China's contributions in the DDA - from Ambassador Sun Zhenyu

Statement by H. E. Ambassador Sun Zhenyu At the Informal Trade
Negotiations Committee Meeting
Monday,August 11,2008 Posted: 22:07 BJT(07 GMT)
From:wto Article type:Original

Thank you Chairman,
China would like to thank you and the two Chairs of Ag and NAMA who
really have spent a great deal of time and tried to bridge the gaps of
members, we appreciate very much for your efforts.
We have tried very hard to contribute to the success of the round. It
is a little bit surprised that at this time the US started this finger
pointing. I am surprised because they are now talking about cotton,
sugar, rice of China as seems that we are not going to make any
efforts in the Round. Let me explain what China has contributed in the
round.
Because of our accession negotiations, our tariff in agriculture on
average is 15.2% and now bound at this level, which is lower than the
average of European Union, lower than Canada, lower than Japan, lower
than quite a number of other developed countries on average. But on
that basis, we are committed in this round to cut further down our
tariffs, the applied tariffs deeply. And in Nama, our average is 9%,
bound at that level. And in this round, we will cut about 30% in
applied level. So we are making contributions of 50% of the total
developing countries in terms of applied rate cut. So that is our
contribution.
During the Signaling Conference, my minister gave indications that in
spite of our very extensive commitments in our services schedules, we
are going to make new efforts, we are going to give signals to
consider on condition that others will reciprocate, some new
sub-sectors, and some improved offers, eventually the level of
openness of our service market will be roughly at the same level of
some developed countries. So that will be our contribution.
If you consider what the contributions that developed countries are
going to make, in OTDS the US is spending $7 to 8 billion this year or
last year, maybe a little bit more to 10 billion, but they are
offering $14.5 billion with a lot of policy space for themselves. And
in their tariff cut in agriculture, they are protecting their
sensitivities through sensitive products while they are saying "well
even if we have sensitive products for 5 or 4% of our tariff lines, we
will have TRQ expansions". But they can never expand their TRQ to the
level of China's TRQ quantities. In our case, our TRQ is 9 million
tons for wheat, 7 million tons for corn, 5 million tons for rice. How
about your quota, even after the expansion they will never pass half a
million tons. Where is the new market access to the developed
countries?
In NAMA, they are using erosion trying to cover their sensitivities,
keeping their tariff peak in textiles and garments for another 10
years. They will cover all their sensitivities through various
measures while they are asking China to participate in sectors where
we have great sensitivities, particularly in chemicals, in
electronics, in machinery. We need some kind of protection in those
sectors but they want to bring that down to zero or near zero. So they
have protected their sensitivities very well and now they ask us in
our sensitive areas: "you need more efforts to walk an extra mile
there". So we are in a very difficult position but we still want the
round just for the sake of the multilateral trading system. We have
been trying very hard to bridge the gap so we have some consensus on
erosion, we have indicated our contributions in services, and we have
tried very hard to make improvement for issues that we think we can
show some flexibility. But unfortunately on those important issues
such as SPs and SSM, which affect millions of poor farmers. That is an
area where we can't really make further concessions, particularly the
concerns of LDCs, SVEs, they can not accept too high a trigger or too
low a remedy there. Their concerns have to be considered, their poor
farmers' interests have to be considered. And we also have great
sympathies to the solution of the issue of cotton, and in NAMA, the
solutions for South Africa, for Venezuela, for Bolivia, I think there
are all important issues that we have to settle.
Having said that, Mr. Chairman, we will continue to work, to work with
you, with the two chairs who have made great contributions and also
with all other members, and try very hard to cover the last mile and
to try to make compromise. But the major players, the major developed
players, have to show their flexibilities. This is a development
round. They have to remember that this is a development round. If they
cover all their sensitivities by themselves, and keeping on putting
pressures on developing countries, I think we are going nowhere.
Thank you, Chair.
孙振宇大使在贸易谈判委员会非正式会议上的发言
2008-08-11 21:51 文章来源：wto
文章类型：原创 内容分类：新闻

