United States law and China's WTO accession process

Journal of International Economic Law

Volumn 2, Issue 3, 1999, Pages 497-510

  Rhodes, Sylvia A ^b   Jackson, John H ^a  

^a GEORGETOWN UNIVERSITY LAW CENTER   (United States)

^b NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0033421209     PISSN: 13693034     EISSN: None     Source Type: Journal    
DOI: 10.1093/jiel/2.3.497     Document Type: Article

References (114)

1. 'Agreement Establishing the World Trade Organization', reprinted in John H. Jackson et al., Documents Supplement to Legal Problems of International Economic Relations 3 (3d ed. 1995), art. XII [hereinafter WTO Agreement]. Article XII of the WTO Agreement sets out guidelines for the accession process. WTO Agreement, above, art. XII.
2. WTO Secretariat, Accession to the World Trade Organization: Procedures for Negotiations under Article XII, WT/ACC/1 (24 March 1995), available at WTO web site, http://www.wto.org [hereinafter Accession Procedures].
3. GATT Activities 1986, at 75 (1987).
4. Communication from China, WT/ACC/CHN/1 (7 December 1995), available at WTO web site, above note 2 (requesting that the GATT Working Party on China's Status as a Contracting Party be converted to the Working Party on China's Accession to the WTO).
5. GATT Activities 1992, at 95 (1993). Chinese Taipei's application to the GATT and the WTO is further discussed below. 6 Accession Procedures, above note 2.
6. Id.
7. WTO Agreement, above note 1, art. XII(2).
8. For an overview of the accession process, see Accession Procedures, above note 2. The working party submits a Report, Protocol of Accession, and Schedules of Concessions and Commitments on Goods and Services to the WTO's General Council for consideration. Id. If the General Council adopts the final accession package, the acceding government may sign the Protocol of Accession. Id. The Ministerial Conference of the World Trade Organization must approve decisions on accession by a two-thirds majority of the members of the WTO. WTO Agreement, above note 1, art. XII(2). The acceding government becomes a WTO member 30 days after it notifies the WTO that it has completed the ratification process. Accession Procedures, above.
9. See, e.g., A. Neil Tait and Kui-Wai Li, 'Trade Regimes and China's Accession to the World Trade Organization', 31 J. World Trade 93 (1997) (noting that negotiations are conducted on both a multilateral and bilateral basis and have been primarily conducted between the PRC and the US, the EU, Japan, and Canada, but that the Sino-US relationship has dominated the accession negotiations).
10. 'Final Act', in General Agreement on Tariffs and Trade 3 (1947).
11. John H. Jackson, The World Trading System: Law and Politics of International Economic Relations (2d ed. 1998), 329 (stating that '[i]n 1950 the GATT headquarters received a cable from a Chinese government then located on the island of Taiwan, which purported to withdraw China from GATT membership'); Tait and Li, above note 10, at 98 (stating that the Taipei government withdrew China's GATT membership in 1950).
12. Jackson, above note 12, at 329.
13. UN General Assembly Resolution 2758 Restoration of the Lawful Rights of the People's Republic of China in the United Nations (26 October 1971).
14. Harold K. Jacobson and Michel Oskenberg, China's Participation in the IMF, the World Bank, and GATT: Toward a Global Economic Order (1990), at 63.
15. People's Republic of China, Consular Relations, 31 January 1979, US-PRC, 30 UST 17; see also Fox Butterfield, 'U.S. and China Mark Resumption of Ties in Peking Ceremony', N.Y. Times, 2 January 1979, at A1, A10.
16. See, e.g., Graham Hovey, 'U.S. and Taiwan Flags Lowered as Ties are Symbolically Ended', N.Y. Times, 1 January 1979, at A4.
17. Agreement on Trade Relations Between the United States of America and the People's Republic of China, 7 July 1979, US-PRC, 31 UST 4651; see also 'Chinese Trade Pact Is Sent to Congress', N.Y. Times, 24 October 1979, at A1, D4 (reporting that President Carter formally sent Congress the US-PRC agreement signed in July granting trade preferences to the PRC).
18. GATT Activities 1984 (1985), at 55.
19. GATT Activities in 1983 (1984), at 35.
20. See, e.g., Jackson, above note 12, at 329 (stating that the Beijing government argued that the 1950 cable was null and void); Tait and Li, above note 10, at 98 (stating that the Beijing government never agreed to the Taipei government's withdrawal of China's GATT membership).
