Home > News>Press Conference

MOFCOM Holds Press Briefing on the Relevant Issues about the Reform of the WTO

[Gao Feng]: Dear friends from the press, good afternoon. Welcome to the press briefing of MOFCOM. We are very glad to have invited Vice Minister of Commerce and Deputy China International Trade Representative Wang Shouwen and the General-director of MOFCOM Department of WTO affairs Hong Xiaodong to introduce the relevant issues about the reform of the WTO and answer the questions from the press. Next, Mr. Wang Shouwen will introduce the relevant situations.

[Vice Minister of Commerce and Deputy China International Trade Representative Wang Shouwen]: Dear friends from the press, good afternoon. With the WTO as its core, the multilateral trading system based on rules is the footstone of economic globalization and free trade. It has made very important contributions to promoting global trade development, economic growth and sustainable development. In the circumstances that the world economy has undergone profound adjustments, and that unilateralism and protectionism have risen, the multilateral trading system has been severely impacted. In this regard, China supports the WTO in having necessary reform in order to enhance the WTO’s effectiveness and authority.

China has proposed three basic principles and five propositions for the reform of the WTO. About the three basic principles, first, the reform of the WTO should safeguard the core values of the multilateral trading system. Non-discrimination and openness are the most important core values of the multilateral trading system. The WTO members should obey this while handling the economic and trade relations with other members within the framework of multilateral rules. The reform should strengthen the core value of the multilateral trading system and promote the WTO to play a greater role in global economic governance. Second, the reform should guarantee the development interests of developing members. Development is a core of the work of the WTO, and the reform should address the difficulties of the developing members in integrating into the economic globalization, give developing members the flexibility and policy space they need to achieve their economic development and the UN's 2030 Agenda for Sustainable Development and narrow the gap between the South and the North. Third, the WTO reform should follow the decision-making mechanism of consultation and consensus. Reform is related to the future of the multilateral trading system, and the topics and final results of the reform should be decided through consensus. The process of reform should ensure the common participation of the majority of members, especially the developing members, rather than be decided by a few members. We should not create "small circles." This is China's three basic principles regarding the WTO reform.

China has five propositions for the reform of the WTO. First, the multilateral trading system’s status as the main channel should be upheld. The reform should maintain the multilateral trading system’ status as the main channel in the process of global trade liberalization and facilitation. It cannot be confused with the so-called new concepts and new expressions. We cannot deny the authority of the multilateral trading system and "starting another stove." Second, we think that priority should be given to the key issues that threaten the survival of the WTO. Reform should put unilateralism and protectionism into the cage of the system. It should solve the urgent problems that are obviously frustrating and hindering the members of the Appellate Body as soon as possible, and ensure the various normal functioning of the WTO. Third, the reform should ensure the fairness of the rules and respond to the needs of the times. The reform should address the excessive agricultural subsidies of some developed members which has caused the long-term and serious distortions for the international agricultural trade. The abuse of trade remedy measures should be corrected, especially the surrogate country approach in the anti-dumping investigation. This practice has caused serious interference in the normal international trade. At the same time, the reform should promote the rules of the WTO to keep pace with the times and respond to the needs of the economic reality of the 21st century. Fourth, the special and differential treatment of developing members should be guaranteed. China is the largest developing country in the world. We are willing to assume obligations in the WTO that are compatible with our own level of development and capabilities. We do not allow other members to deprive China of the special and differential treatment of developing members that we deserve. Fifth, the WTO reform should respect the respective development models of its members. Reforms should eliminate some members' discrimination against specific state enterprises in investment security review and anti-monopoly review, and correct some developed members' abuse of export control measures to obstruct normal technical cooperation. China also opposes some members who deny the diversity of development models and discriminate against different development models. China disagreed on incorporating the development model into the reform of the WTO and opposed taking the accusation which has no evidence as the discussion subject of the WTO’s reformation.

Dear friends from the press, these are China’s three basic principles and five propositions for the reform of the WTO. Thank you.

[Gao Feng]: Thanks for the introduction of Mr. Wang Shouwen. Next, please ask questions about the theme of today's briefing. Please introduce the news organizations you represent before asking questions as usual. Please ask questions now. The floor is open.

China Daily: Vice Minister Wang, President Xi Jinping pointed out in his keynote at the 1st CIIE that China believes that necessary reforms to the WTO should be supported and the multilateral trading system should be defended. Could you explain why China thinks it necessary to reform the WTO? What’s China’s basic position on the WTO? What are the pressing issues that need to be addressed?

Wang Shouwen, Vice Minister of Commerce and Deputy CITR: On Nov. 5th, President Xi Jinping made it clear in his address at the Opening Ceremony of the 1st CIIE that hosting the CIIE is an important decision made by China to pursue a new round of high-level opening-up, and is China’s major initiative to still widen market access to the rest of the world. It demonstrates China’s consistent position of supporting the multilateral trading system and promoting free trade. Over the past 70 plus years since the GATT days and the founding of the WTO, the rules-based multilateral trading system has advocated for transparency, non-discrimination, openness and inclusiveness, thereby promoting the liberalization and facilitation of global trade and investment and playing a significant role in contributing enormously to global trade development, economic growth and sustainable development, including poverty alleviation. That said, toady’s multilateral trading system is facing a serious crisis with the challenge of unilateralism and trade protectionism.

