CHINA & WTO.   Term Paper ID:28831 Click to get this paper

Essay Subject: Attempts by China to join World Trade Organization. GATT. Globalization efforts. Changes made by government. Problems.... More...

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Paper Abstract: Attempts by China to join World Trade Organization. GATT. Globalization efforts. Changes made by government. Problems. Paper Introduction: The fall of Communism in most of the world has had little effect on the government of the People's Republic of China, a nation which has resisted any move toward democracy or any other significant change after the demonstrations in Tiananmen Square ended in the violent suppression of dissent. Yet China has to change in terms of its degree of modernization in order to compete in the world markets, and the nurturing of trade ties with the United States and others in the West is one aspect of trying to modernize the industrial and manufacturing sectors of China. The leadership may also hope to do this without raising any serious challenge to the political and social structures they have built, but it is not clear that this can be accomplished. Indeed, U.S. trade policy has been based on the belief that increased trade will have a salutary effect on the Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. This is because a fundamental tenet of the WTO is that all membersmust grant MFN to all other members. This is due both to the larger number of member countries in GATT and the fact that the two most powerful U.S. . But once it is recognized that trade has implications for domestic norms and social arrangements and that its legitimacy rests in part on its compatibility with these, such notions are not so outlandish . In the United States, the argument over China entering the WTOparallels and is similar to the argument over continuing to give China mustfavored nations status. Park. Some want to keep China out because of humanrights abuses and other concerns, and some see the entry of China into theworld trade arena as the best opportunity to change the politicalstructure. The New China Syndrome." Business Week (7 June 1999), 3 .O'Neill, Robert. trade policy has been based onthe belief that increased trade will have a salutary effect on the Chineseleadership and produce democratic reforms over time. "Dismantling the Great Wall." National Journal (25 Mar 2 ).Mastel, Greg. Yet China has to change in terms of its degree of modernizationin order to compete in the world markets, and the nurturing of trade tieswith the United States and others in the West is one aspect of trying tomodernize the industrial and manufacturing sectors of China. Works CitedCrock, Stan. Smooth functioning of these markets set the stage for system reform initiated in January 1994 . China has also been motivated to make other changes: Partly as a result of its attempts to join the WTO, China's stated goal with respect to the foreign exchange system has been to move towards a convertible currency. Foreign exchange management was reorganized so that the State Administration of Foreign Exchange, the China Foreign Exchange Trade Network (located in Shanghai), and fourteen banks were designated to deal in foreign exchange (Prime and Park 29-31). The WTO was created during the negotiations over NAFTA: While NAFTA only involves three nations, the Uruguay Round involves most of the countries in the world and affects more than four-fifths of world trade. There is resistance to allowing China entry to the WTObecause that would end the annual MFN debate, which some see as a politicalplus. . These issues develop because ofdifferences perceived between the economic structure and reality of onecountry as opposed to others, or one region of the world as opposed toothers, or one industry as opposed to others: Conflicts arise both when these differences create trade--as in the cases of child labor or lax environmental policies--and when they reduce it--as industrial practices in Japan are alleged to do (Rodrik 27).Such concerns cannot be dismissed easily: The notions of "fair trade" and "leveling the playing field" that lie behind the pressures for putting these new issues on the trade agenda have been ridiculed by economists. Theleadership may also hope to do this without raising any serious challengeto the political and social structures they have built, but it is not clearthat this can be accomplished. It wouldincrease trade with the rest of the world and so might improve thepolitical structure of China in time as well. "Trading Away the Future." Environmental Action Magazine (Winter 1995), 31-35. . "Sense and Nonsense in the Globalization Debate." Foreign Policy 1 7 (Summer 1967), 19-37.Weissman, Robert. trading powers, Japan and the European Union, will be members of the WTO (Weissman 31- 32).WTO has gained power with the globalization effort, leading to the sort ofsocial tensions seen in Seattle, where many issues of concern to those whofear globalization were raised. Trading corporations could trade their retained foreign exchange for local currency supplied by foreign invested companies who needed foreign currency. Indeed, U.S. The WTO is a major new international organization with significant powers, and will maintain a legal personality like the United Nations or the World Bank. The Uruguay Round creates a standing organization, known as the World Trade Organization (WTO), to administer global trade rules and provide a structure for developing new rules. It is possible for an existing WTOmember to deny a new member MFN by declaring its intention to do so whenthe new member joins. The fall of Communism in most of the world has had little effect onthe government of the People's Republic of China, a nation which hasresisted any move toward democracy or any other significant change afterthe demonstrations in Tiananmen Square ended in the violent suppression ofdissent. The modernizationeffort is being carried forth not only by those within China or by hertrading partners but also by Chinese living abroad and finding ways toincrease business for the home country or to develop China in a widevariety of fields, including the scientific, financial, artistic, tourism,and so on. From China's point of view, the long-term trade policy has been setand includes export promotion and import liberalization. It is believed by manythat if China were admitted to the WTO, trade with the U.S. In 1994, China's first foreign tradelaw came into effect, which had the effect of encouraging increasedtransparency, which has also been part of China's attempts to meet therequirements for WTO. Membership in the WTO would be to China's economic benefit. Free trade among countries with different domestic practices requires an acceptance of either an erosion of domestic structures or the need for some degree of harmonization or convergence (Rodrik 28). Beginning in the mid 198 s, companies used foreign exchange "swap markets" to exchange renminbi and hard currencies. . In April 1996, tariffs were cut on 5, items, bringingthe average rate down to 23 percent. "Last Call for the China MFN Debate." IntellectualCapital.Com (1 Sept 1998).Prime, Penelope B., and John H. These Chinese are accomplishing their tasks in a number ofdifferent ways as they try to alter the course of their homeland andimprove the lives of their people. exporters because China doubtlessly would respond in kind and deny theUnited States the trade benefits it grants to other WTO members (Mastel). "China's Foreign Trade and Investment Strategies: Implications for the Business Environment." Business Economics (1 Oct 1997), 29-35.Rodrik, Dani. Part of the effort is an attempt byChina to join the World Trade Organization (WTO), and both the possibilityof China joining and the organization itself have been the subjects ofmassive protests, such as those in Seattle last fall and more recently inWashington, D.C. In addition,there has been a desire on the part of some of China's leaders to regainmembership in GATT and the WTO, and this has created pressure toliberalize, especially with respect to imports, which is what much of theworld wants. would increaseexplosively; still, trade talks have been stalled by such events as theChinese campaign contribution scandal and concerns over possible Chinesespying (Crock 3 ). The White House and its pro-trade allies argue that Congressshould remove China from the trade blacklist "because, under WTO rules, theUnited States must grant China the same trade status as all other WTOmembers or risk being shut out itself from the trade concessions Beijinghas offered in order to gain membership" (O'Neill). And although the United States may be the most powerful player in the World Trade Organization, it will have a far less dominant role than it does in overseeing NAFTA. Therefore, unless the United States agrees to extendpermanent MFN to China upon membership, it would be forced to take such anexception, a step which would be to have considerable negative impact onU.S. At the end of 1995, for example, President Jiang Zeminannounced a trade liberalization plan to decrease tariffs on 4, importsand to end import controls on 17 tariff categories, an announcement thatcame one day after meetings with the United States concerning China'sGATT/WTO status. 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