ‘issn eo sad sd eae sans ed ee Sena Thornton snow etl Gastar ee ices mtn pissy naa Genera ‘ine scion” Cis wil ao jens abo es et or wep oct fin das bn ake a Stat tnd ou nev eae {SONEERUEION SERVES. In the ileal agreement withthe United Sates, China ply cfd the eight of forgn investment nj ‘enue consroction companies. The EU nits biter negotans wth China, impcoved on this coment, geting green thi on seer, son joint venture in the conseaton nds could be majoky forge ‘owned ath hve ears afta Chia wouldallow the operation of ‘wll fosgn-cwned construction companies” Hosta? Char commie asc repehgs marae ay Se va ran cess teres Sa Tenn Sch Sue esc beves see Sey poked was Sor naar oagenerses Ooh Fonts Chins cles a DI th put soc nora apt es tye oe ty il a fr ap esc 2 oar ety ay 204 ‘tc ptaacna spain ee mua ga Siar babe Cha Wf0'anonom npon wal cea ne ‘Senn orice po ne ee a Sacto ops ea iar fre yy ce ey rds ch hr co sean stoi ae Sav hae ton eae say fone ‘mulngrn” he Agent Ace Don Rad Sh es ‘ihn ro sent ms ed Sun ane panes en ‘Se wl cua ele tee cal ee Inch apicat nes These wets aes scat yon porte waa nt ed Specs cmon has unt cone spins ee ae Those sade fi ft ihe fh geen sir ltmecnp rr frente ine cpm ee ‘Sumo snus pata bn pre ae pedo EE ‘Stencil forcommal ehh pore we ured chin than $ percent of domestic consumption inthe as period, WTO men bert weve reqied to et minima acs opportunities that msinein eos equivalent to average imports inthe 1986-8 base perio.” ‘China aifente ques ptm commitment reflec these gel pein ciples. For several ingore air impor China speed wo ta Ishextaordinaniy low ei, 1 percent for whest car, oc, an cot, few ied inal gui of tor refed oa he ima aces ‘portunity or quota amount.” These qa, which ae sve i ble Se then ea preageed ates throgh he ene 2004 of for soybean, Doe, The gots are mich higher tan the level of Chinese port of| these procs 199, the ear Before theft agreement wth he United Stare wis each! on Chinas accession That means that if the ‘demand for inport ies, grant addtional amounts ofthese com Inoites could ener Chin at extaceinaiy lw ta res. “Chins quota for whest re From 6.1 percent of bse period on sumption nthe ist ear to 7.8 percent inthe ial ye, Fore he inal ‘quota of 2.65 milion merc ene the equivalent of 14 percent feo Shimrion inthe Bae peo aod the ukimate quoi 2.7 percent oe Con the Sues ae 47 percent and 6.4 percent rexpeciely. The con Iriment for west and corn ae bigher dan the mibimum sco sa hae speci ithe seement on Agriculture Corn imprint bse ‘ein for example composed nly 0.6 pert ofthe as eto con Sumtion, se Chinas roied ina ninimum sexes opportanysbould hve bee only 3 percent fa blow he 4.7 percent agit in he roo ol. Moreover the quot athe il yer 64 percent, far nce than ee feawee § pero Chin's tinimam access opportunity oe ice hw ‘et fl for shor: ofthe evel speed inthe WTO Agcalaral Agree net. Rice ports in the has period aversged oaly 21 alin ete fons Tht war ely 1.1 percent of eomsumpin, eng thatthe inal Iimimsn aces opportniy should have eal 3 perent of domestic onsunpton $9 lion mets tons, more than tice China tninimam aces oppor, For the final yea the apport should fave bn percent ofenstmpion nthe han eid, al slos ie the acta comment ‘Although some ofthe minimum sco oppress fal shor f the standard rin the Agere Agree, he nts ip Chin quotas ‘rer the end of implementation looms latvia wood mare ters. Ara el ofthe Uruguay Round nepotiations aba increas in ‘marker aes under minima acess opportunity comnismens or wheat FF as “able 3.2, Tif Rae Quotas for Bulk April Commodities TI Dre wf at Commodi inpore ote U.S, negotiators