Accelerating WTO Accession: A Historic Opportunity for China and the United States

Strategic Insights -

Chinese Premier Zhu Rongji's visit to the United States is intensifying debate over China's accession to the World Trade Organization (WTO). U.S. Trade Representative Charlene Barshefsky has sounded optimistic about the long-term prospects for Chinese accession, citing the benefits for U.S. business and the need for the two governments to seize this historic opportunity. With China being the United States' fourth-largest trading partner and one of the world's fastest growing economies, the benefits for U.S. business are substantial. However, time is running out, as the U.S. presidential campaign season approaches and a rewrite of WTO rules scheduled for later this year could complicate new applications.

Key Takeaways:

  • Chinese accession to the WTO would bring significant benefits for U.S. business, including market access within reasonable time limits and protection of the U.S. market through adherence to international WTO norms.
  • The U.S. and China should work to conclude a solid WTO deal by the conclusion of Zhu's visit on April 14, with Chinese concessions necessary to secure a deal.
  • A WTO accession means genuine access to China's rapidly growing markets, including tariff rates averaging 8 percent, elimination of all non-tariff barriers, and direct access to Chinese customers.
  • The playing field can finally begin to level with WTO accession, leading to more jobs for Americans and a better deal for U.S. companies and workers.
  • American trade with China has risen sharply since diplomatic relations were established, and similar gains can be expected as China participates in the WTO.
  • A WTO accession would enhance China's economic interaction with other nations, leading to a more predictable business environment both globally and within China.

Statistics:

  • China is the United States' fourth-largest trading partner (Source: [United States Trade Representative]).
  • Average tariff rates for China are currently 25 percent, down from an average of 45 percent in some years past (Source: [United States Trade Representative]).
  • Non-tariff barriers, including quantitative restrictions and licensing requirements, would be eliminated with China's accession to the WTO (Source: [World Trade Organization]).
  • China's accession to the WTO would also mean the right to run their own distribution systems and access to professional services run by foreign firms (Source: [World Trade Organization]).

Sources:

  • U.S. Trade Representative Charlene Barshefsky
  • Chinese Premier Zhu Rongji
  • World Trade Organization (WTO)
  • United States Trade Representative