False Promises II: The Continuing Gap Between China’s WTO Commitments and Its Practices

As China nears its 20th year of World Trade Organization (WTO) membership, originally acceding to the organization on December 11, 2001, it has never been further away from faithfully committing to the foundational principles and tenets of the organization and its fundamental obligations and commitments. WTO membership comes with rights to enjoy preferential access to other nations’ markets, but also responsibilities. In particular, it commits nations to support and pursue “open, market-oriented policies” in accordance with the foundational principles of “non-discrimination, market access, reciprocity, and fairness.”

China has taken full advantage of its WTO rights. It has also largely ignored the responsibilities and commitments through its embrace of state-directed capitalism predicated upon an aggressive innovation mercantilism. This mercantilism denies foreign enterprises access to Chinese markets on reciprocal terms; distorts global markets, including for advanced-technology goods; and deprives nations of the benefits they believed they would receive when granting China accession into the community of trading nations.

In this report, China’s accession to the WTO is recounted along with the trade rules with which it fails to comply. The report also describes the economic benefits China has accrued in part by not complying with its WTO commitments. Lastly, it offers policy recommendations for policymakers from the United States and like-minded nations to address the continuing China trade challenge. Our initial 2015 Information Technology and Innovation Foundation (ITIF) report on this topic, on which this report is based, is premised on China’s false promises to the WTO. Even with a full-scale Section 301 investigation initiated by the Trump administration, China has made little progress in fulfilling a wide range of its WTO commitments over the past two decades.

Stephen Ezell is vice president, global innovation policy, at the Information Technology and Innovation Foundation (ITIF). He focuses on science and technology policy, international competitiveness, trade, manufacturing, and services issues.

To read the original report from the Information Technology & Innovation Foundation, please visit here