感谢主席。
主席先生，您和农业及非农两位主席为弥合成员之间的分歧花了大量的时间，中国对你们所做出的努力表示诚挚的感谢。
我们竭尽所能，为多哈回合成功做出贡献。在此时刻，美国却开始进行指责，我对此感到有点惊讶。美国对中国的棉花、食糖、大米等问题指手画脚，好像要说明中国在本轮谈判中不会做任何努力。那么，我就简单介绍一下中国在谈判中已经做出的贡献。
在加入WTO的谈判中，中国将农产品平均关税削减到15.2％，并且约束在该水平。这个关税水平比欧盟低，比加拿大低，比日本低，也比很多其他发达国家的平均水平低。即便如此，中国仍然在本轮谈判中承诺将按成员约定公式进一步大幅削减我国的农产品关税，并且是实施关税。在非农领域，我们现在的平均关税只有9%，并约束在该水平。本轮回合，按照发展中国家最灵活削减方案，我们的实施关税水平将削减30%，并且在此水平上约束。从实施税率的削减来看，中国的贡献率占发展中国家总体贡献的50%。这就是中国的贡献！
在服务出价介绍会上，我的部长表示，尽管中国在其服务贸易减让表中已经做了广泛的承诺，我们仍将做出新的努力。在其他成员能够采取对等行动的前提下，我们将考虑在新的分部门改善出价。最终，我们的服务市场开放水平将基本上与发达国家的开放程度持平。这就是中国的贡献！
我们再看看美国的"贡献"：在"扭曲贸易的补贴总量"（OTDS）方面，美国今年和去年的支出在70－80亿美元之间，或者稍多一点接近100亿美元，但是美国只承诺将约束水平降低到145亿美元，为自己预留了大量的政策空间。在农产品关税削减方面，美国通过"敏感产品"来保护自己的敏感部门，并解释说："虽然我们有4％或5%的产品被列为敏感产品，但我们将扩大关税配额"。但是，美国的关税配额量不管怎么扩大，也不可能达到中国关税配额的量。中国小麦的配额量为900万吨，玉米为
700万吨，稻米为500万吨。你们的配额量又是多少呢？就算此次扩大后，你们的配额量也永远超不过50万吨。请问，美国提供的新的市场准入又在哪儿呢？
在非农领域，美国等发达成员利用弱小经济体提出的"优惠侵蚀"要求免费搭车，保护自己的敏感部门，想把纺织品和服装的关税高峰再保留10年。他们一方面通过各种方式来保护自己的敏感产品，另一方面却要求中国在其十分敏感的部门参加部门减让，特别是化工、电子和机械等领域。我们在这些部门需要适当的保护，但是他们却要求我们将这些部门的关税降为零或接近零。他们将自己的敏感产品保护得严严实实，却在我们的敏感部门要求
"你们需要在那里再做努力，再往前走几里路"。中国目前的处境十分困难，但是为了维护多边贸易体制，我们仍然想使本轮谈判获得成功。为了弥合分歧，我们做出了巨大努力。考虑到弱小经济体的特殊困难，我们在"优惠侵蚀"问题上进一步做出让步，促成共识，在服务贸易领域表示愿意做出贡献，在所有我们认为能显示灵活性的问题上不懈努力地改善出价。但是，在影响我们数百万贫困农民生计的"特殊产品"（SPs）和"特殊保障机制"（SSM）等重要问题上，我们真的不能再让步。特别是对最不发达国家（LDCs）和弱小经济体（SVEs），他们不能接受太高的触发水平和太低的救济水平。这些国家的关注必须得到考虑，他们穷苦农民的利益必须得到基本保障。同时，中国对非洲棉花四国和南非、委内瑞拉和玻利维亚等成员的关注也深表同情。我认为这些重要问题都需要解决。
主席先生，总而言之，中国将继续努力，和您一起，和已经做出不懈努力的农业和非农两位主席一起，和所有的成员一起，为完成最后的谈判，为达成妥协而努力。但是，作为主要参与者的主要发达成员应该显示出他们的灵活性。他们不要忘记本轮谈判是一个以发展为主题的回合。如果发达成员一方面把自己的敏感产品都保护起来，另一方面却继续对发展中成员施压，我想我们将一事无成。
感谢主席。

Global food crisis: what went wrong

In a recent speech in India, Lamy made some interesting statements, including the following:

"The negotiations in the WTO on agriculture subsidies and market access are part of the medium and long term solution to the food shortage. We know that we need to increase agriculture production in developing countries and one of the reasons why their production and exports have been discouraged is because of trade distorting subsidies and high tariffs in rich countries."

One can't help wondering what are the other possible reasons?

CSI-Geneva: Who killed (or tried to kill) the DDA?

While it is a bit premature to conclude that the DDA is dead, the finger-pointing game has already started. Below is an autopsy provided by the Trade Observatory is a project of the Institute for Agriculture and Trade Policy.

