John S. & Marilyn Long US-China Institute for Business and Law
China’s Ascent in Global Trade Governance:
From Rule Taker to Rule Shaker, and Maybe Rule Maker?
By: Professor Henry Gao
Faculty of Law, Singapore Management University
One of the most intriguing questions raised by China’s accession to the World Trade Organization (WTO) is how the “new kid on the block” would behave as a formal member of the multilateral trading system. Some people believed that China could weaken both the WTO dispute settlement system and the decision-making process, while others argued that, judging from China’s relatively uneventful track-record in the UN and other international organizations, its entry would not be so disruptive to the status quo.
In this lecture, I will answer the question by reviewing China’s first decade of WTO membership. I will analyze China’s participation in two key activities of the WTO, i.e., trade negotiations and dispute settlement, as well as another important component of global trade governance: free trade agreements (FTA). I will argue that, overall, China has evolved from a passive “taker” of the existing rules to one that tries to “shake” the rules for its own interests or even “make” new rules. At the same time, the pace of China’s ascent has been uneven in the three areas. The most aggressive strategy is taken in FTA negotiations, where China has been on a frantic shopping spree since its WTO accession. Similarly, while China was initially reluctant to use the multilateral dispute settlement system, it has become an active litigant since 2007. In terms of multilateral trade negotiations, China’s signals are mixed: while it has made many submissions in the Doha Round, China has not taken up leadership responsibility in the trade talks. After exploring the reasons for the varied behavioral patterns in different areas, I will conclude with some thoughts on China’s future role in global trade governance, as well as its potential ramifications for the rest of the world, especially the US.