21. GATT Activities 1986, above note 3, at 76-77.
22. GATT Activities 1987 (1988), at 108-09. 24 Jackson, above note 12, at 329.
23. GATT Activities 1989 (1990), at 130.
24. See, e.g., Robert S. Ross, 'Enter the Dragon', 104 Foreign Affairs 18, 22 (1996); Nicholas D. Kristof, 'Troops Attack and Crash Beijing Protest; Thousands Fight Back, Scores are Killed', N.Y. Times, 4 June 1989, at A1.
25. See, e.g., Robert S. Ross, 'Enter the Dragon', 104 Foreign Affairs 18, 22 (1996); Nicholas D. Kristof, 'Troops Attack and Crash Beijing Protest; Thousands Fight Back, Scores are Killed', N.Y. Times, 4 June 1989, at A1.
26. GATT Activities 1989, above note 25, at 130.
27. See, e.g., GATT Activities 1989, above note 25, at 130; 'GATT Weighs China's Entry', N.Y. Times, 15 September 1989, at D2.
28. GATT Activities 1992, above note 5, at 94.
29. Id. at 95. The Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu (referred to as 'Chinese Taipei') sought accession to the GATT under Article XXXIII. Id.
30. GATT Activities 1993 (1994), at 104-05.
31. GATT Activities 1993, above note 31, at 105 (stating that the PRC wanted to conclude the negotiations on its status as a contracting party in time for it to become an original WTO member); Jackson, above note 12, at 329 (noting that China did not become an original WTO member despite its interest in obtaining GATT membership before the WTO came into effect); 'China Delay on Trade Pact', N.Y. Times, 15 December 1994, at D7 (reporting that China took the position that it no longer expected to enter the new WTO in January 1995, given the increasing demands by the US and other GATT members).
32. See, e.g., Jackson, above note 12, at 329; Tait and Li, above note 10, at 98.
33. The WTO General Council agreed that, when a state or separate customs territory that has a GATT 1947 working relationship requests accession under article XII of the WTO agreement, the existing working party should continue its work as a WTO accession working party. WTO Secretariat, General Council (31 January 1995): Minutes of Meeting, WT/GC/M/1 (28 February 1995), available at WTO web site, above note 2. In December 1995, the PRC and Chinese Taipei requested that their GATT working parties be converted into WTO working parties. WTO Secretariat, Communication from China, WT/ACC/CHN/1 (7 December 1995), available at WTO web site, above; WTO Secretariat, Communication from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, WT/ACC/TPKM/1 (7 December 1995), available at WTO web site, above.
34. Telephone interview with Cecilia Leahy Klein, Director for WTO Accession, Office of the United States Trade Representative (7 April 1999) [hereinafter Leahy Interview].
35. See, e.g., Paul Blustein and Michael Laris, 'U.S., China Hit Snags In New Trade Talks', Washington Post, 24 April 1999, at E1.
36. Trade Act of 1974 § 402, 19 USCA § 2432 (West 1980 and Supp. 1999). Section 402 of the Trade Act of 1974, as amended, bars the President from concluding a commercial agreement with a nonmarket economy country that is not eligible for MFN treatment, unless the President determines that such country has a free emigration policy. Id.; see also S. Rep. No. 93-1293 (1974), reprinted in 1974 USCCAN 7186, 7334-35. The term 'nonmarket economy country' is a term of art that is synonymous with 'communist' country. Daniel F. Wilhelm, Most-Favored-Nation Certification and Human Rights: A Case Study of China and the United States (1996), at 52 Section 401 requires the President to deny nondiscriminatory treatment to products of any country whose products were not eligible for such treatment on 3 January 1975. Trade Act of 1974 § 401, 19 USC § 2431 (1994). The legislative history of section 401 provides that nondiscriminatory treatment should be denied to the products of communist countries except Poland and Yugoslavia. S. Rep. No. 93-1293 (1974), reprinted in 1974 USCCAN 7186, 7333. The legislative history provides that the following countries were ineligible to receive nondiscriminatory treatment: Albania, Bulgaria, the People's Republic of China, Cuba, Czechoslovakia, East Germany, Estonia, Hungary, those parts of Indochina under communist control or domination, North Korea, the Kurile Islands, Latvia, Lithuania, Outer Mongolia, Romania, Southern Sakhalin, Tanna Tuva, Tibet, and the USSR. Id.
37. Trade Act of 1974 §§ 401ff., 19 USCA §§ 2431ff. (West 1980 and Supp. 1999).
38. Trade Act of 1974 §§ 401ff.
39. Trade Act of 1974 § 402(c), (d), 19 USCA § 2432(c), (d) (West 1980 and Supp. 1999).
40. Trade Act of 1974 §§ 401ff.
41. Trade Act of 1974 § 401; see also China Trade WTO Membership and Most-Favored-Nation Status: Hearing Before the Subcomm. on Trade of the House Comm. on Ways and Means, 105th Cong. (1998), available in LEXIS, World Library, Fednew File (statement of Jayetta Z. Hecker, Associate Director, International Relations and Trade Issues, National Security and International Affairs Division, US General Accounting Office).
