Table Of ContentLei Zhang
Xiaowen Tan Editors
A Chinese
Perspective
on WTO
Reform
A Chinese Perspective on WTO Reform
·
Lei Zhang Xiaowen Tan
Editors
A Chinese Perspective
on WTO Reform
Editors
Lei Zhang Xiaowen Tan
Shanghai University of International Shanghai University of International
Business and Economics Business and Economics
Shanghai, China Shanghai, China
ISBN 978-981-19-8229-3 ISBN 978-981-19-8230-9 (eBook)
https://doi.org/10.1007/978-981-19-8230-9
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature
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Contents
The Influence of WTO Agreements on China’s FTAs .................. 1
Zhongmei Wang and Bizhou Yang
Evolution of Sustainable Development Preservation in RTAs:
Progression and Challenges for China ............................... 29
Haifeng Wang
Intellectual Property Protection in Free Trade Zones: Main Issues
from China’s Perspective in the International Context ................ 59
Hong Yang and Hongsong Song
Divergences in WTO E-commerce Negotiations and Promotion
Paths ............................................................. 97
Jie Yang and Huiling Lin
Free Pass or Constructive Response? Assessing China’s WTO
Performance ...................................................... 115
Yichou Han
Empirical Evolution of the WTO Security Exceptions Clause
and China’s Discourse ............................................. 139
Yong Liang and Zhijie Peng
Trade Control and WTO Law: Examining the Adequacy
of the GATT Exception ............................................ 171
TaoDuand ZiwenYe
v
The Influence of WTO Agreements
on China’s FTAs
Zhongmei Wang and Bizhou Yang
Abstract All the China’s FTAs in force have been concluded after its entry into the
WTO, and the obvious influence of the WTO agreements can be found in the setting
of their framework, language and concrete provisions. In the past two decades, the
model rules provided by the WTO, the proactive commitment to openness advocated,
and the deepening political and economic links with partnership countries have all
had a substantial positive impact on the development of China’s FTAs. In general,
China is not the fastest among Asian countries to negotiate and conclude FTAs, but it
has made a big leap in the past decade. After 2010, China began to accelerate the
implementation of its Free Trade Area Strategy and planned to establish a global
FTA network, which is in line with the reality that China is deeply embedded in the
global production network. However, China’s FTAs in recent years have still not had
the features of strategic trade policy, but have developed over the basis of the WTO
rule system.
1 The Development of China’s FTAs and Its Free Trade
Area Strategy
1.1 The Expansion and Deepening Trend of China’s FTAs
China’s first effective modern Free Trade Agreement (FTA) was signed in 2005 with
Chile, four years after China’s accession to the WTO. As of May 2022, China has
concluded twenty-one FTAs (including the Mainland, Hong Kong and Macau Closer
Economic Partnership and Trade Arrangement), with ten FTAs under negotiation,
and 8 potential FTAs announced as under study by the Ministry of Commerce (see
Table 1). In addition, China has formally applied to join the CPTPP and DEPA.
B
Z. Wang ( )
Institute of World Economy, Shanghai Institute for International Studies (SIIS), Shanghai, China
e-mail: [email protected]
B. Yang
Institute of World Economy, Shanghai Academy of Social Sciences, Shanghai, China
© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 1
L. Zhang and X. Tan (eds.), A Chinese Perspective on WTO Reform,
https://doi.org/10.1007/978-981-19-8230-9_1
2 Z.WangandB.Yang
Table 1 List of China’s FTA
FTA concluded FTA under FTA under
partner countries and regions
negotiation study
Asia RCEP China-Japan Nepal
and South
Korea
ASEAN GCC
ASEAN (10 + 1 Sri Lanka Bangladesh
upgraded)
Singapore Israel Mongolia
Singapore Palestine
upgraded
Pakistan
Pakistan Phased II
Maldives
Georgia
South Korea South Korea
Phase II
Cambodia
CEPA
Oceania New Zealand Fiji
(with upgraded)
Australia
America Peru Peru upgraded Colombia
Chile Panama Canada
Chile upgraded
Costa Rica
Europe Iceland Norway
Switzerland Moldova Switzerland
upgraded
Africa Mauritius Papua New
Guinea
Source http://fta.mofcom.gov.cn/
Although China’s FTAs practice started comparatively late, and still focuses on trade
in goods and on further reduction of tariffs on the basis of WTO most-favored-nation
treatment, the FTAs contribute much to promoting trade with partner countries and
regions.
The first to start FTA negotiations with China was ASEAN in 2002. However, it
took 8 years for China to finally reach an FTA with ASEAN in 2010. Comparatively,
the fastest negotiation and the earliest concluded one is the China-Chile FTA (2006).
