January 2000 PulseOnline: Headline News: Landmark China WTO Package Reached (Page 5 of 6)

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Protocol Provisions
Commitments in China's WTO Protocol and Working Party Report establish rights and obligations enforceable through WTO dispute-settlement procedures. The United States has agreed on key provisions relating to antidumping and subsidies, protection against import surges, technology transfer requirements and offsets, as well as practices of state-owned and state-invested enterprises. These rules are of special importance to U.S. workers and business.

Trade Related Investment Measures - China had agreed to implement the TRIMs Agreement upon accession; eliminate and cease enforcing trade and foreign exchange balancing requirements; eliminate and cease enforcing local content requirements, and refuse to enforce contracts imposing these requirements; and only impose or enforce laws or other provisions relating to the transfer of technology or other know-how if they are in accordance with the WTO agreements on protection of intellectual property rights and trade-related investment measures.

These provisions will also help protect U.S. companies against forced technology transfers, as China has also agreed that, upon accession, it will not condition investment approvals, import licenses or any other import approval process on performance requirements of any kind, including local-content requirements, offsets, transfer of technology, or requirements to conduct research and development in China.
Antidumping and Subsidies Methodology - The agreed protocol provisions ensure that U.S. companies and workers will have strong protection against unfair trade practices, including dumping and subsidies. The United States and China have agreed that the United States will be able to maintain its current antidumping methodology (treating China as a non-market economy) in future antidumping cases. Moreover, when the United States applies its countervailing duty law to China, the United States will be able to take the special characteristics of China's economy into account during the identification and measurement of a subsidy benefit that may exist. This provision will remain in force for 15 years after China's accession to the WTO.
Product-Specific Safeguard - The agreed provisions for the protocol package also ensure that U.S. companies will have strong protection against rapid increases of imports.

To do this, the product-specific safeguard provision sets up a special mechanism to address increased imports that cause or threaten to cause market disruption to a U.S. industry. China is a major exporting country that enjoys open access to U.S. markets. This mechanism, which is in addition to other WTO safeguard provisions, differs from traditional safeguards in that it permits China to address imports that are a significant cause of material injury through measures such as voluntary restraints.

Moreover, the United States will be able to apply restraints unilaterally based on standards that are lower than those in the WTO Safeguards Agreement. This provision will remain in force for 12 years after China accedes to the WTO.

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