42. Trade Act of 1974 § 402.
43. Id.
44. S. Rep. No. 93-1293 (1974), reprinted in 1974 USCCAN 7186, 7333 (stating that the term 'non-discriminatory treatment' is intended to be synonymous with 'most-favored-nation' treatment).
45. Internal Revenue Service Restructuring and Reform Act of 1998, § 5003(b)(2), 19 USCA § 2432 (West Supp. 1999). At least one commentator has suggested that this change in terminology reflects a desire to make it easier to extend annual MFN treatment to the PRC. Greg Mastel, 'Last Call for the China MFN Debate', Intellectual Capital.com (10 September 1998) (visited 15 March 1999) 〈http://www.econstrat.org/ECONSTRAT/iclastch.htm〉.
46. S. Rep. No. 93-1293 (1974), reprinted in 1974 USCCAN 7186, 7333.
47. Trade Act of 1974 § 402(b).
48. Id.
49. Trade Act of 1974 § 402(c)(2).
50. Trade Act of 1974 § 402(d); Trade Act of 1974 § 153, 19 USC § 2193(a) (1994).
51. Trade Act of 1974 § 402(d)(2)(A)(ii).
52. Id.
53. Agreement on Trade Relations Between the United States of America and the People's Republic of China, 7 July 1979, US-PRC, 31 UST 4651; Proclamation No. 4,697, 44 Fed. Reg. 61,161 (1979). After concluding the bilateral commercial agreement with the People's Republic of China, President Jimmy Carter issued an executive order granting a Jackson-Vanik waiver to the PRC. Exec. Order No. 12,167, 44 Fed. Reg. 61,167 (1979). This bilateral commercial agreement was most recently renewed in January 1998. Determination No. 98-13, 63 Fed. Reg. 5,857 (1998). 55 Trade Act of 1974 § 402.
54. John H. Jackson et al., Legal Problems of International Economic Relations: Cases, Materials and Text on the National and International Regulation of Transnational Economic Relations (3d ed. 1995), at 994.
55. Jackson et al., above note 56, at 994.
56. Determination No. 90-21, 55 Fed. Reg. 23,183 (1990).
57. 'Statement on Most-Favored-Nation Trade Status for China'., 29 Weekly Comp. Pres. Doc. 981, 982 (31 May 1993); Exec. Order 12,850, 58 Fed. Reg. 31,327 (1993); see also Thomas L. Friedman, 'U.S. Is to Maintain Trade Privileges for China's Goods, Clinton Votes for Business', N.Y. Times, 27 May 1994, at A1, A8 (reporting that Clinton denounced President Bush during the campaign based on Bush's stance that the best way to protect human rights in PRC was to engage PRC). Although the Jackson-Vanik amendment concerns emigration issues, it contains language Which allows the United States to link normal trade relations with human rights issues: 'To assure the continued dedication of the United States to fundamental human rights, . . . products from any nonmarket economy country shall not be eligible to receive nondiscriminatory treatment (normal trade relations), . . . ' Trade Act of 1974 § 402(a).
58. Determination No. 94-26, 59 Fed. Reg. 31,103 (1994); see also Douglas Jehl, 'U.S. Is to Maintain Trade Privileges for China's Goods: A Policy Reversal', N.Y. Times, 27 May 1994, at A1, A8.
59. See, e.g., Jackson et al., above note 56, at 994; Elaine Sciolino et al., 'Clinton and China: How Promise Self-Destructed', N.Y. Times, 27 May 1994, at A1, A8; Richard Bernstein and Ross H. Munro, 'China I: The Coming Conflict with America', 76 Foreign Affairs 18, 22 (1997) (stating that the PRC 'applied powerful economic and political pressure on both the United States and elsewhere - notably in Europe and the United Nations - to force President Clinton to retreat from his earlier position').
60. See, e.g., Jackson et al., above note 56, at 994; Elaine Sciolino et al., 'Clinton and China: How Promise Self-Destructed', N.Y. Times, 27 May 1994, at A1, A8; Richard Bernstein and Ross H. Munro, 'China I: The Coming Conflict with America', 76 Foreign Affairs 18, 22 (1997) (stating that the PRC 'applied powerful economic and political pressure on both the United States and elsewhere - notably in Europe and the United Nations - to force President Clinton to retreat from his earlier position').