demanded, and the Chinese government agreed, to madify_ {for cach commodity Yo private traders. The initial private share varies, et ee eee Gear preterm pels =a eae cece ee "he Uragny Hound negotiate comet made by Soon centered the Woeld Trade Organization in 1999 set its in-quota tariff rates (8S percent by 20055 for gets, Be oL.epan. His he apne onsen pote he mak or ‘ee Jpn mont etic apc per ca oher WTO rem ter dil confone sha minima ec opporany woul nd tony sls of, apa nthe Urey Rosnd aged opr ‘num anoune. Fr 1985-9 rhe miso ca coat ws 137,00 cos 4 percent fl consi To was ar sa Gist Lae ego on whatnot ee aa tapore. Moreover Jas Spe tom convert is pet of the dome nce ke al Inte Joan mellowed oinpose fn ino ma up f 82 yen er gm a weg "Sc thesveap i of etring won hts at eine was 46 pr tei, 292 yeu pr era wat he elo an ad vale tare of 90 pt, compared wth he perc ta pis fr Gin’ msnn se commen or wit" When te pes tevermet Sil comet spn dts to il sin Decor 1999, he gresmen the el te on bth oo te a chet at orth 380 perc, say ie the oo asl oe on China pa nor (Chinas Marker Acca ix Comparative Perspective “he one a deh of Chis mae ce anne sR, sth i hf fer WTO genes Far xaml Ser ar Stl Sra a net rolecato ri nda adds four eet ~te coum the compare ges ae 309,270, 32 a 89 per cen, expect" A aay ed China aed oh lve leson rms ee spl ef an soa, ohn edo inal fi the elo sty ates ey asd ins he US. de Recep oy “rye conmees ve don hn “Cnr ea nd ony a oir aif" Ande inde’ sonoma at awe ape dng have st the bund evel we seve he swooped rae ter pec in rng aor soa ee ‘ithe oppruny toga ei ee ‘Sin Chin's eos conmege go rvs abo compe feyorably wih noe WTO sees ns Rade comma al be sess cover byte WTO Genel dg on Tae Se “Yess On unl of eb come cls meng ta tne gual important, in moat fs rahe depth of Chis se eorgyc eond hong midly eer cameis US Te teens See ey doer Chie commen Het Sebo ym, example 2 “bade sual tn ay Wet tr Oreo meena" nial avs Cas no pare iver hse ae many trem, Cig com tment ata ema ey bade ih pci ep Soar insted Cha comm erommsiatos ho umsal sone” inp ft ure ascommimen ta wee reel fem Chow secon feb te Wo Te Op Solis dcr angle be eben neater: orca ‘sown of hogan lant © ds Well Tae Orne iecn ease nF ani 99 oped id al tbh ei chefs Ths Chin apm tbl ats ts Soria if ects rote commie by sn Sanfilippo ae ow ‘Saree compre oan tangs WTO meer occ nia ne fn tc ena? er ‘tu Seve hi a sped WTO-p ee a oo Scud peed ny ero rR ee ee ‘eet te Wald ade Onc ses ond i 995 Rules Based gues ‘coum eso ral and woking uy ea fr ot satin es commen ras ee evs ie inne tse oe aon el eg eee SSS Samiment: od Shc ne Sabie og S10 Spe ene mene Cha ge ng ak ‘Temas potting For ome Coser spse 6 te Sa Rabe RSmear on ede Reed ieeanent gore Tt meat tp cue oe ttc in cme ie oe ‘oe oeimpean rsd cpg satin w nc enna eta at ho ETO plese me ne se map yoy oe ‘emiber'GF the World Trade Organization. And in several other ateas of ony shy ser mporanc, for example, subi, China very el tal cepted sew dacrimintory ete Sofeonords Under certsin condions st fort in the WTO Agreement on Soe ards country may impose quunateresticions on ints Since {his major departare fom te mow base WTO peincpe of eliioa: ‘ngall quanti rade resins the condos tat se fllld efor a county can inpon impor quota are rtherrgros: Mos rat the ectnty imposing the restriction muse demonstrate that {reed imports hare nto tree to ae ses jury to domestic firs poducing sna or competing prods, The mere canine of increned ports ad decning sles employnent, and profit of donk ti producer enor auficent, Under oston 201 of US. rade lam, which ie ehe mechani croup which the United Stes implements de WTO SafeguedsAgrecnent a only mat cal al ete ing pore ‘and eos injury Be demonstated, it mst also be sbows thatthe i eased level af iors a importants any oer cae of the serio injury othe dome indosty.