US, EU, Japan Press China at WTO over Promises to Open Markets

Reviewed by Takahiro MIYAO

Article:
US, EU, Japan Press China at WTO over Promises to Open Markets
International Herald Tribune (10/15/2007)
http://www.iht.com/articles/ap/
2007/10/15/business/EU-FIN-ECO-WTO-China.php

Comments:

According to a report in International Herald Tribune (see the link above), tensions flared up during a review of China's trade policies at the WTO's Market Access Committee, where China only partially responded to questions posed by the US, the EU and Japan, whose representatives criticized China about its failure to live up to the promises its made when it joined the WTO six years ago. In particular, the US is accusing China of restricting exports and manipulating prices on raw materials, which tend to give Chinese manufacturers a competitive advantage over American companies. Japan complained about China's high tariff rates on some electronics products, whereas the EU pointed out China's unfair restrictions on its import of chemical, pharmaceutical and other foreign-made products.

In response, China argued that the WTO's Market Access Committee was not an appropriate place to examine various issues, which China claimed were not part of its WTO commitments. However, what China should realize is the high degree of frustration and dissatisfaction that Western countries are feeling about the fact that China has been flooding their markets with its cheap exports and accumulating massive foreign reserves which China is now investing in their key industries freely, while only partially opening up its own market to them. Therefore, China should take necessary steps to ease this tension as soon as possible, before it blows out of proportion in the political context.

In this context, Japan's actual position is somewhat different from the Western countries, as the economic relationship between China and Japan is more interdependent and more balanced in trade and investment than that between China and the US or the EU. As a result, the level of frustration on the part of Japan seems not as high as that of the Western countries. Therefore, Japan might as well act as a mediator or moderator to help resolve this kind of tensions and disputes, which Japan has once experienced with the US and the EU in its own post-war economic development. That would be also in line with Prime Minister Fukuda's foreign policy agenda for Asia.

Acknowledgment:
This review is adopted from the following blog (with its Japanese translation):
http://glocom.blog59.fc2.com/blog-entry-466.html