61. Press Briefing on Visit of Chinese Premier Zhu Rongji (8 April 1999) (quoting Deputy National Economic Advisor as stating that the US cannot apply the WTO agreement to govern bilateral trade relations between the US and the PRC unless Congress graduates the PRC from the Jackson-Vanik amendment); Willem Van Der Geest, 'Bringing China into the Concert of Nations: An Analysis of its Accession to the WTO', 32 J. World Trade 99, 112 (1998) (stating that WTO trade negotiators say that the Jackson-Vanik amendment provides 'a legal obstacle to the United States granting China its MFN status on a permanent basis, even if China were to join the WTO').
62. WTO Agreement, above note 1, art. XII(2); see also Richard Lawrence, 'The Sino-American Hall of Mirrors', J.Com., 8 March 1999, at 5A (suggesting that, although the PRC could enter the WTO without US support, it seems unlikely).
63. Article I of GATT 1947 requires unconditional MFN treatment. GATT 1947, above note 30, art. I.
64. 2 GATT, Analytic Index: Guide to GATT Law and Practice (6th ed. 1995), 1032-33 (stating that under GATT practice contracting parties have voted in favor of accession while invoking the non-application clause, Article XXXV of GATT).
65. WTO Agreement, above note 1, art. XIII. Article XIII of the WTO Agreement reads as follows: 'This Agreement and the Multilateral Trade Agreements in Annexes 1 and 2 shall not apply as between any Member and any other Member if either of the Members, at the time either becomes a Member, does not consent to such application.' Id. art. XIII(1). Article XIII of the WTO Agreement is partly patterned on GATT Article XXXV, which gave each contracting party, and an applicant for membership, a one-time option to 'opt out' of a GATT relationship with any other contracting party. Jackson et al., above note 56, at 310.
66. WTO Agreement, above note 1, art. XIII(1).
67. WTO Agreement, above note 1, art. XIII(3).
68. Jackson et al., above note 56, at 310.
69. Marrakesh Agreement Establishing the World Trade Organization, Invocation of Article XIII: 1 with Respect to Romania, Withdrawal of Invocation by the United States, WT/L/203 (20 February 1997), available at WTO web site, above note 2.
70. Protocol for the Accession of Romania to the General Agreement on Tariffs and Trade, in GATT BISD (18th Supp.) at 5 (1972), Accession of Romania, in GATT BISD (18th Supp.), above, at 23, 94; Protocol for the Accession of Hungary to the General Agreement on Tariffs and Trade, in GATT BISD (20th Supp.) at 3 (1974); Accession of Hungary, in GATT BISD (20th Supp.), above, at 17, 34.
71. Trade Expansion Act of 1962 § 231, 19 USC § 1861, repealed by Trade Act of 1974 § 602(d), 88 Stat. 1978, 2072; Leahy Interview, above note 35.
72. 2 GATT, Analytic Index, supra note 65, at 1034 (stating that the US invoked Article XXXV of GATT with respect to Romania and Hungary in November 1971 and September 1973, respectively); Leahy Interview, above note 35.
73. Leahy Interview, above note 35.
74. Id.
75. WTO Secretariat, Marrakesh Agreement Establishing the World Trade Organization, Invocation of Article XIII:1 with Respect to Romania, WT/L/11 (27 January 1995), available at WTO web site, above note 2; Leahy Interview, above note 35.
76. Leahy Interview, above note 35.
77. Most-Favored-Nation, Romania, 19 USCA § 2434 (West Supp. 1999).
78. Id.
79. Proclamation No. 6951, 61 Fed. Reg. 58,129 (1996).
80. WTO Secretariat, Marrakesh Agreement Establishing the World Trade Organization, Invocation of Article XIII:1 with Respect to Romania, Withdrawal of Invocation by the United States, WT/L/203 (20 February 1997), available at WTO web site above note 2; Leahy Interview, above note 35.
81. WTO Secretariat, Accession of Mongolia, Invocation by the United States of Article XIII of the WTO Agreement, WT/L/159 (17 July 1996), available at WTO web site, above note 2; Accession of the Kyrgyz Republic, Invocation by the United States of Article XIII of the WTO Agreement, WT/L/275 (12 October 1998), available at WTO web site, above note 2; Leahy Interview, above note 35.
82. 2 GATT, Analytic Index, above note 65, at 1034 (noting that the US invocation of Article XXXV of GATT remained effective as of 15 May 1995).
83. Leahy Interview, above note 35.
84. Miscellaneous Foreign Affairs §§ 1-2, 19 USC § 2434 (1994); HR Rep. No. 102-223, at 2 (1991), reprinted in 1991 USCCAN 786, 787.