Almost all FTAs were initiated after China joined the WTO in 2001, and especially
explosive growth has occurred in the past 10 years. Judging from the FTAs that have
TheInfluenceofWTOAgreementsonChina’sFTAs 3
been reached, are being negotiated, and are being studied, in addition to the obvious
intent to cover the five continents as much as possible in terms of geographical layout,
the degree of commitments, the focus on trade in specific goods, and the main text
and wording have varied a lot.1 It is difficult to sum up a unified and clear model and
pattern of China’s FTAs in force.
However, from the historical perspective, the content of China’s FTAs in recent
years has expanded significantly compared to the previous period. Concluded in
2006, the FTA between China and Chile2 has only 121 articles and 14 chapters in
total. Its main content focuses on tariff reduction and facilitation of trade in goods.
The framework structure and written expression are close to the General Agreement
on Tariffs and Trade of 1994. The two sides signed the Supplementary Agreement
on Trade in Services in April 2008, which was implemented in August 2010. In
September 2012, a supplementary agreement on investment was signed, which was
implemented in February 2014. The upgraded version signed in 20173 consists of
a preamble and 9 chapters. In addition to upgrading the rules in four areas of the
original agreement—market access for trade in goods, trade facility, rules of origin
and economic and technical cooperation—it also adds the regulation of customs
procedures to the trade facilitation section, and adds 4 new chapters covering e-
commerce, competition, environment and trade in service.
The expansion and deepening of the FTAs is in line with the expansion and
deepening of the trade and investment between the signatories.4 Chile is the first
Latin American country to establish diplomatic relations with China, the first Latin
American country to sign a bilateral agreement with China on China’s accession
to the WTO, and the first Latin American country to sign a free trade agreement
with China. Since 2012, China has become Chile’s largest trading partner, largest
export market and fourth largest source of imports. Chile has become China’s third
largest trading partner in Latin America.5 Just take Chile’s advantageous agricultural
products as an example. Chile’s fruit exports to China have increased from US$67
million in 2007 to US$1.262 billion in 2016, an increase of nearly 19 times, becoming
the first source of fresh fruit imports in China.6
1 Qu Yue, et al., “China’s FTA Trade Partner Selection from the Perspective of Global Value Chain:
Base on the Data of Trade Value Added”, Journal of Finance and Economics, Vol. 47, No. 6, June
2021, pp. 33–46.
2 Free Trade Agreement Between the Government of The People’s Republic Of China And The
Government Of The Republic Of Chile, at http://fta.mofcom.gov.cn/chiletwo/xieyi/myxd_en.pdf.
3 Protocol to Amend The Free Trade Agreement And The Supplementary Agreement On Trade In
Services Of The Free Trade Agreement Between The Government Of The People’s Republic Of
China And The Government Of The Republic Of Chile, http://fta.mofcom.gov.cn/chiletwo/xieyi/
bcyds_en.pdf.
4 Baier Scott and Jeffrey Bergstrand, “On the Economic Determinats of Free Trade Agreements,”
Journal of International Economics, Vol. 64, No. 1, 2004, pp. 29–63.
5 http://www.gov.cn/zhengce/2017-11/12/content_5239022.htm.
6 Id.
4 Z.WangandB.Yang
The most notable development in China’s FTAs is the RCEP. Although FTAs
have also been concluded with a few European, Latin American and African coun-
tries, China’s partner countries are still concentrated in Asia and Oceania, which are
geographically close. Beyond all previous FTAs in the Asian region, the RCEP will
include the three largest economies in this region—China, Japan and South Korea,
especially China, a huge manufacturing base and consumption market. The integra-
tion of production in this region will bring substantial benefits.7 It is worth noting
that the RCEP brings new impetus to the transferring and expansion of supply chains
in the region with inclusive rules of origin and progressive integration.8
The rules of the RCEP are significantly upgraded compared to all China’s previous
FTAs. The RCEP consists of 20 chapters, and the framework is essentially based on
the WTO agreements, while at the same time incorporating many WTO+ contents,
including e-commerce, competition, government procurement, small and medium-
sized enterprises, economic and technological cooperation and other chapters. In
the chapters including rules of origin, customs procedures and facilitation, trade in
services, and movement of natural persons, its provisions have also been significantly
improved and expanded compared with WTO rules. It can be said that the RCEP is
a milestone for China towards advanced and comprensive partnership,9 although it
has not fundamentally broken through the WTO’s rule framework.
