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Enforcement of the US-China WTO Accession Deal

THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release March 8, 2000

Enforcement of The U.S. - China WTO Accession Deal March 7, 2000

The U.S.-China WTO Accession Agreement Will Increase U.S. Leverage To Open China's Markets: Granting permanent Normal Trade Relations (NTR) will give the United States broad new rights and strong mechanisms to enforce them. These WTO enforcement mechanisms are outlined below. At the same time, the Administration has already begun to identify and put into place tools that will bolster our existing monitoring and enforcement mechanisms.

The U.S.-China WTO Accession Deal Is Far-Reaching, Detailed, And Binding. China's accession to the WTO will lock in detailed commitments in virtually every sector, covering industrial goods, services, and agriculture. The Agreement also addresses non-tariff barriers like the lack of trading rights and distribution rights, and ensures that American workers and companies are protected from practices that injure U.S. industries, such as dumping and import surges. In this Agreement, China made unilateral, one-way concessions. The United States would simply maintain the market access policies we already apply to China by granting it Permanent Normal Trade Relations. China's broad commitments will be subject to enforcement by every WTO Member through binding WTO dispute settlement.

China's Commitments Will Be Enforceable Through WTO Dispute Settlement For The First Time. In no previous trade agreement has China agreed to subject its decisions to impartial review, and ultimately imposition of sanctions if necessary -- and China will not be able to block panel decisions. If China loses a dispute, it will have to change the offending practice, provide compensation, or be subject to denial of access to our market in an amount proportional to the harm it causes. The U.S. has been the most frequent user of the WTO dispute settlement mechanism, obtaining favorable results so far on 23 of the 25 complaints that we have initiated and that have been acted upon.

The United States Maintains The Right To Use The Full Range Of American Trade Laws: These include Special 301, Section 301, Section 201, and our antidumping laws, all of which continue to be effectively used to advance U.S. interests in a WTO-consistent manner.

The United States Will Gain New Leverage To Ensure Fair Trade And To Protect The U.S. Agricultural And Manufacturing Base From Import Surges, Unfair Pricing, And Abusive Investment Practices. No agreement on WTO accession has ever contained stronger measures to bolster guarantees of fair trade. This agreement addresses these concerns through:

- Strong anti-dumping protections. The Agreement guarantees our right to use the special antidumping methodology we apply to non-market economies for 15 years after China's accession to the WTO. - A China-specific safeguard. For the first 12 years -- in addition to the existing global safeguard provisions -- China has also agreed to a country-specific safeguard that is stronger and more targeted relief than that provided under our current Section 201 law. This ensures that the U.S. can take effective action in case of increased imports of a particular product from China that cause or threaten to cause market disruption in the United States. This applies to all industries, permits us to act based on a lower showing of injury, and permits us to act specifically against imports from China. - Prohibitions on practices that can cost American jobs and technology. China will no longer require U.S. companies to transfer their technology in order for U.S. companies to export or invest in China. This will better protect U.S. competitiveness and the results of U.S. research and development. In addition, China will no longer require U.S. manufacturers to export as a condition for importing inputs, to use Chinese-made parts for products sold in China, or to balance the value of their exports and imports, so as to prevent a net loss in foreign exchange. If existing contracts contain such provisions, China has committed not to enforce those contract requirements. In addition, China will not condition import approval or investment licenses on performance requirements, including offset and technology transfer requirements, or deny approval of imports or investment because there is a competing Chinese producer. This Agreement will make it significantly easier for American companies to export to China from the United States, rather than having to set up in China in order to sell products there.

China's WTO Commitments Will Increase Leverage For IP Enforcement. China has committed to implement the agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) immediately upon accession -- with no transition period. TRIPS requires that a country make available enforcement measures and sanctions adequate to deter further infringing activity.

The U.S. Will Strengthen Its Enforcement Capabilities Through The Multilateral Nature Of The WTO. The accession will create a multilateral review mechanism to monitor all of China's implementation closely. And as these commitments come into effect, China will be subject to enforcement by all 135 WTO members, significantly diminishing China's ability to play its trading partners against one another. In all previous disputes over Chinese compliance with agreements, notably those over intellectual property, the United States acted alone. With China in the WTO, we will be able to work with 134 other members, many of whom will be concerned about the same issues we raise and all of whom will have the legal right to challenge China's implementation practices and seek redress.

The Specificity Of China's Commitments Will Help Ensure That China Complies. Experience with the Intellectual Property Agreements demonstrates that our agreements with China are enforced most satisfactorily when obligations are concrete, specific, and open to monitoring. Our bilateral Agreement therefore includes highly specific commitments in all areas -- including industrial goods, services, agriculture, and rules -- clear timetables for implementation, and firm end-dates for full compliance. These will allow us to carefully monitor China's compliance and present clear evidence of any failure to comply.

The United States Will Monitor Vigilantly And Enforce Aggressively. We are already preparing for an increased monitoring and enforcement effort through President Clinton's request for $22 million in new enforcement and compliance resources for USTR, the Commerce Department, USDA, and the State Department. The President is requesting resources for the largest monitoring and enforcement effort for any agreement ever, covering China's obligations in the WTO and strong enforcement of our trade laws.

- Tripling resources for China compliance monitoring at the Department of Commerce: President Clinton's new initiative would triple resources dedicated to China trade compliance -- including administration of our unfair trade laws. The Department would more than double the number of compliance officers in Washington devoted to ensure effective enforcement of China's WTO accession commitments and other bilateral trade agreements. - Bolstering monitoring and enforcement efforts: The additional resources sought for the Office of the U.S. Trade Representative will strengthen its ability to ensure that the terms of our agreements are fulfilled. This initiative would create new positions in four areas of expertise -- legal, economic, geographic, and sectoral -- to be devoted to negotiating, monitoring, and enforcing trade agreements, and would significantly increase staff dedicated to China. - Monitoring compliance overseas: The new Commerce/State Overseas Compliance Program provides for trade experts to monitor compliance with international trade obligations and support enforcement of U.S. trade laws, such as those involving market access issues, subsidies, dumping, and other unfair trade practices. By strengthening our capacity to gather information "on the ground" in foreign countries, this initiative would help American businesses make the most of market access opportunities and facilitate the investigation of trade agreement violations. - Increased enforcement for American agriculture: The President's budget calls for providing additional resources to the U.S. Department of Agriculture to bolster its legal and technical expertise in areas covered by trade agreements and U.S. trade law. USDA monitors implementation of the WTO agreement's agricultural trade liberalization provisions and works with USTR to ensure compliance.

The Administration Will Continue To Work With The Private Sector, Congress, And China. We will continue our efforts to work closely with American workers, farmers, businesses -- and Congress -- to ensure effective monitoring and quick response. At the same time, we will seek to prevent or reduce problems by working closely with the Chinese, including through technical assistance where appropriate, to ensure they fully understand their new obligations. WTO rules will require real and meaningful changes in China's application of trade rules and policies, and consultation and training can head off problems.

The United States Will Maintain Strong Existing Laws. Nothing in this agreement undermines our commitment and ability to continue to block imports of goods made with prison labor, to maintain our export control policies, or to withdraw benefits including permanent NTR in a national security emergency.

# # #


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