Trade Remedies and FTA China ’ s Perspective By Cheng, Yongru Fair Trade Bureau, Ministry of Commerce The People’s Republic of China

Currently Situation of RTAs The vast majority of WTO members are party to one or more regional trade agreements. The surge in RTAs has continued unabated since the early 1990s. Some 250 RTAs have been notified to the GATT/WTO up to December 2002, of which 130 were notified after January Over 170 RTAs are currently in force; an additional 70 are estimated to be operational although not yet notified. By the end of 2005, if RTAs reportedly planned or already under negotiation are concluded, the total number of RTAs in force might well approach

China and FTA ＊ ＊ China and ASEAN Comprehensive Economic Cooperation Framework Agreement Agreement of Trade on Goods√ Agreement on Dispute Settlement Mechanism ＊ ＊ China and Chile Free Trade Agreement√

China and FTA (Cont ’ d) △ China and Pakistan Agreement of Early Harvest △ China and New Zealand △ China and Australia △ China and GCC △ China and SACU △ China and other countries

China and CEPA ▲ Mainland China -Hong Kong, China ▲ Mainland China-Macao, China ▲ Mainland China-Chinese Taipei

Global Safeguards: China China-ASEAN (Art 9.1) Art XIX of GATT1994 WTO Agreement on Safeguards (SG) China-Chile (Art 51) Art XIX of GATT1994 WTO Agreement on Safeguards (SG)

Global Safeguards: Int ’ l Comparison WTO Jurisprudence ☆ GATT1994 Art XIX vs Art XXIV ☆ Parallelism, sufficient reasonable explanation, non-attribution ﹡ Argentina-Footwear (EC)-DS121 ﹡ US-wheat Gluten (EC)-DS166 ﹡ US Circular Welded Carbon Quality Line Pipe (Korea)-DS202 ﹡ US Certain Steel Products(EC, etc.)-DS248, etc. ☆ SG Art 2.1,2.2,4,2 Australia-US Art XIX of GATT1994, SG; may exclude if not substantial cause of serious injury or threat thereof Australia-Thailand Art XIX of GATT1994, SG, any other relevant provision of the WTO agreement; may exclude if not a cause of serious injury or threat thereof or of serious damage or actual threat or any other factor in the above provisions

Global Safeguards: Int ’ l Comparison (Cont ’ d) New Zealand-Thailand Art XIX of GATT1994, SG, any other relevant provisions in the WTO agreement; may exclude if not a cause of serious injury or threat thereof NAFTA Art XIX of GATT1994 and any other safeguards agreement; shall exclude from each other party unless (a) not a substantial share of total imports individually (b) contribute importantly to the serious injury or threat thereof by the imports from a party individually or in exceptional circumstances imports from parties collectively US-Chile Art XIX of GATT1994, SG

Bilateral/Transitional Safeguards: China China-ASEAN Art Art 9.2 Transition period of 5 years Art 9.3 Unforeseen development, the effects of the obligations incurred, absolute or relative increase, serious injury or threat thereof Art years + 1 year Art 9.11 No simultaneous recourse to global safeguard China-Chile Art Art 44 As a result of the reduction or elimination of duties,transitional period, absolute or relative increase, substantial cause of serious injury or threat thereof

Bilateral/Transitional Safeguards: Int ’ l Comparison NAFTA ☆ US-Mexico/Canada-Mexico: as a result of the reduction of a duty provided in the NAFTA, in such increase qualities in absolute terms, alone, substantial cause of serious injury or threat thereof ☆ US-Canada: as a result of the reduction of a duty provided in the NAFTA, in absolute terms as to alone constitute a substantial cause of serious injury Australia-US As a result of the reduction or elimination of a customs duty, in absolute or relative terms, substantial cause of serious injury or threat thereof Australia-Thailand As a result of the reduction or elimination of a customs duty, in absolute or relative terms, cause serious damage or actual threat thereof

Bilateral/Transitional Safeguards: Int ’ l Comparison (Cont ’ d) Australia-New Zealand ☆ As a last resort when no other solution can be found ☆ In such increased quantities as to cause, or to pose an imminent and demonstrated treat to cause, severe material damage New Zealand-Thailand ☆ In such increased quantities in absolute or relative terms as to cause or threaten to cause serious injury US-Chile ☆ T ransitional period, absolute and relative increase, substantial cause of serious injury or threat thereof

Bilateral/Transitional Safeguards: Int ’ l Comparison (Cont ’ d) EU-Mexico ☆ In such increased quantities and under such conditions as to cause or threaten to cause (a) serious injury (b) serious disturbances in any sector or difficulties which could bring about serious deterioration in the economic situation of a region EU-Chile ☆ Mixed with global safeguards ☆ Substantial interest when among the the five largest suppliers of the imported product during the most recent three years in absolute volume or value ☆ Remedy serious injury

Rules of Origin: China Regulation on rules of origin for the import and export goods ☆ Fully obtained or partially obtained ☆ Substantial transformation: (a) changes in the 4-digit tariff classification of the Harmonized System (b)value-added percentage no less than 30% ☆ From Jan.2005, Substantial transformation assessment mainly on the changes in the 4-digit tariff classification of the Harmonized System FTA China-ASEAN ☆ Minimum value requirement from originating China-ASEAN members accumulated is 40% or total value of originating non-China-ASEAN members not exceed 60% of obtained or the FOB priced goods and the last processing operation is finished within the territory of the members ☆ Specific products: under negotiation

Rules of Origin: China (Cont ’ d) CEPA: Mainland China and Hong Kong,China Mainland China and Macao,China ☆ Substantial Transformation standards: (a)Manufacturing or processing (b) changes in the 4-digit tariff classification of the Harmonized System (c)Value-added percentage: 30% and the last processing operation (d)others agreed upon (e) mixed Bangkok Agreement ☆ Total value of originating non-members not exceed 50% of obtained or the FOB priced goods and the last processing operation is finished within the territory of the members

Conclusion GATT1994 Art XXIV. ☆ The purpose of a customs union or of a free-trade area should be to facilitate trade between the constituent territories and not to raise barriers to the trade of other contracting parties with such territories. Doha Mandate 2001 Para. 29 ☆ Clarifying and improving disciplines and procedures under the existing WTO provisions applying to regional trade agreements. Effective, consistent and predictable rules of origin, stable and predictable environment for companies

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