Second, it argues that for those prac- tices that are protectionist or otherwise problematic, international trade rules should be utilized to steer China in a market-oriented direction. Despite any skepticism about China’s willingness to play by the rules, re- viewing the cases brought against China makes clear that China’s track record in WTO compliance is actually quite good.


This report by an EU organization claims that China's track record in WTO compliance is quite good.

The overall picture of China’s response to WTO complaints looks very much like the situation of other governments that face such challenges: China has made efforts to com- ply, although some issues are still contested. The actual extent of Chinese compliance with WTO judgments has been questioned; in some instances it has been seen by some as 7 only “paper compliance.”10 But there are no cases where China has simply ignored rulings against it, as has happened with some other governments. For example, the United States has not complied with the WTO ruling in the cotton subsidies complaint brought by Brazil, and the European Union (EU) still does not allow hormone-treated beef to be sold there even after losing a complaint brought by Cana- da and the United States.

It mentions that sometimes China only complies through paper compliance, but the report doesn't specify what these paper compliance are. Is there a way to determine if a country does comply within the WTO framework and compare that country to other countries?


1 Answer 1


but the report doesn't specify what these paper compliance are.

Actually it does talk a bit about it. For example

The U.S. International Trade Administration has estimated that U.S. IP-intensive industries doing business in China have lost about $48 billion in sales, royalties, and license fees to various forms of encroachment on their intellectual property rights. These U.S. firms have spent $4.8 billion to address possible Chinese IP infringements. An improvement in intellectual property protection and enforcement in China to levels comparable to those in the United States would likely translate into 923,000 new jobs in the United States.15 And these most recent numbers are from 2011—before the recent intensification of China’s mercantilist industrial strategy.

After 17 years in the WTO, China still falls far short of fulfilling its WTO obligations to protect copyrights, trademarks, patents, and other intellectual property rights. Millions of Chinese live on the illegal gains of widespread counterfeiting of U.S. and other foreign products. The Chinese, for example, are “addicted to bootleg software.” According to the Business Software Alliance, about 70 percent of the software used in China, valued at nearly $8.7 billion, is pirated. The annual cost to the U.S. economy worldwide from pirated software, counterfeit goods, and the theft of trade secrets “could be as high as $600 billion.” China “remains the world’s principal IP infringer,” accounting, for example, for 87 percent of the counterfeit goods seized upon entry into the United States.

So yes, China has good record on formal disputes at the WTO, but that's not the whole story.

The question behind the question is why is there are no WTO complaints along those lines. That paper, which has as first author one of the former US Appellate judges at the WTO is somewhat unclear on that. It does argue that the US could file such complaints, but also mentions that historically there have been zero complaints at the WTO like that and that it may difficult to distinguish/prove deliberate government actions in that regard:

One reason why some question the suitability of WTO dispute settlement for resolving trade disputes with China is the lack of transparency in Chinese governance. A recurring refrain from the United States is the difficulty of discerning what the Chinese government is doing, either directly or indirectly. When has the Chinese government taken an action what in trade law is called a “measure”—that falls within the scope of the jurisdiction of the WTO treaty and thus of WTO dispute settlement? All too often it is difficult to tell, and all too often the Chinese government makes it more difficult with the opacity of its administrative regime. [...]

Most WTO rules are “don’ts” imposing negative obligations. Don’t discriminate. Don’t apply tariffs higher than you promised. In contrast, the WTO rules on intellectual property rights are “do’s” imposing affirmative obligations. Do respect intellectual property rights. Do enforce them. Yet this affirmative aspect of WTO intellectual property rules has been largely unexplored in WTO dispute settlement. In particular, and despite widespread intellectual property violations in many other parts of the world in addition to China, no WTO Member has yet to challenge another Member with a systemic failure to enforce intellectual property rights.

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