We say there are three existential crises facing the WTO:

First, the WTO dispute settlement mechanism. Regarded as the crown jewel, the mechanism’s appellate body used to have seven members. But now there’re only three, with four seats unfilled due to the obstruction of a certain WTO member. If this goes on, there will be only one member left by Dec. next year, which means the body will not be able to function and faces the threat of paralysis. This is one of the three existential crises.

Second, certain WTO members abuse the security exceptions in WTO rules to raise tariffs.

Third, certain WTO members pursue unilateral measures and disregard WTO multilateral rules, which also lands the WTO in a crisis.

Therefore, faced with the three crises, China believes it necessary to introduce necessary reforms to the WTO for enhanced authority and efficacy.

You asked about China’s basic position on WTO reform. As I referenced earlier, we believe that WTO reform should abide by three basic principles. China also has five specific propositions, as I introduced and don’t want to repeat. I think for WTO reform, as things stand, the key is to address the three existential crises facing the WTO. Thank you.

CNR: We know that at the just concluded APEC Leaders’ Retreat, WTO reform became a bone of contention in debates and arguments. At the upcoming G20 Summit, WTO reform remains a key item on the agenda. What message does China expect the G20 to send on this topic?

Wang Shouwen: You are right. During the just concluded APEC Leaders’ Meeting, despite all the efforts and broad consensus on the theme of the meeting, when it came to the topic of multilateralism and WTO reform, certain member insisted on putting its own interest first and tabling a proposal that serves itself at the expense of others’ interests. To make things worse, it tried to impose its will on others. It undermined APEC’s basic decision-making principle of consensus through consultation. The meeting ended up without consensus on this topic and leaders failed to agree on a declaration. It is hoped that the same thing won’t happen again at G20 Summit.

G20 members are all WTO members. Together they account for 86% of global GDP and 80% of world trade. Therefore, G20 members have the ability and responsibility to discuss problems or crisis in global trade and seek solutions. China hopes that G20 members can have productive discussions on WTO reform, render support for the multilateral trading system and oppose unilateralism and trade protectionism, and send a positive signal of conducting necessary reforms to WTO during the Summit. The international business communities are counting on us. Thank you.

Reuters: What are the major differences between China and the US regarding positions on WTO reform? Do you think WTO reform can succeed without US support?

Wang Shouwen: With respect to WTO reform, different parties have made their voices heard. Some have formulated proposal paper. I’d like to use an example to explain the differences. Just now I mentioned one of the existential crises facing the WTO is the selection of AB members of the dispute settlement mechanism. It is a difference not just between the US and China, but between the US and the rest of the WTO members. We believe the problem should be addressed as soon as possible so that the WTO can function as efficiently as usual and give play to its authority. If there were no dispute settlement mechanism to ensure that WTO agreements and disciplines were followed, members would be clueless about what to do. Should there be violations, nobody would be there to make a ruling, and those agreements would be of no use. Consequently, it would be meaningless to negotiate new deals. Among the three functions of the WTO, namely dispute settlement, trade negotiations and trade policy reviews, the first one is regarded as the crown jewel. Without it, the other two would be severely undermined, depriving the WTO of its efficacy. This is the biggest difference between the US and other WTO members.

WTO reform cannot succeed without full support of all members. No reform to the WTO can count as a success if any member’s support is lacking. As one of the founding members of the GATT and the WTO, the US is expected to make positive contributions to making WTO reform a success. Thank you.

Central Station for Radio and Television: Just now, Vice-Minister Wang mentioned five propositions from China, one of which was that the WTO reform should respect the respective development models of its members. What are the background and considerations for such a proposition?

Hong Xiaodong, Director General of the Department of WTO affairs, MOFCOM: The WTO has 164 members, with different levels of socioeconomic development and varied development models. Inclusiveness is one of the core values and basic principles of the WTO. For a long time, based on respect for such differences, the WTO has advanced global economic and trade growth and helped countries achieve their respective social and economic growth targets through mutually-beneficial and equal consultations. We also believe that the future WTO reform should follow the same way. At present, a few members deny the diversity of development models. On one hand, they are accusing the normal development model and policy measures of other members, including SOEs and industrial subsidies. On the other hand, they are limiting normal exchanges of scientific and innovative achievements, effectively hoping to safeguard their own dominant positions and limit the room of development for other members. China’s practice has shown that China’s development model and path suit China’s national conditions today. Since the initiation of the WTO, it can accommodate the economic and trade development of all members, including China. Therefore, we believe that the WTO reform in the future should also respect the diversity of development model, including respecting China’s development model. Thank you.