™ "erp under special circumstances, restrictions on imports impos under a safeguard measure mast be apled on 8 most fore maion bas, shat in proportionately on ll sopliers. Ths an por resin Imposed unde the WTO general safeguard proviso an aot be posed ‘only on gods orinating i singe county The tnepeeny requement for impesing a safeguard mame are site demanding, Under the WTO aguecment a sfegardesasre noe ‘rally ceono taken anil afer the relevant govermental aso has ode an investigation dere wheter serous ity rhe tet tf sroas inary t the domesticity exis. Reno pi oie mast be given al interes parsing importers and exporters They mst be given an opportuni to present tee views rebut thee ence eset otra oft The Fide an oncaions of the vesigaton mst Be made pub: "Again excep ender spa sicmstanee, «county invoking the WTO safeguard clause ects to use a quot to cated the eel of impor the quota can not bee 0 low hati wo Se oa pore ‘of «good below the average level ove the pie thee years. The conde tins hat must emt impose a safeguard Beyond four yar are some What mote stringent than those already outlined, and under 90 ican i fil me npn or mae a de sa Omi qa inp ne pes Tov ne ar gun guy mabe ed os er ‘ics Jenin ssurokedbe rpangensey area seraiad inked comer onetageesepaloy ‘tec egorig nr ompemtonerein oie gr ‘Toop han ed ese bea be eg ey vate bony quae cro tbe cof enemy rooegrd steer conn ingress infor xe sb xing sonny wie ‘Shy unm ds ese ae ear a iter ies Wace ips cepa ‘pe onic in opr ey le done ein {Sarin xy a cee al cles ‘Snes hespring cue nay tay es ‘reomanns eda incon ener eof han dae mle pu cat Capra of en ae AGT Son i ht ay rhe Und aan eh nl inp bate pl ingress chy ‘tao by itiig icra spar ade ceaion ‘oct cmputon athe wnt mc pho cots Tea saan qd ‘Resear wma ts SRS sh ee ey Tirso pin er pa econ ed sued nh plac WYO og Me aro U8 nee {Sire tat where Sip en ail le ‘Sey occ tosen “ber sifean cures oreo lay wt dete nds eng oO ‘dtp Carn: ry teen! cee Sicnlopan ison en owe sow are 70 wenhy my ines uo wae se eet step ps rina Cerca ee trol oma ose ma Theses Nec Cm ty hens ee oe ‘Snel segues mr Spas monte spp aes of Wer Tae Onan ed presi Gol Agee sa Tres . ‘The ranpaeny rien ofthe anion pode spsic safe spar are on donating he hw st fot ne WTO Agreement on Squads Invoking oe tania procs ee sega begs tox wih an ivexigaton ofthe meio ty aa ae ‘eligi need ips wa ees he vee in the inpotng cory for colin wh the Chis ores. the Cine oven ses that eporhae cued or ene o cause curr daupon, ky velar xp atc tym queen, Again, th con woul be cont to Stars Agreement, lich prohibits vohnay sta agreement Chi new side cs ot tke sachin a open or remedy he market eapon” andthe ned Stats nthe WTO member plas est Inporsthe members mast provide resonable nie allow inte tse paris eu thes expe yee Sindy afer te ital equa for cost the county ay wale ‘retonon imports os China a god a uct In thes mods theacionsaensenderthetransional prod spe ead ne inte olny expr exit by Chins othe anlar npn by theinoring nnty of reed ior vn gu Chins aly agate when cle nko more ested sha ude he TO sf fhe ets ashe sae Chine sod in the United Sento snother markets bsed on awa {ae in impor, Chi ay nt eat rt eas Unde the not smal WTO salegud the exporting ouny can ica quale Concer nollie saga are pened in eopona © ‘elie nase export In plc ofthe asl ig ys st cafes nests ingle te WTO Rare go een ‘Behan