What caused WTO collapse? It was cotton subsidies, stupid!

August 6, 2008
By Devinder Sharma

In an editorial entitled 'The Next Step for World Trade' (Aug 2, 2008), the New York Times wrote: "The battle lines for the new world order were exposed at the World Trade Organization this week. The breakdown of the Doha round of trade negotiations over a clash between the United States and China and India about farm protection underscores how these new economic giants are changing the balance of power."

In another Reuters dispatch (Aug 2), President George Bush reportedly discussed the collapse of the world trade talks over phone with the Brazilian President Luiz Inacio Lula da Silva expressing disappointment over the failure and reaffirming his commitment to reaching an agreement.

International media meanwhile has shifted the blame squarely onto India and China for the failure of talks. India is accused of stalling the negotiations in order to protect its agriculture. India's trade minister Kamal Nath on the other hand is lapping it all up, and has used this to tirelessly project himself as a savior of the farming community, by time and again reiterating "I am willing to negotiate commerce, but not livelihood security of 650 million subsistence Indian farmers."

But did the talks actually fail when India refused to compromise over a proposal - special safeguard mechanism - that is supposed to protect poor farmers from a flood of imports? Or were it because of something more sinister, cleverer, and a crafty masterstroke that in reality protected American agriculture? Does it mean that two emerging economic giants - India and China - who many believe are likely to tilt the geopolitical balance, walked straight into a well-laid out trap?

You guessed it right. The talks did not fail on the protective shield (SSM) that India and China wanted so as to save their farmers from an import deluge. The WTO talks actually collapsed because the US did not want to make any commitment to cut its massive federal subsidies to cotton growers. Any promise to cut cotton subsidies would have been politically suicidal.

It is as simple as that.

Before you wonder how and why, let me take you through the maze of events that led to the failure. I began to see through the political mischief (or should we call it political sagacity) when Kamal Nath told some journalists that he actually was surprised at the stern position the US Trade Representative Susan Schwab took when the SSM issue came up for negotiations in the finale session. "She went out of the room for sometime and when she returned she simply dug her heels."

Read this in conjunction with what the European Union Trade Commissioner Peter Mendelson has to say: "After that, a US official simply does not show up, when negotiations resume and Susan Schwab, heading into the finales of the negotiations, stopped off in the press room 'to get her rebuttal in first.'"

The proposal on SSM that was out rightly rejected by the US was drawn by the EU in a 'last-gasp bid to unlock an impasse'. The compromise proposal was in reality accepted by the G-7 countries, including the US, as a way to take the negotiations forward.

Both India and China had accepted the EU proposal (with some reservations that could have been ironed out). The new proposal on SSM talked of zero triggers (instead of 40 per cent proposed earlier in the Lamy draft) with a tough rider that expected developing countries to establish the 'demonstrable harm' to food security, livelihood concerns and rural development before the mechanism could be put to use.

Writing in the SUNS bulletin (July 31), the ever agile Martin Khor of the Third World Network says: "Despite the major negative elements, Kamal Nath told the media that he had accepted the proposals, but the US had rejected it". Accordingly, the next morning officials of the G-7 countries had labored for three hours to produce an alternative SSM model, which they presented to G-7 ministers. Quoting Kamal Nath, Martin Khor says that it was Schwab again who rejected the new draft.

Why did Susan Schwab reject the compromise proposals? What has it to do with the "missing US official" who was absent throughout the final round of negotiations? Well, this is where the missing link actually lies. Let us investigate a little more before we find out why the US refused to move ahead.

Reacting sharply to Peter Mendelson's criticism of the US position, Gretchen Hamel, who is the spokesperson for Susan Schwab, replied: "the trade official who missed the resumption of negotiations was in consultation with Schwab at that time." And if you read this with what Kamal Nath had said earlier, Susan Schwab was in reality in touch with Washington DC through that 'missing official".

Nothing wrong, you would say. I agree. But what is obvious is that he carried a directive from Washington DC for Susan Schwab, which she faithfully delivered after she returned to the negotiating table. More surprisingly, before she came into the negotiating room, she had already conveyed it to the media.

Why was Susan Schwab in such a tearing hurry?

Now that is where the crux lies. And Martin Khor provides the answer: "Many ministers, officials and diplomats have been speculating that the SSM was not the real issue that was irreconcilable. In the most widespread view, the US really did not want to face the cotton issue, which was the next item on the G-7 agenda once SSM was settled." What Susan Schwab had therefore succeeded in doing was to deflect attention from the cotton issue, which was the next (and the last) item on the agenda.

