Japan has joined the US in a complaint to the World Trade
Organization (WTO), a move condemned by Chinese experts. A Japanese
official insists the country is only acting as a third-party
nation, but China's WTO specialists have denounced the action.
On February 2, the Bush administration lodged a complaint with
the WTO in Geneva, alleging that China subsidizes export companies
and harms US manufacturers in a wide range of industries. Two weeks
later, the Japanese government notified China and the WTO of its
intention to join the trade consultations.
"Technically speaking, Japan is not participating as a direct
party, but as a third party," said a Japanese official, who asked
to remain anonymous.
Insiders, however, see the matter in a different light. "The
fact is (Japan) is following the US in adding pressure on China,
yet with other things in mind -- pushing China to compromise on
some issues," said Zhou Shijian, a senior WTO expert from the China
Society for WTO Studies.
The issues, according to Zhou, include pressure to open up some
business sectors, particularly financial services, wider and more
quickly. He also noted that the appreciation of the renminbi has
been a hot topic worldwide.
The Japanese official is of the opinion that regulation is the
main focus. "Whether measures are illegal or not has not come out,"
he said. "We consider it more important that China meets its
commitments to WTO agreements on subsidies."
Zhou said such an idea is "absolutely foolish."
"China has been following international standards in export
subsidy policies," he explained. "If there are nations doing
something beyond the WTO framework, China is not one of them."
In addition to export subsidies, the two nations are also
unhappy with China's preferential tax policies for attracting
foreign direct investment, which are expected to be adjusted in
early 2008.
The Ministry of Commerce is now reviewing the case, and has 60
days to reply. The Japanese official said Japan is waiting for the
outcome and will meanwhile continue bilateral talks.
Related reading:
Fifth Anniversary of WTO Entry
WTO China Updates
(China Daily February 27, 2007)
