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US business group sees gaps in Chinese WTO record
WASHINGTON (September 14, 2002) : China has fallen short of its commitments to open its market to more foreign goods and services in a number of areas since joining the World Trade Organisation nine months ago, a leading business group said in a report obtained by Reuters on Wednesday.
Still, in its first major assessment of China's WTO record, the US Chamber of Commerce also said Beijing deserved recognition for taking a number of "promising steps" to implement its WTO commitments and warned against jumping to conclusions based on developments so far.
"It is too early to issue sweeping judgements about China's overall compliance," the business group said, with many commitments to be met in phases over a period of years.
The chamber, which bills itself as the world's largest business federation, said the report draws on the experience of its member companies over the past nine months.
Myron Brilliant, vice president of the business group's Asian division, said US companies have been willing to give China a certain "grace period," given the enormity of the commitments it has made to allow more foreign competition.
But if companies are seeing the same problems three or four years down the road, they will be far less tolerant, he said.
"We want to give China every opportunity to succeed.
Right now, our patience is still high, but it's not infinite," Brilliant said.
The US business group briefed Chinese Embassy officials on the report on Wednesday afternoon to prepare them for its release to the general public on Thursday.
The Bush administration will hold a hearing next week on China's WTO record and is expected to issue its own report in December, near the one-year anniversary of China's WTO entry.
The Chamber of Commerce report looked at China's track record in six different areas: agriculture, distribution, information technology, intellectual property rights, transportation and services.
DELAYING TACTICS ON FARM TRADE: Some of the most detailed criticism was in the agricultural sector, where the report says China has used delaying tactics and other means to avoid opening its market to more foreign wheat, corn, cotton and soyabean oil.
It also faulted China for the continuing use of agricultural export subsidies, which it promised to ban, and for jeopardising more than $1 billion in US soyabean exports through its clumsy implementation of a new law requiring safety certificates for imports of genetically modified crops.
The report also says violations of copyright and trademark protections for intellectual property products ranging from software to pharmaceuticals remains "rampant" in China due mainly to poor enforcement of existing laws.
In the services sector, the business group cited problems with China's implementation of promises to open its insurance and commercial banking sectors to more foreign participation.
The report praised Beijing for moving with "speed and seriousness" to develop regulations to put many of its WTO commitments into effect.
But in many cases, the process has moved so swiftly that companies have not had adequate time to express their concerns, the report said.
In addition, many of the final regulations have been vague and hard to understand, the business group said.
The report also cites the need for an independent regulator to oversee China's commitment to open its courier market.
China Post, a government entity with a monopoly over the delivery of private letters, plays a key role in decisions affecting the amount of business that foreign competitors might receive, the report said.
To eliminate bureaucratic infighting, the report also called for a central government authority to oversee the implementation of all of China's WTO commitments.
Currently that responsibility rests mostly with the Ministry of Foreign Trade and Economic Co-operation (MOFTEC), but other ministries have some jurisdiction.
Courtesy Business Recorder
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