Sedat specail nay Seapine ee Chin “ony fr sch es fine a my be nce to pee or Ici he tet apn” cs eee spc ein Once eve quits he on imped ant Chose impor Se isno requirement for progr Hbralaton ote qc oe tine Foal be tastsnal pods wean conan aa spe provision del with make dupont of tose de SS Aer ooe WTO menkr iver unl pods ‘Sard oii mors of gd om Chin ein could se ins feed tic export of tha dew tee mas wher produces nga! wa ot in eet Unde th as of 4 cIMNA'S ACCESSION 10 THF WORLD TRADE ORGANIZATION Chin’ secession, ater one county has imposed safest mest anyother member my equest conslations with Chin it antipates ‘hat the application ofa safeguard clewher wll lad to increased ots of the ood from China, Cian mst eon within hry dye a, 4 Chinas anwiling to rec itsexport ha county tay impose te ‘tition niall staring sy ays fom the inal request foe en sulin, These reseicons can cain in ef fe upto tity day ae ‘hee country to impose the safeguard removes i The lft of Chinese ‘eyo to requie that imposing conte demonstate tht ade Aversion siicant cause of mati nury tothe indantry Btore placing limits om impos fom China ws sso hy embers of he ‘working party Thus inthe ete of tantonalsfeguand imposed me China rel of rade diversion, theres eine fe any inves ‘gation to demi marke daption exis China has areed to allow WTO mesnter o apply the eens ofthis ‘ramon prodactspeic safeguard, which are far ore oes tan thoi dat have been imposed on anyother ecanty a8 condition or {WTO membership for period a eweve yuan te tine of it ase, sion Only then wll Chi be subj to the les onerou pron of the WTO Safeguard Agreement, Thos na worscate sear Chin ould face aguante reste ion on is exports ofa podac fortune yey with no liberation ‘over cme onthe restcton. These estions would tar in oe county bar tkely quickly cascade tal sigicae markets They eau hei posed even if the nereased inflow of Chinese gods wee on pacing ods ro other counties and whea oly he ent ily posing the safeguard ha eared out an invetigton etalshing the existence ‘or hret of material inay tothe domestic inde). Besides his tansinalprodotspoiesafgund China ao agro 1 allow the United Stats and ether WTO members oie un De ener 31, 2008, apc texte seguad” The saleuaed substan inl the sme as the safgad provision that was orginally pat of he 1997 bilateral texileagseement beeen China and the United Sates ile greens on textiles between Chine andthe United Sates and some other advance indi counts are owned onthe WTO Aer ‘meno Teles and Clothing (ATC) the suze tothe Maliber Ar fangemet Ina major departure rm the puns of the World Tad Organization, the ATC allows counts to impose qua on tates and ‘ppl impor: Under the erm ofthe ATC, countries impinge 2 ose oul phas th tin seve sage, bing Jeary 1995. They mst tidy pase ot ac estons by Decent 3, 2004 Achaper4 dhe pseu of he rine ade ange Inn fortes and ah hath etal ony nee Ch star of werd tdein ha rod Bathe Chins ave sped Yo kt ‘WTO mener especial xl shad tl tendo 208, hiatal fly implemented woul allow WTO mem tet le oof Chae ee and spare ps 75 fee pe yar” The codon ander nlc meen be tponed {revlatnlyer tome ad Chie eps have ened eon ty to elie As withthe tnsitoalpoducespetc sgn, te inn eel ht st be ened vey Tow onl een coe tthe hea of ake pion Fe ft a wher tee ‘evo ny tothe domes ny nthe United Snes or i ani ‘une prpoing an on import bu neal jy te thet of ie Under US. rade aw hn ied se tmperts incense cir altel orl Reto crf posed vn we {alimpor art ewig bu oda om Chin are dance se tlederpplrs Mose sre ah ee, when tno Chine tave on cen ately Ching xno oe gun te ss ‘on nly emai on etl nd