The WTO: Pursuing a Single Standard

The Ministry of Commerce released a report on the World Trade Organization (WTO) compliance of the United States on August 11, the first of its kind. The report reviewed U.S. adherence to WTO rules, and expressed concerns over U.S. policy measures that undermine the multilateral trading rules, impose unilateral sanctions, leverage double standards in industrial policies, and disturb global industrial and supply chains.

While some Western media understand this report as a retort to the U.S. accusations against China, it actually represents China’s efforts to exhort the United States to move in the right direction. On the same day the report was released, the Ministry of Commerce’s Department of WTO Affairs said that China would like to take this opportunity to appeal to the U.S. to correct its behaviors and strictly follow WTO rules and its own commitments.

This report came at a time when U.S. violations of WTO rules have severely undermined global economic stability and development. Several factors are responsible for sluggish economic growth in recent years, two striking ones being U.S. violations of international trade rules and its practice of deglobalization.

Since 2017, on the basis of putting “America first,” the U.S. has obstructed the selection of WTO Appellate Body members and paralyzed the appellate body. The U.S. has also arbitrarily imposed tariffs, abused trade remedy and export control measures, and implemented discriminatory subsidies, according to the report. The economic coercion and sanctions imposed by the U.S. seriously weaken the core values and basic principles of the WTO, pose severe challenges to the multilateral trading system, and undermine the common interests of WTO members. The U.S. also coerced others into abiding by its diplomatic policies and illegitimate demands, the report said.

Cases of U.S. violating WTO rules abound, according to the report. For instance, in September 2021, the U.S. Department of Commerce demanded semiconductor supply chain companies provide within 45 days information including 26 items of core data such as inventory, production capacity, delivery cycle and customer information. It threatened that if these companies failed to do so, it would turn to compulsory measures in the Defense Production Act enacted in 1950. Since 2018, on grounds it says include national security and human rights, the United States has placed a number of Chinese entities on its export control “entity list” and a number of Chinese individuals on its “specially designated nationals and blocked persons list,” seriously disrupting these Chinese entities’ foreign trade.

The international community is well aware of what this report has revealed, but U.S. pressure prevents many countries from holding it to account. In 2017, under the pretext of “national security” and in violation of WTO rules, the United States launched an investigation into steel and aluminum products from around the world based on the rarely used Section 232 of the U.S. Trade Expansion Act of 1962 and increased tariffs on these products. As a result, Canada and Mexico had to agree to the United States-Mexico-Canada Agreement, a U.S.-led trade agreement that replaced the North American Free Trade Agreement, to obtain exemption from added tariffs on steel and aluminum. The Republic of Korea (ROK) was forced to make concessions in its talks on the U.S.-ROK free trade agreement in return for exemption from added tariffs for a certain quantity of its steel products.

The WTO is a rules-based international organization. Since its accession into the WTO in 2001, China has been a staunch advocate of its multilateral trading mechanisms by fulfilling its accession promises and promoting the development of an open world economy. As the world’s biggest economy and the principal founder and beneficiary of the multilateral trading system, the United States, however, has in recent years trampled the rules and posed huge challenges to the system.

As a heavyweight member in the WTO, the U.S. should pay special attention to this report. It is hoped that this report will help urge the U.S. to fulfill its commitments, abide by the rules, and return to rules-based, open, transparent, inclusive and non-discriminatory multilateralism as soon as possible, playing its due role in safeguarding the authority, integrity and efficacy of the multilateral trading system.