26 October 2020

1.SURVEILLANCE OFIMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

B. UNITED STATES – SECTION 110 (5) OF THE US COPYRIGHT ACT: STATUSREPORT BY THE UNITED STATES (WT/DS160/24/ADD.184)

Once again, we want to register our concern about the United States'non-compliance with WTO rulings, and failure to provide sufficient protectionof intellectual property rights.

The United States continues to fail to deliver the full compliance inthis dispute. More than two decades after the DSB adopted the recommendationsand rulings in DS160, this dispute remains unresolved. Regrettably, its 185status reports provided so far are not materially different from one to anotherand none of them could indicate any progress in implementation.

As the result, the United States continues to fail to accord the minimumstandard of protections required by the TRIPS Agreement. And it has become theonly WTO Member who fails to implement the DSB’s recommendations and rulingsunder the TRIPS Agreement.

The clear text of DSU Article 21.1 requires Members to promptly bringits WTO-inconsistent measures into conformity so as to ensure effectiveresolution of disputes. We urge the United States to faithfully honor thislegal obligation and complete the implementation in DS160 without furtherdelay.

Thank you.

E. UNITED STATES – CERTAINMETHODOLOGIES AND THEIR APPLICATION TO ANTI-DUMPING PROCEEDINGS INVOLVINGCHINA: STATUS REPORT BY THE UNITED STATES (WT/DS471/17/ADD.23)

On 22 May 2017, the DSBadopted the Appellate Body report and the Panel report modified by it in thisdispute which found a serial of the United States’ measures violated relevantanti-dumping rules, which includes (1) the use of zeroing under the W-T methodologyis as such incompatible with Article 2.4.2; (2) the so-called single ratepresumption as such violates Article 6.10 and 9.2, and (3) the adverse factsavailable is a norm of general and prospective application which could subjectto future as such challenges. The Article 21.3 (c) arbitration decided thereasonable period of time (RPT) to be 15 months, expiring on 22 August 2018. Inresponse to United States’ continued failure to implement, China had no otherchoice but to request the retaliation in accordance with Article 22.2 of theDSU. On 1 November 2019, the Article 22.6 arbitration determined the level ofnullification or impairment caused by the United States was USD 3.579 billion.This was the third largest retaliation amount in the WTO history which revealsthe severe hardship imposed by the United States’ WTO-inconsistent measures.

Up to date, the UnitedStates continues to fail to deliver the compliance. None of its 24 statusreports provided so far could indicate any concrete implementation action. 41months after the DSB adopted the report, and 26 months after the RPT expiry,the recommendations and rulings of the DSB in this dispute brings China no morethan its paper value.

What China experienced inDS471 is not exceptional. The record shows that the United States’ compliancehas increasingly become a systemic problem to the Membership. Its substantialdelay in compliance or ignorance of the implementation obligation in manydisputes has seriously compromised the effectiveness and authority of the WTOdispute settlement system. The credibility of this organization also takes thecollateral damage, and that in turn is harmful for the whole world, includingthe United States.

Implementation is thecornerstone of the dispute settlement system which keeps the rules-basedmultilateral trading system afloat. Refusal to implement WTO dispute settlementrulings will not only backfire on the US economy, but also cause the UnitedStates to lose its moral high ground for asking other WTO Members to complywith the WTO rules. Article 21.1 of the DSU states that “prompt compliancewith recommendations or rulings of the DSB is essential in order to ensureeffective resolution of disputes to the benefit of all Members.” We urgethe United States to faithfully honor its implementation obligation, and adoptconcrete actions to deliver full compliance in this dispute.

Thank you.

5. STATEMENT BY CHINA REGARDING THEPANEL REPORT IN "UNITED STATES – TARIFF MEASURES ON CERTAIN GOODS FROM CHINA"

Thank you, Chair.

China would like express its appreciationto the Panel’s objective findings in UnitedStates – Tariff Measures on Certain Goods (DS543). This decision maintainsthe authority of multilateral trading system and Members’ confidence in disputesettlement system. And China also would like express itsdisappointment that the United States opposed the adoption of the PanelReport and appealed this dispute to the paralyzed Appellate Body. It is UnitedStates that has ruined the operation of Appellate Body and is taking advantageof Appellate Body’s paralyzation to prevent the entry into effect of this PanelReport.

DS543 is an important case, not only forChina, but also for the WTO. So China would like to make a statement on thiscase, although the Panel Report could not be adopted today due to the US’sappeal. I will mainly focus on three aspects. First, the United States’unilateral tariff measures are inconsistent with the WTO rules. Second, the UnitedStates’ unilateral tariff measures endanger the interests of China, the UnitedStates and the whole world. Finally, China will reserve several minutes todiscuss the abuse of the procedural rules by the United States.

I.THE PANEL CORRECTLY CONCLUDED THAT THE UNITED STATES’ UNILATERAL TARIFFMEASURES ARE INCONSISTENT WITH WTO RULES

China requested theestablishment of a Panel in DS543 on 6 December 2018 to challenge the US’s discriminatorytariff measures imposed on approximately 234 billion dollars of imports fromChina. On 15 September 2020, the Panel circulated its Final Report. In the PanelReport, the unilateral Section 301 tariff measures have been found incompatiblewith the multilateral trading system.

