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Last updated at: (Beijing Time) Wednesday, October 22, 2003

US manufacturers' wish to complain to WTO about RMB: a good thing for China

If the WTO (World Trade Organization) really gets involved in this dispute, it will be a good thing for China. At the time when China acceded to the WTO, its aim was to have a criterion for judging and solving future disputes with foreign chamber of commerce.

Frank Vargo, vice-president of the NAM in charge of international economic affairs, recently claimed that the "perfect US dollar union" to which NAM is a party would complete the fund-raising work within several weeks and would formally submit a trade investigation application to the US government concerning China's manipulation of the RMB exchange rate, demanding the US government to lodge a complaint to the WTO.

The weapon wielded by US manufacturers this time is Article 301 of US Trade Law for the following reason: The Chinese government's purchase of large amounts of foreign exchange year in year out and its manipulation of the RMB exchange rate in order to gain export advantages are in violation of WTO regulations and China's promise made to the IMF.

Zhang Hanlin, director of the World Trade Research Institute of the Foreign Economic and Trade University, told China's "News Weekly" that this kind of accusation is completely untenable.

Firstly, during the negotiation on its entry into the WTO, China never promised that the RMB must realize free conversion and China must totally abolish the foreign exchange control system. China only mentioned in the protocol on its accession to the WTO that Chinese economic merger into the world economy objectively requires that China make greater reform to its foreign exchange control system, but neither timetable, nor concrete content was set up for the reform.

The NAM charge China with violation of its IMF promise is groundless. After its seat in the IMF was restored in 1980, China promised that as a member under Article 8 of IMF, free exchange of its money under current account should be realized. Later in the exchange rate system reform in 1994, China realized the free conversion of the RMB under current account. But this was the only promise China had made.

Since "the US dollar union" has a definite representation among manufacturers, Lawyer Tao Jingzhou, chief representative at the Beijing Office of Coudert Brothers law office, held that this might possibly be a warm-up for the trade war started by US enterprises. He warned that Chinese entrepreneurs must pay close attention to the development of the situation, so as to cope with, at an early date, possible US adoption of trade protection measures.

But in the opinion of Professor Zhang Hanlin, the possibility for the establishment of a lawsuit is very little. "This is only a political card played before the year of US general election, China need not pay too much attention to it," said the professor.

To file a lawsuit, the NAM has to go through two passes: First is whether US Trade Office would accept the trade investigation application and start investigation.

The "provisions of US Trade Law are divided into three ordinary articles, three super-class articles and three special articles." Zhang Hanlin told China's "News Weekly", the foundation for the lawsuit lodged by the NAM contains three ordinary and three super-class articles, but they only have the power to make an appeal, the decision on whether investigation be started shall be taken jointly by the US Trade Representative Office, the US Department of Commerce and the US Congress, the appraisal would take a long course.

Furthermore, the NAM which lodged a charge against the RMB exchange rate this time is the main Sino-US trade deficit sufferer. But a vast number of US transnational companies have greatly benefited from free trade. For these enterprises and companies, demanding the revaluation of the RMB is not a sensible decision. What US trade office is to regulate is not only the group interests of the NAM alone, but due consideration is also given to the group interests of many other enterprises and companies, therefore, the possibility of accepting the NAM application and starting 301 investigation is next to nothing.

Wang Youli, director of the America/Atlantic Department of the International Economic-Trade Cooperation Institute under the Department of Commerce, also held that the space for US interference in Sino-US trade in the form of domestic legislation is shrinking. This can be clearly seen from the failure of American use of "Article 301" to protect its iron and steel industry.

Even if this appeal is established within the United States, there is still a second pass for whether China needs to respond to prosecution: The examination and ruling of the WTO. Professor Zhang Hanlin pointed out that the possibility for the WTO to take up this case is very little. Firstly, the WTO does not exercise jurisdiction over the exchange rate matter. Secondly, as mentioned above, China has not broken its promise in the aspect of exchange control.

Furthermore, in the eyes of Zhang Hanlin, if the WTO really gets involved in this dispute, it would be a good thing for China. "When China tried hard to join the WTO, its aim was to have a criterion for judging and solving future disputes with foreign chamber of commerce."

Zhang Hanlin said that when the NAM laid claim to its own rights, it must not forget the purpose of WTO free trade and the balance between right and obligation. As a matter of fact, the rights obtained by every country from the WTO are unbalanced. For instance, the US manufacturing industry suffers some loss from trade, but other industries and transnational companies distributed around the globe have accumulated huge amounts of wealth from free trade. To balance the unbalanced benefits from free trade, it needs to rely on the government's self-improvement, rather than blame the exchange rate policies of foreign governments.

The article is carried on China's News Weekly, and translated by People's Daily Online
　

http://english.peopledaily.com.cn/200310/22/eng20031022_126622.shtml

China's exchange rate policy not violate WTO: US trade representative

26-02-2004

2004/02/26

China's exchange rate policy doesnot violate the rules of the World Trade Organization (WTO), US Trade Representative Robert Zoellick said Wednesday.
"There's really no WTO obligation not to have a fixed exchange rate," Zoellick told reporters before giving a speech to the Asia Society.
Zoellick said he did not think China's pegged exchange rate violates the WTO.
"You will recall the United States had a fixed exchange rate until 1971, when we were a member of the GATT," Zoellick said. TheGATT was the predecessor organization to the WHO.
The National Association of Manufacturers and other members of the Fair Currency Alliance plan to file a "section 301" petition in coming weeks to ask Zoellick's office to investigate whether a case could be brought against China's currency practices at the WTO.

Xinhua News Agency, 26 Feb 2006

中国称美方向WTO申诉将损害双边贸易

2007年04月11日17:36
　

中国周三警告称，美国针对中国向世界贸易组织(WTO)提起两项申诉有可能影响中美两国的经贸关系。

中国商务部新闻发言人王新培在一次新闻发布会上表示，美国本周将中国知识产权问题、出版物市场准入问题诉诸WTO争端解决机制的做法有悖两国领导人大力发展双边经贸关系、妥善处理经贸问题的共识，“此举将严重损害双方在此方面业已建立的合作关系。”

　

美国方面周二在日内瓦向WTO提起申诉，称中国未能保护知识产权以及中国对美国进口图书、电影及音乐设置市场障碍的行为违反了其贸易承诺。

当有记者问到中国政府将对该申诉作何应对时，王新培表示外交人士正在对此进行商讨。

当记者要求王新培证实有关北京方面计划在5月份进行的贸易谈判中向美国采购数十亿美元商品的报导是否属实时，他未给出正面答复，只是表示中方正积极筹备此次会晤，这也是中美战略经济对话的日程之一。

此前有报导称，中国计划向美国购买至少价值125亿美元（约合95亿欧元）的商品，这显然是为了缓解两国在严重贸易失衡问题上的紧张局面。

美国有议员威胁称，如果中国未能放松对汇率的控制，将对其采取行动。有些批评家认为中国政府对汇率管制过严是造成美国对华贸易出现巨额逆差的重要原因。

王新培还指出，中国3月份贸易顺差大幅减少或许与税收政策的调整有关。由于得知政府可能要对出口政策进行调整，出口商纷纷赶在政策变动之前提早发货。

他谈到，这只是其中一个可能的因素，对此商务部还要进一步研究。

中国政府周二公布，3月份贸易顺差由2月份的237亿美元（约合180亿欧元）大幅收窄至69亿美元（约合52亿欧元）。但经济学家认为之所以出现如此变化或许是因为出口商为了赶在国家可能对出口退税政策作出调整前而提前发货，因此他们预计今后的贸易顺差将继续扩大。

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