ppl pers tate tke tes iments ode the tal WTO tex spade cedures etitiogs nally carom oiler onan with the epaing county that woul be decal by te peed teins If conan alo et muy stacy cle to he qt eritons yon uit cl ofthe eat fhe se sin tha gone of ny en for twee month, When he er Som end the cory lnpong a en te fe © Sat he oc l ovr “This proces cob snd evi texte and apparel inpor fom ‘a ee of 208, Tussah he sone te asad tet nape qatar Chin eee ety ina hae aged wc tte hy yon Gea in ‘npseesgoncon thn ior om Cs oe ye ihe tine hat ghevsgson una berh ped Sur comply fo other supper Ses An Snr at prevualy Mes ened {os on Cine tne and apa pric drt te fh AC nw are fie wo mre her wd he reo whieh hia ba ‘aed he Word ade Onan, 86 ctina's ACCESSION 10 THE WORLD TRADE ORGANIZATION hint pro eed ap po cd scutes : sna dct sd in eat enhance sree sgn pa OF Che ead spel pas eae oe ‘esc lular re oe Ca se safeguard expe twee yer afer en By cont de gust fea safeguard spin Chia pnerallylnted tos eae dog nay be renewed, on each ceo tee eer hocason he quate limit ma be nce Anping seling a wrod broad at shan enone se P han inom le” ha ee tii” or he thre of te to lidar alos caiey dampens Woo cies shih goo sld inte home connor natrdeoeae ee sss by danged por mee ae oder th roves of US eam hin hs fr maty years ben tested aa. nonnstst onmyi ancipng cate Tag see a the US. Deartien of Commerce oes at detmace viata a rods sing duped inthe US. mace by compare he wae ‘ed impor rm China wie pe af es ed ad rin hed macht The resumption matsp: Che ion eee from planed to markt oncmy lof ts doce fal fs uply ad danand. For example some ge hed hey bythe Chie goverment, Joma peer soc ‘ngthat inp wilt refs he rc co af rodeos Hole omparons ofthe ps of Chinese gol ashone ek pe ‘ans tnil stond wl on many ini se sed bingo ates ten “rma value" Tan US ree a be forced compete unity wih Chinese pede that had aces so subsided pers Whenan America im es damping sae again» god from China the US. Deparment of Conc etble the noma ale of the od by one of wo penile nonmareecnomy etd In tft the deparent asst Chinese producers tsp information on the guar ites of each of the apts ha they utlize to pede the god. The parinent thea constructs the eos of prod tego By ein np cso thd county where dhe pcs ffs inp ae ae de ‘ermine. The department then add eo this eit of diet prion os resonable amounts for admission ling andor cont tad oft. The sus of then eres considered oral yl. Ths ually fale the factors of production or comtycted valyg mbos, Alera vey hen dhe spuds areata en the Chie proce the. Deparenet of Commerce cam simply ne tnd foe “nor al vale” the cot of production ofthe good nei country. This ‘sul ele the surogate country proach, “The wea the aonmatke economy mehology, wheter the fctors of peeduction approach or the sarogate country approach, dadotags China for several reasons. is, cout tha a sled ae srogats| ‘or whose pies are med inthe eonstctd value approach sometimes have labor costs thc ate mc higher than those realign Chia” Patiulaty foe aborts gods tht gives re othe iinet pos bili of ig By the US. Deparment of Comme that ood ring sol in the Used States a ethan ral ke" when in eal the pies wel above the actual Chines os of proton pla apo Date markups fr sing cost and prof, In elie th ikelnod i that the aplication of the aonmarkt economy methodology ane that the "Chinese produce’ comparing advantage over wor wide compet coxricont= aaa “ ‘Second, fms jp market economies sometimes wl thr prods for les than average trl cos In a downturn, for example, fim may be willing to es goods fora price ha aes ony ts ag ot | Prodketion. I