Brussels, 12 June 2012 - Today, the EU calls on China to create a more level playing field and to improve its business environment to benefit global trade. At today’s 4th Trade Policy Review of China at the World Trade Organisation (WTO), a regular multilateral peer-review exercise, the EU welcomed China’s economic development and underlined the role China’s WTO membership played in supporting growth. As China’s biggest trading partner, the EU draws on its experience of doing business with China in order to participate actively in this peer-review exercise.
The EU took the opportunity of the WTO's trade policy review to recognise China's commitment to the multilateral trading system and to encourage China to step up its engagement and show leadership in the WTO and in on-going WTO negotiations, in particular on trade facilitation.
"Important challenges remain, and China must now take the next step: increase its internal consumption, rely less on exports, and open its economy more, especially to services and investment", stated the EU's Ambassador to the WTO, Angelos Pangratis. "China has greatly benefitted from joining the multilateral trading system. As a result, it shoulders a great responsibility to other countries, particularly developing ones, to comply fully with international rules. With its acquired size and clout, it should lead by example."
In his statement at the WTO, the Ambassador pointed out the following areas of concern:
- The EU's main concern is related to a lack of transparency, which makes China's trade and investment policies – in the words of the WTO's report - "opaque and complex". More needs to be done to make key WTO principles like transparency and non-discrimination the norm in China's legislative system. The EU also calls on China to honour its WTO notification commitments in particular in the area of subsidies.
- State interference in the economy leading to distortion of competition: The EU shares the remark in the Secretariat's report that "despite all the reforms, state-owned enterprises still tend to benefit from lower cost of and better access to capital than non-public-sector enterprises". We therefore urge China to increase its efforts to ensure a level playing field amongst market operators, regardless of their ownership structure or origin.
- Excessive regulatory and technical obstacles to trade in goods, services, investment and public procurement and other non-tariff barriers: according to the WTO, only 46% of the more than 20 000 national standards in force in China are adopted from international or advanced foreign standards. In some areas, the participation of foreign and foreign-invested companies to standard-setting work is still restricted.
- Intellectual Property Rights (IPRs) protection and enforcement: despite China's efforts, serious problems remain and need to be tackled, notably in terms of violations of copyrights, trademarks, patents, and trade secrets.
- Raw materials: since all countries are interdependent and rely on the free supply of raw materials, the EU calls on China to remove all its export restrictions.
On 12 and 14 June 2012, China will be subject to its 4th Trade Policy Review since its accession to the WTO in December 2001. The Trade Policy Review Mechanism is the most important transparency exercise of the WTO, which systematically and regularly analyses and assesses the trade policies of the WTO member countries. The Trade Policy Review Mechanism outlines the trade policies and practices of WTO members and by doing so promotes a smoother functioning of the multilateral trading system.
The four largest Members in terms of trade volume are reviewed every two years. Currently, these Members are the EU (last reviewed in July 2011), the US (last reviewed in September 2010), Japan (last reviewed in February 2011) and China (last reviewed in June 2010). The next 16 Members in terms of trade volume are reviewed every four years. All other countries are being reviewed every six years. A longer period may be fixed for Least Developed Countries.
China's Trade Policy Review discussions are based on a report presented by the WTO Secretariat and on a report from the Government of China. WTO Members have also presented a number of technical questions to China in advance of the meeting, to which China replies in writing.
The full documentation related to China's Trade Policy Review is expected to be published by the WTO Secretariat 60 days after the meeting.
For further information:
Statement by EU Ambassador to the WTO Angelos Pangratis
Trade Policy Review of China at the World Trade Organisation
Facts and figures about EU-China trade
Speech by EU Trade Commissioner Karel De Gucht on EU-China Investment, 7 June 2012