1.2 China’s Free Trade Area Strategy
Some Chinese scholars have pointed out that the report of the 17th National Congress
of the Communist Party of China (2007) which proposed to “implement the Free
Trade Area Strategy and strengthen bilateral and multilateral economic and trade
cooperation”, is the first official document in which China has announced that the
establishment of a free trade area network is a national strategy.10 And the Eighteenth
National Congress of the Communist Party of China (2012) further proposed to
accelerate the implementation of the Free Trade Area strategy.11 The Third and Fifth
Plenary Sessions of the 18th Central Committee of the Communist Party of China
proposed to accelerate the implementation of the Free Trade Area Strategy on the
7 See Zhang Yan, “RCEP Regional Value Chain Reconstruction and China’s Policy Choice-Based
on the Construction of the ‘Belt and Road’”, Asia Pacific Economy, Issue 5, 2020, pp. 14–24.
8 For example, KPMG, “Rethinking Supply Chain: RCEP impact on the supply chain in ASEAN
and beyond”, Jan. 2021, at https://assets.kpmg/content/dam/kpmg/sg/pdf/2021/01/RCEP-impact-
on-the-supply-chain-in-ASEAN-and-beyond.pdf; The Economist Intelligence Unit, RCEP set to
strengthen Asian Supply Chains, at https://www.eiu.com/n/rcep-set-to-strengthen-asian-supply-cha
ins/.
9 Liu Keke and Zhang Yan, “Four “Value-Added Points” of RCEP Trade Facilitation to Chinese
Import and Export Enterprises,” China Customs, Issue 3, 2021, pp. 26–28.
10 Chen Wenjing, “An Analysis of China’s Free Trade Area Strategy and Future Development”,
Frontiers of Theory, No. 17, 2008, pp. 9–12.
11 Id.
TheInfluenceofWTOAgreementsonChina’sFTAs 5
basis of surrounding areas and to form a high-standard free trade area network facing
the world.12
At the study meeting of the Political Bureau of the Central Committee of the
Communist Party of China on December 5, 2014, General Secretary Xi Jinping
proposed to speed up the implementation of the Free Trade Area Strategy, speed up
the construction of a new open economic system, and take the initiative to open up to
the outside world to gain the impetus of economic development and win international
competition.13 In December 2015, the State Council issued the “Several Opinions
of the State Council on Accelerating the Implementation of the Free Trade Area
Strategy”,14 proposing to “gradually build a high-standard free trade area network
based on the surrounding area, radiating the ‘Belt and Road’, and facing the world”.
The “Several Opinions of the State Council on Accelerating the Implementation
of the Free Trade Area Strategy” (hereinafter referred to as “Several Opinions”)
in 2015 pointed towards, in the near future, speeding up the ongoing free trade
area negotiation process, and gradually upgrading existing free trade areas when
conditions are met. China will actively promote the establishment of free trade areas
with most of its neighboring countries and regions, so that the proportion of China’s
trade with free trade partners in its total foreign trade will reach or exceed the level
of most developed countries and emerging economies; form a global free trade area
network including neighboring countries and regions, covering countries along the
“Belt and Road” and radiating important countries on five continents, enabling most
of its foreign trade and two-way investment to achieve liberalization and facilitation.
It can be seen that the “Several Opinions” is the first time that an official document
has described the Free Trade Area Strategy in more detail.
Through the “Several Opinions”, China has clearly declared that the Free Trade
Area Strategy has two targets: one is to promte and expand the construction of free
trade areas; the other is to accelerate the construction of high-level free trade areas.
The former emphasizes the scope and layout from the periphery to the Belt and
Road to the global network; the latter emphasizes the comprehensive liberalization
and facilitation of trade in goods, trade in services, investment, and movement of
natural persons, with the coherence in the rules and policies setting and adminis-
trative implementing. The Free Trade Area Strategy is believed to guide China’s
FTA practices since 2016. As a result, China has since launched a number of FTA
upgrading negotiations, which are based on the second target of the Free Trade Area
Strategy. The implementation of the first target, with the cooperation of the Belt and
Road Initiative and the construction of domestic pilot free trade zones, may take time
to present a different FTA map.
When China first proposed the Free Trade Area Strategy, FTA negotiations around
the world were in full swing.15 Among those, the conclusion of the US-led TPP was
imminent, and imposed great external pressure on China. The proposal of the Free
12 Id.
13 http://fta.mofcom.gov.cn/article/zhengwugk/201412/19394_1.html.
14 http://www.mofcom.gov.cn/article/b/g/201601/20160101244060.shtml.
15 Baldwin Richard 1993. “A Domino Theory of Regionalism”, NBER Working Paper No. 4465.