is ie sold product at hoe ad abroad a the same Pri, i could ot be suber eo antidumping dite even though the Sales occurzed at a ss. By conta the US. Depremen of Commer vay incaes prot when elelting normal vale in the sonar! conemy methodologic. How profits are calsated meas that “con structed value eaeuatons usualy involve very high [antidumping] wafers. margins "™Thuseven if wages inthe country whos rice ae ing ‘werent higher han a China, eh nsuson of profi inthe sslelaon of oral vale disadvantages Chines fens subj andarping inv fans in the United Stes “The hed reason the pracl adams Ching i tht it es oe eine atkt economy catins. Thus each WTO member bo broad dcreson in seting or even changing the codons uncer which i ap plies nonmarket economic provision antamping eases aginst Chinese Frm, Fialy under US lw the decision of te Us Deparment of Con rnece designate a tang partner a+ 2 nonmarket economy m0 iectto jal erie” China has agreed tallow the United States and otber WTO members oui moan neo npn ss on “The ilstera agrecment withthe United Sate and Chin's WTO ac «ston package docs alow forse possi of suspending nonmarket ‘econo methaoogy ona easy hai Chines rm charged wih ‘lrping ean petion for s ese othe appropriateness ofthe nonmarket cononty methodology on the grounds ha the ecor ofthe ceonomy ‘whch they operate a become fn maken hat shold tole be subject the pia metdlogy, Ba this option bs een fopento Chinese Bem fora dod, and" dat no ayn China as teen able o obtain sch eaten "™ Inthe early 1990s the US. Department of Commerce allowed what eos fered toa the “buble of xpi” approach in dumping invohing nonmarker economies including Chia, This approach acknow gel hat Sm subj 103 charge of dpe sgh be operating na Inaet cavionment, even the aay of whieh twas «pre sil had ‘snc market cements, By 1992 he Commerce Deparment ah one this approach in aor of 1 much more singer “matkeroreted inser” approach, Since then fi sje oan atidamping case can sotesap the se ofthe nonmarket economy mthodoloy ls it den “nares that tere indy operate in compete envionment Under te “bubbles fcpl” approach the is had only to deo surat that ic operated in maker eon “That difrees, wich may sem somewhat obscure, could be impor tant epi for private ree Chinn Albough hey nay nor beet ftom any sateproviel suid, hese private ems esuenly would sot beable to demonstrate that all tated fr intl ndsty ez operate in a purely market cvionmen, Thus thee private Gems would betnbleo make the case that hey shold ar ke ae the nonmarket ‘sonomymethodalagy in anedumping cases Lone Dabs, Chin sole trad shoppe oft ims aig ins stone on seed expe unalng dest eee fights ro ase: Cit ended wey eee Sie and whit alba eey oer Eonditions that may ‘bite tom aS ‘hal dn fakes areas senha ‘oti roby menos Ges marin often dat eda Oe ne Siig te eer pie, To alot astm of mar ‘hem pvoning bars i surcomned bela inthe 9900 te fovea in 998 cot ort manage compe ew ‘Sed RM ean ian om ens Te St ano nd Tine Comite at age compen oop Nt 46 bono shes seu Sr swap esa teens copys ey cof im tga Sogn ft itd Sev pec of Ch cmon ni ene Subsidies fas eel ae “The WTO greene on Sul Countering Mensore detailed, complex docent coins the definition ofa subsidy ad the raped hata member may tae guns subsidies tha are devmed “actionable,” meaning that ember old impose countervailing dates, regards of whee any sbidy ‘nas conferred onthe good athe export stage, To take ction spit 2 Subsidy provided eo a nda in another sits a member rust em fnsrate thatthe government or» ule bly it making ¢ final

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