The Foreign Service Journal, January 2003

the intellectual property portion of the WTO agree- ment. But the U.S. side noted serious shortcomings, such as high financial and evidentiary thresholds for criminal prosecution of IPR violations and low admin- istrative fines that generally did not deter violators. It also pointed out the omission of well-known foreign trademarks from China’s list, stressed the need to pro- tect pharmaceutical clinical test data during the patent application period, and cited the stringent limits on market access for legitimate audio-visual products. More generally, the U.S. expressed concerns about rampant IPR piracy due to weak and uncoordinated enforcement, the lack of institutional IPR expertise and local protectionism. Looking Ahead However mixed China’s record of WTO implementa- tion has been, the commitment of senior leaders to meet China’s WTO obligations is unmistakable. This is evident in the massive effort put into overhauling China’s entire trade-related legal and administrative systems. Apart from enacting and revising several thousand laws and regulations to comply with its WTO commitments, China has established new structures within its various trade-related ministries and agencies to focus specifically on WTO implementation. At the State Council level, a senior leader now heads an informal group that directs interagency coordination on WTO affairs. China also created a new WTO Affairs Department following its accession, and has sent a top trade official to head its WTO Office in Geneva. The PRC also created a new Import and Export Fair Trade Department that, along with the new Bureau for the Investigation of Industry Injury, that addresses trade remedy issues. To comply with WTO, China has also merged its agencies dealing with sani- tary and phytosanitary and technical standards to cre- ate the Administration for Quality Supervision and Inspection and Quarantine. Beyond this, China’s senior leaders have under- scored the government’s commitment to WTO nation- wide by mobilizing the country’s provinces and munic- ipalities in this effort. Shortly after the country’s acces- sion, Vice President Hu Jintao (who replaced President Jiang Zemin as China’s top party leader in November) convened a weeklong seminar in Beijing for senior provincial and municipality leaders on China’s WTO commitments and implementation issues. President Jiang and Premier Zhu Rongji (and virtually all senior officials) participated in this semi- nar. The National People’s Congress has also directed the General Office of its Standing Committee to ensure that provincial and local legislation conforms to national laws and China’s WTO commitments. Beijing, Shanghai and other major cities and all of the provinces have set up WTO centers to study and train regional and local officials in support of China’s imple- mentation efforts. An embassy-funded WTO distance learning course has become part of a curriculum for all officials engaged in WTO work at the national as well as local levels. Official government media publicize WTO issues and China’s commitment to implementa- tion on a daily basis across the country. Chinese leaders have undertaken this tremendous effort because they believe that China’s WTO acces- sion and the implementation of the resulting commit- ments is key to furthering the country’s economic reforms. In turn, they believe that continued eco- nomic reform is key to China’s top priority goal of eco- nomic growth and development over the long term. To be sure, as noted above, there have been serious problems of implementation, but persistent U.S. inter- vention with senior Chinese government officials has been successful in resolving many of these issues. Hence, while our trade deficit with China is not likely to disappear in the short term, I expect U.S. exports to continue growing rapidly, especially in the services sectors where we have already begun building up a sizeable trade surplus. U.S. investments will also con- tinue to spur growth in our service-sector exports. The impact of WTO accession on Chinese society at large will also be significant and long-lasting. The core principles of transparency, non-discrimination and national treatment are not likely to be confined to the area of foreign trade and investment. Already, China’s expanding small and medium-size private enterprises are demanding to be treated no less well than their state-owned competitors. Private citizens are demanding more transparency in government regula- tions and more say in policies that affect their lives. China’s transition to a society based on the rule of law will not be easy or instant, but the foundation has been laid. F O C U S 60 F O R E I G N S E R V I C E J O U R N A L / J A N U A R Y 2 0 0 3