The US had to stop the negotiations reaching the cotton issue, and do it fast. The talks had therefore to be derailed. There was no other escape.

No wonder, the leader of the G-33 group and the Indonesian trade minister Mari Pangestu later was quoted as saying: "It is like accusing us of a crime that we did not commit."

Cotton subsidies are a politically volatile issue. The US has already lost the WTO dispute on cotton subsidies. Ever since the cotton issue erupted on the international scene just prior to the 2003 Cancun Ministerial, the US has received flak for protecting its 20,000 cotton growers as a result of which millions of cotton growers in the four African countries - Benin, Burkina Faso, Mali and Chad - continue to languish in poverty. The disastrous impact is also being borne by Indian cotton farmers who are priced out.

In 2005-06, the US provided an estimated US $ 4.7 billion as subsidy to its miniscule population of cotton growers for producing a crop worth $ 3.9 billion. This year, the cotton subsidies have come down because quite a significant proportion of the area under cotton has been diverted for bio-fuels. And regardless of the decision of the WTO Dispute panel, the US has made provision under the US Farm Bill 2008 to enhance cotton subsidies in the next five years.

What it means is that while cotton farmers in developing countries are pushed to penury, and many of them commit suicide unable to bear the burden of an unjust trading regime, US cotton can easily go on a Mediterranean cruise holiday.

Any promise to cut cotton subsidies, and that too with the elections around the corner, would have created a political storm back home. The WTO mini-Ministerial on the other hand would have impressed upon the US to cut down its cotton subsidies at least by 70 per cent (given that the US had agreed to reduce its trade distorting subsidies by 70 per cent, even if it was only on paper), something that George Bush' government couldn't afford.

And if the US chose not to cut down on cotton subsidies, it couldn't have escaped all around criticism. The US would have been called the real villain of free trade, the fall guy, or the 'rogue' country. The political cost of treading on the cotton subsidy issue was therefore too heavy.

The WTO talks had to be torpedoed.

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One China, Four Seats (in the WTO); One Country, Two Candidates.

On July 31st, the WTO announced that the Committee on Subsidies and Countervailing Measures has finally resolved the "long-standing issue" of vacancies on the Permanent Group of Exports (PEG). The stalemate started in 2005 when China blocked the nomination of Prof. Lo Changfa, former dean of the law school of National Taiwan University and the most distinguished WTO authority in Taiwan. In retaliation, Taiwan tried to block China's candidate to the AB last November (for some background info on this, see here). With the victory of the KMT over the pro-independent Democratic Progressive Party (DPP) in Taiwan this spring, it seems that, to the relief of most WTO Members, the political back-stabbing days between China and the Separate Customs Territory of TPKM (Taiwan, Penghu, Kinmen and Matsu, which is, BTW, the official name of Taiwan in the WTO) are finally over. China finally agreed to give Taiwan a break by unblocking the Taiwanese candidates. In return, Taiwan also agreed to support Prof. Zhang Yuqing, who is China's candidate to the same body. Thus, now the small group of five experts counts two Chinese among its members, with China and Taiwan sharing the glory. In a similar vein, two officials from China and Taiwan were elected to chair the TBT and TRIMS committee in April this year. Will this "one country, two candidates" arrangement work in the future?

Internationlization of legal education services

From July 26th to August 2nd, I was in Palm Beach, Flordia for the 61st Annual Meeting of the Southeastern Association of Law Schools (SEALS), the largest regional association of law school in the US. I was invited to speak on the Panel on Comparative Business Regulation, but also participated in other panels, including one on the international programs by US-based law schools. I was surprised to find that, even though the US has been aggressively pushing for the opening up of services markets worldwide, most US law schools (except some of the elite schools) have been rather late in their internationalization efforts. On the other hand, many law schools in Europe and Asia are way ahead in this game. Unless more efforts can be put into this, the employment prospects of greduates of US law schools might be further dimmed with the decline of the US influence worldwide.

Collapse of DDA: Blame it on China?

This is my take on China's position in the DDA, which appeared in the first page of the WSJ yesterday.

China picks its side in world trade talks

Developing nations, not richer partners, offer important link

Andrew Batson. The Wall Street Journal Asia. Hong Kong: Jul 31, 2008. pg. 1

BEIJING -- China's willingness to let the latest round of global trade talks collapse is a sign of how the emerging giant's ties with other developing nations are becoming increasingly important, as it sees fewer future gains from negotiations with rich countries like the U.S.