The United States’ additional duties solelyon imported products from China violated Article I:1 of the GATT 1994. And by addingsuch additional duty rate, the customs duties levied on imports from China bythe United States, are in excess of those set forth in its Schedule, and in violationof Articles II:1(a) and (b) of the GATT 1994.

Facing such flagrant infringement, theUnited States made no defense on its violation of Article I and II of GATT1994, but tried to seek help from Article XX(a) of the GATT 1994. Throughcareful examination and reasoning, the Panel rejected the United States’unjustified defense.

Pursuant to Article 19.1 of the DSU, thePanel recommended that the United States bring its measures into conformitywith its obligations under the GATT 1994.

II.THE PANEL’S DECISION PROFOUNDLY UNVEILED THE UNILATERAL NATURE OF THE UNITEDSTATES TARIFF MEASURES

The most-favoured-nationtreatment and the bound rate obligation are well recognized as the fundamentaland backbone principles of the WTO rules. By finding the United States’ tariffmeasures in violation of Articles I and II of the GATT 1994, the Panelprofoundly unveiled the unilateral nature of the United States’ tariff measures.We believe that this is not only a victory for China, but also a victory forthe multilateral trading system against unilateralism.

Indeed, the unilateraltariff measures taken by the United States has severely impaired the legitimateinterests of numerous Chinese enterprises and damaged the trade relationshipbetween China and the United States. Trade, which should have been a growthpole for the common interests for both China and the United States, has becomea pain spot.

What is more, the unilateral tariffmeasures have also done harm to the United States itself. Economists from theUnited States have warned that unilateral tariff measures could slow the UnitedStates’ economy and impose a negative impact on American consumers andbusinesses, because the unilateral tariff measures are imposing additionalburden on them. It may explain why a mounting number of suits have beenbrought against Section 301 tariff measures at the US Court of InternationalTrade since this September. They claimed that the tariffs were imposed in an “arbitraryand capricious manner”.

The multilateral trading system, with theWTO at its core, also has been posed threats by those unilateral measures. Historyhas told us that unilateralism, if left unchecked and unregulated, willseriously undermine the global industry and value chains, threaten thedevelopment of the world economy, and no country will be immune.

Therefore, it is high time for all the WTOMembers to shoulder common responsibility to counter and resist the tendencies ofunilateralism and protectionism. That is what the Panel Report of DS543 toldus.

III.THE UNITED STATES’ APPEAL IS AN ABUSE OF PROCEDURAL RULES

China has noted that the United States hasrecently filed appeals in several disputes in order to obstruct the adoption ofthe Panel reports to its disadvantage. The United States’ appeal is nothing butan abuse of procedural rules, which is infringing upon other Members’ right to theprompt settlement of the dispute under the Dispute Settlement Understanding.

As a result of the United States'obstruction of the selection of Appellate Body Members, the Appellate Body wasparalyzed by the end of last year, posing serious threat to the disputesettlement system. Since then, we have witnessed two distinct situations, onein which more than a dozens of WTO Members have joined hands to establish theMultiparty Interim Appeal Arbitration Arrangement (MPIA) and 121 WTO Membersmade a joint proposal calls for the selection of Appellate Body Members, andthe other in which the US hides behind the paralyzed Appellate Body and triesto build a “safe island” by abusing the procedural rules. No one ought toprofit from his own tort, and the United States is no exception. China, onceagain, urges and calls upon the United States not to use this unfair advantage,accept the decision of the Panel and take meaningful actions to fully implementthe recommendations of the Panel in this dispute.

Also, the United States’ ignorance andrefusal of well-accepted practice to submit a notice of appeal and an appellantsubmission clearly constitute abuse of procedural rules. China regrets that theUnited States’ appeal under Article 16.4 of DSU led the dispute proceeding toenter the appellate review procedure, and the Panel Report of DS543 could notbe adopted today. But, let me be clear, the Panel Report of DS543 is onlytemporarily not into force. China will continue to work with other WTO Membersto push for the Appellate Body to resume its normal function as soon aspossible, and we firmly believe that justice will only be delayed, but it willnot be absent in the end.

Effective actions should be taken to stopunilateralist and protectionist measures raging around the world. China sincerelyadvocates that we should take the decision of DS543 as an outstanding exampleand a good starting point for our future collective efforts to bettercountering the unilateralist and protectionist measures and safeguard the multilateraltrading system. China also hopes United States will make constructivecontribution to multilateral trading system and revitalize it again.

Thank you.

SECOND INTERVENTION:

I would like to respond to the United States’ allegations.

First, regarding the so-called China’s retaliationtariff measures, China strongly objects the United States’ assertion regardingChina’s retaliation tariff measures. The countermeasures taken by China are fullyconsistent with the basic principles of China's domestic law and internationallaw. I would like to reemphasize that China firmly upholds and supports themultilateral trading system. When faced with the severely WTO in-consistentmeasures, China has no other choice but to take necessary and appropriate measuresin such emergent situation in order to safeguard its legitimate rights andinterests as well as the multilateral trading system.