CNR: In the five propositions on WTO reform by China, one of them was the special and differential treatment of developing members should be guaranteed by the reform. However, recently some developed members keep accusing China of free riding by using its identity as a developing country. What is China’s response to that?

Hong Xiaodong: Development is not only a target of every country, but also the core of the work of the WTO. As I have just mentioned, the WTO has 164 members, the majority of which are developing ones. Therefore, their appeals and concerns should be fully considered and appropriately addressed. Development is the primary task of all members. The future reform should fully consider the difficulties of developing members and give them enough flexibility and policy space. Although China has grown in scale and strength, some figures are clear to all. China’s per capita GDP is less than USD 9,000, ranking 71st in the world. Its regional development is still unbalanced and insufficient. In particular, there is still a large gap between the development of China’s education, old-age care, medical and healthcare and other social security systems and those of developed countries. Therefore, China’s standing as a developing country is beyond all doubt. In addition, as a large developing country, China never shrinks from its international obligations consistent with its development level and abilities. Upon China’s accession to the WTO, its level of obligations already exceeded average developing members. In terms of tariff levels, our average tariff levels are already far lower than those of developing members, close to those of developed ones. In the specific negotiations after China’s accession to the WTO, we have also made our contribution consistent with our abilities, such as in the Agreement on Trade Facilitation and the expansion talks of the Information Technology Agreement. In the future, we will continue to take on obligations consistent with our level of development and abilities and help safeguard the multilateral trading system. Thank you.

Phoenix TV: Minister Wang, you said the WTO rules should be reformed to keep up with the times. Can you be more specific?

Wang Shouwen: The WTO has delivered some results through its negotiation function, but we have to admit that the outcomes are less-than-expected. To be specific, the negotiation failed to address the unfairness of some rules or to capture the dynamics of international trade in the 21st century. Therefore, the rules must be reformed to keep the WTO relevant.

Regarding agriculture, the WTO rules allow some Members ample room in agricultural subsidy policies. Three major Members grant subsidies worth USD19 billion, 35 billion and 85 billion each year, while other Members do not have the right to agricultural subsidy. It is a privilege of developed Members. Developing Members are denied such rights. Such unfair rules have allowed developed Members to stimulate agricultural production with subsides. As a result, the oversupply and decline in price have harmed developing Members. Such subsidies cause market distortion. The WTO rules must level the playing field.

When the WTO was established, back in 1995, there was no such thing as e-commerce. Today, e-commerce has become a rapidly-growing and highly promising sector in international trade. Yet the WTO has not made any rules regarding the trade barriers to e-commerce. Speaking of investment, in the 1990s, when WTO came into being, the size of international investment was only modest. The WTO had an Agreement on Trade-related Investment Measures, or TRIMS, setting out rules on investment related to trade. Today, cross-border investment around the world can be as much as USD1.9 trillion a year, or USD1.4-1.5 trillion at least, making substantial impact on trade, investment, capital importers and exporters. That’s why the WTO needs to make rules for investment facilitation. I just gave some areas where the WTO has not kept pace with the times or reflect the will of the majority of Members: e-commerce, investment facilitation, agricultural subsidy. We hope through reform, the WTO can have fairer rules and be better equipped to take care of the new topics and issues in international trade, international economy, and international cooperation in the 21st century.

Gao Feng: Since we’re running out of time, the floor is open for one last question.

Xinhua News Agency: We have noted that recently many WTO members put forward their positions and proposals on WTO reform, some of which are different from China’s position. What’s your view on such differences? Besides, as far as we know, China and the EU have set up a high-level working group on WTO reform. Does this mean that China and the EU are on the same front on this issue?

Hong Xiaodong: As Vice Minister Wang just mentioned, WTO members have different proposals on rules, for example, on domestic agricultural support, e-commerce and investment facilitation. China also expresses its proposal today. It is only natural to have different proposals. However, rules-making should involve all of the WTO’s 164 members. Rules to be made in the future should be made by a broad range of members based on a broad consensus. In the rules-making process, broad consultation should be held on the basis of mutual respect and equal-footed dialogues. Attempts to form exclusive blocs or impose a certain member’s opinion on the broad majority should be rejected. This is our view on members’ different proposals.

I’d like to introduce to you the China-EU high-level joint working group. According to the joint statement issued after the 20th China-EU Summit held in July 2018, the two sides decided to cooperate on WTO reform and set up a vice-ministerial-level joint working group to this aim. So far, the two sides have held two informal meetings and one formal meeting. Both sides resolutely support the multilateral trading system, which is the basis for cooperation. Upholding the principle of seeking common ground while shelving differences, the two sides have exchanged views with each other on WTO reform. So far, the two sides have reached some consensus on selecting Appellate Body members and they will continue to exchange views in the future with regard to strengthening the WTO’s regular work and other issues. Thank you.

Gao Feng: This is the end of today’s news briefing. Thank you all, our two briefers and friends from the press.

(All information published in this website is authentic in Chinese. English is provided for reference only. )