The talks at the World Trade Organization in Geneva foundered after member countries couldn't agree on a proposal to allow developing nations to use special "safeguard" tariffs to shield their farmers from floods of low-priced imports. Wealthy nations led by the U.S. heaped blame on India and China for blocking a global deal over a narrow point. The poorer countries, chiefly India, in turn blasted the rich nations for coddling their farmers with subsidies at a time of record food prices.

Some analysts said an unfavorable political calendar -- with the U.S. president a lame duck and India's coalition government facing elections by May -- was the real culprit. Both those governments clearly believed domestic political constraints prevented them from compromising on an issue that affects their powerful farm lobbies, observers said.

In an interview, India's commerce and industry minister, Kamal Nath, said he expects only a "pause" of a few months in global trade talks, not a complete breakdown. Mr. Nath said he had just hewn to a consistent position in the talks that India was willing to negotiate on trade issues but was unwilling to compromise "livelihood security."

But China's late-hour emergence as a swing factor was a surprising shift in the dynamics of the Doha Round of trade talks -- and not only because it marked a departure from Beijing's usually low-key negotiating style. Its vocal support for India's position, even though the issue of agricultural-safeguard measures is less significant for China, effectively negated a chance to expand markets for Chinese exporters in favor of building political ties with other lower-income countries.

"The Chinese leadership has tried to adopt a strategy to sacrifice economic interests to win the goodwill of developing countries," says Henry Gao, a former WTO official who now teaches trade law at Singapore Management University. "China has always claimed that since it itself is a developing country, its interests will always lie with its developing-country brothers."

As the world's second-largest exporter after Germany, and a major producer of everything from tennis shoes to auto parts, China has little in common with the smaller developing countries that struggle to break into rich-country markets. With an average nonfarm tariff of 9%, China's market is also relatively open: India's average rate is more than 16%. In that respect, China's interests are closer to the wealthy countries who were trying to bring down the high tariff barriers in developing nations.

Publicly, however, China has cast its lot with the developing countries. The state-run Xinhua news agency blamed "selfish and short- sighted actions" by rich countries for the collapse and warned that trade protectionism will be on the rise. "The negotiations are not supposed to produce a deal just for protecting and promoting prosperity in rich nations," the state-run China Daily newspaper wrote in an editorial Wednesday.

China's trade negotiator said the country is ready to bolster trade ties with willing partners outside the WTO process. "On the basis of equality and reciprocity, China is ready to further intensify the bilateral trade and economic cooperation with the members present here," Commerce Minister Chen Deming said in Geneva, expressing particular interest in ties with the so-called least-developed countries and small-and-vulnerable economies.

Indeed, China's trade with other emerging markets -- from Asian neighbors like Indonesia and Malaysia to the Persian Gulf and Africa -- has been booming, even as its exports to the U.S. have slowed sharply this year. China has been particularly active in developing economic ties with Africa, with its companies building infrastructure projects there and striking large mining deals.

Some of those relationships have come under fire by Western critics, most notably in the case of China's ties with conflict-ridden Sudan and the repressive regime in Myanmar. But they do highlight how China seems to be looking for future growth outside its traditional markets of the U.S. and Europe. And that gives China less incentive to participate in WTO negotiations that are still dominated by those big powers.

"There's not so much for them to gain" because the U.S. and European Union markets are largely open already, says Matthew McConkey, director of Asian trade for the law firm Mayer Brown JSM in Beijing. "I don't know what the carrot is for them in this situation."

The biggest trade issue for China these days is the rising number of "safeguards" and antidumping measures used by rich countries to block imports of some products from China. But the global trade talks never seriously discussed eliminating those measures, which are politically important to many governments. So it could be difficult for negotiators to come home with an agreement that would make a material difference to a country that exported $1.22 trillion of goods last year.

Still, some Chinese scholars say a big trading country like China would be one of the largest beneficiaries from a WTO deal that led to a further freeing-up of global trade.

"For the long term, we still hope that there can be a unified global trade framework," says Mei Xinyu, a scholar at the Chinese Academy of International Trade and Economic Cooperation, a government think tank in Beijing. "China is large country that exports to almost every country in the world and imports from everywhere as well. Any bilateral or regional agreement cannot substitute for a true global trade arrangement."

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Paul Beckettin New Delhi contributed to this article.