85. Miscellaneous Foreign Affairs §§ 1-2.
86. Proclamation No. 6419, 59 Fed. Reg. 12,865 (1992).
87. See, e.g., Remarks by Kenneth Lieberthal, Senior Director, National Security Council, at Asia Society Symposium (30 March 1999) (stating that granting permanent normal trade relations to the PRC would require a vote by Congress to amend the Jackson-Vanik amendment or a permanent waver under the Jackson-Vanik amendment).
88. Id.
89. Miscellaneous Foreign Affairs §§ 1-2, 19 USC § 2434 (1994).
90. This pattern has been used to grant permanent MFN treatment to Romania (1996), Bulgaria (1996), and Czechoslovakia and Hungary (1991). Most-Favored-Nation, Romania, 19 USCA § 2434 (West Supp. 1999); Most-Favored-Nation, Bulgaria, 19 USCA § 2434 (West Supp. 1999); Miscellaneous Foreign Affairs §§ 1-2. The statute with respect to Bulgaria illustrates the pattern of delegating authority to the President to grant permanent MFN treatment. Most-Favored-Nation, Bulgaria § 2. First, section 2(a)(1) authorizes the President to determine that Title IV of the Trade Act of 1974 'should no longer apply to Bulgaria.' Id. § 2(a)(1). Second, it authorizes the President to extend MFN treatment to the products of Bulgaria, after making a determination under section 2(a)(1) with respect to Bulgaria. Id. § 2(a)(1). Finally, section 2(b) of the statute explicitly provides that Title IV 'shall cease to apply' to Bulgaria after the President extends MFN treatment to Bulgaria under section 2(a)(2). Id. § 2(b). In this case, the President granted permanent MFN treatment to the products of Bulgaria by issuing a proclamation, determining that Title IV of the Trade Act of 1974 should no longer apply to Bulgaria and extending MFN treatment to the products of Bulgaria. Proclamation No. 6922, 61 Fed. Reg. 51,205 (1996).
91. Miscellaneous Foreign Affairs §§ 1-2; Most-Favored-Nation, Bulgaria; Most-Favored-Nation, Romania.
92. Proclamation No. 6922, 61 Fed. Reg. 51,205 (1996).
93. Most-Favored-Nation, Bulgaria § 1(a)(3) (finding that Bulgaria is in the process of acceding to the GATT and the WTO and that extension of unconditional MFN treatment would enable the US to avail itself of all rights under the GATT and the WTO with respect to Bulgaria); Bulgaria became a WTO member on 1 December 1996. WTO web site, above note 2.
94. Miscellaneous Foreign Affairs §§ 101-04, 19 USC § 2434 (1994).
95. Id.
96. US Const, art. I, § 8. The United States Constitution vests in Congress plenary authority to 'regulate commerce with foreign nations'. Id.
97. Hearing Before the Subcomm. on Trade of the House Comm. on Ways and Means, 105th Cong. (1998), available in LEXIS, World Library, Fednew File (statement of John P. Sweeney, policy analyst).
98. Omnibus Trade and Competitiveness Act of 1988 § 1106, 19 USC § 2905 (1994).
99. Id.
100. Id.
101. Omnibus Trade and Competitiveness Act of 1988 § 1106(b)(1), 19 USC § 2905(b)(1) (1994).
102. Omnibus Trade and Competitiveness Act of 1988 § 1106(b)(2), 19 USC § 2905(b)(2) (1994).
103. Assessment of the Economic Effects on the United States of China's Accession to the WTO, 64 Fed. Reg. 3,714, 3,714 (1999).
104. Id.
105. John Pomfret, 'U.S. Praises China For Attitude on Trade', Washington Post, 5 March 1999, at E3.
106. See, e.g., Erik Eckholm, 'U.S. and China Trying Hard For Breakthrough on Trade', N.Y. Times, 24 February 1999, at A8.
107. William Roberts and Heidi Przybyla, 'Barshefsky Off to China to Work out WTO Membership Deal', J. Com., 1 March 1999, at 1A and 12A.
108. See, e.g., Mark O'Neill, 'WTO Talks Begin Again with Zhu Pushing for April Deal', South China Morning Post, 23 April 1999, at 4 (reporting that a US-PRC agreement would put pressure on other major trading partners to reach agreement, so that the PRC can join the WTO before the new WTO round begins in November).
109. Gene Linn, 'The Tie That Binds', J. Com., 29 March 1999, at 18.
110. HR 577, 106th Cong. (1999).
111. HR 577.
112. HR 884, 106th Cong. (1999).
113. HR 884.
114. S. 742, 106th Cong. (1999).