Second, regarding the U.S. allegation on forcedtechnology transfer, obviously, the United States has chosen to take a blindeye to China’s determination and efforts to opening up as well as China'sscientific and technological progress and its great contribution to globaleconomic growth. The United States’ allegation on the so-called “forced technologytransfer” has largely ignored the facts and is totally untrue. It seems thatthe United States mentioned again the Phase I agreement with China. The US justrepeated those arguments before the Panel, but clearly the Panel has rejectedthose arguments since the arguments are totally baseless and irrelevant. I knowthat U.S. colleagues still want to promote their false viewpoint again in thisregard, but obviously the DSB meeting is not an appropriate venue. Instead,what we should be focusing on is the serious damage that the U.S. unilateral tariffmeasures are imposing upon the multilateral trading system. The groundlessaccusations by the United States cannot conceal the unilateral nature and WTOin-consistency of its tariff measures.

10. APPELLATEBODY APPOINTMENTS: PROPOSAL BY ANGOLA; ARGENTINA; AUSTRALIA; bangladesh; BENIN;PLURINATIONAL STATE OF BOLIVIA; BOTSWANA; BRAZIL; BURKINA FASO; BURUNDI; CABOVERDE; CAMEROON; CANADA; CENTRAL AFRICAN REPUBLIC; CHAD; CHILE; CHINA;COLOMBIA; CONGO; COSTA RICA; CÔTE D'IVOIRE; CUBA; DEMOCRATIC REPUBLIC OF CONGO;DJIBOUTI; DOMINICAN REPUBLIC; ECUADOR; EGYPT; EL SALVADOR; ESWATINI; THEEUROPEAN UNION; GABON; THE GAMBIA; GHANA; GUATEMALA; GUINEA; GUINEA-BISSAU;HONDURAS; HONG KONG, CHINA; ICELAND; INDIA; INDONESIA; ISRAEL; KAZAKHSTAN;KENYA; REPUBLIC OF KOREA; LESOTHO; LIECHTENSTEIN; MADAGASCAR; MALAWI; malaysia;MALI; MAURITANIA; MAURITIUS; MEXICO; REPUBLIC OF MOLDOVA; MOROCCO; MOZAMBIQUE;NAMIBIA; NEPAL; NEW ZEALAND; NICARAGUA; NIGER; NIGERIA; NORTH MACEDONIA;NORWAY; PAKISTAN; PANAMA; PARAGUAY; PERU; QATAR; RUSSIAN FEDERATION; RWANDA;SENEGAL; SEYCHELLES; SIERRA LEONE; SINGAPORE; SOUTH AFRICA; SWITZERLAND; THESEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU; TANZANIA;thailand; TOGO; TUNISIA; TURKEY; UGANDA; UKRAINE; united kindom; URUGUAY; THEBOLIVARIAN REPUBLIC OF VENEZUELA; VIET NAM; ZAMBIA AND ZIMBABWE(WT/DSB/W/609/REV.18)

Thank you, Chair.

China supports the statement made by Mexicoon behalf of 121 Members cosponsoring this important proposal. We refer to ourprevious statements on this matter and reiterate the firm support to atwo-tier, binding, independent and impartial dispute settlement system, ofwhich the Appellate Body is an integral part.

Filling the vacancies of the Appellate Bodyis an unconditional legal obligation that should be bear collectively by thewhole Membership. Nothing could serve as a pretext to ignore this negotiatedtreaty obligation. The need to reinforce the negotiating and monitoring pillarsof the WTO can never be a legitimate cause to dismantle the Appellate Body andcripple the dispute settlement system. On the contrary, lack of multilateralenforcement will eventually impact the appetite for new rule negotiations. Withthe paralyzed Appellate Body, the violation of current rules can easily escapefrom sanctions. In that regard, without a strong dispute settlement system,negotiating and monitoring pillars cannot be genuinely reinforced.

Moreover, the fact that disputes continuesto flow into the WTO dispute settlement system and various means has beenadopted to cope with the Appellate Body’s paralysis does not mean that Memberscan live with the damaged WTO dispute settlement system as it is now. Withrespect to different arrangements such as non-appeal arrangement, they aredamage control in nature aiming to minimize the legal uncertainty resultingfrom the Appellate Body’s demise. None of them, including the MPIA, can offerequal security and predictability to the multilateral trading system as adispute settlement system with the Appellate Body. If the status quo becomes anew normal, the collapse of the WTO dispute settlement system is to happen,which will at the same time fundamentally destroy the multilateral tradingsystem.

In light of this, maintaining a two-tier, independent and binding dispute settlementsystem should remain to be the priority of the whole Membership. We call onevery Member including the United States to constructively participate in thesolution-based consultation with the view to restoring the Appellate Body atthe earliest date. China stands ready to further engage with other Members onthis urgent matter.

Thank you.

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