USTR Releases Annual Reports on China’s and Russia’s WTO Compliance2018-01-22

Washington, DC – China and Russia have failed to embrace the market-oriented  economic policies championed by the World Trade Organization (WTO) and are not living up to certain key commitments they made when they joined the WTO, the U.S. Trade Representative said in annual reports released today on each country’s compliance with WTO rules.

The reports, delivered to Congress, are required by law and assess China’s and Russia’s implementation of their respective WTO commitments.  China became a member of the WTO in 2001 and Russia joined the WTO in 2012.

“The United States is committed to working with all WTO Members who share our goal of using the WTO to create and enforce rules that lead to more efficient markets, reciprocal benefits and greater wealth for our citizens,” said Ambassador Robert Lighthizer.  “However, as these two reports show, the global trading system is threatened by major economies who do not intend to open their markets to trade and participate fairly.  This practice is incompatible with the market-based approach expressly envisioned by WTO members and contrary to the fundamental principles of the WTO.”

Selected highlights of the 2017 annual report on China’s WTO compliance:

• “Today, almost two decades after it pledged to support the multilateral trading system of the WTO, the Chinese government pursues a wide array of continually evolving interventionist policies and practices aimed at limiting market access for imported goods and services and foreign manufacturers and service suppliers.”
• “China’s regulatory authorities do not allow U.S. companies to make their own decisions about technology transfer and the assignment or licensing of intellectual property rights.  Instead, they continue to require or pressure foreign companies to transfer technology as a condition for securing investment or other approvals.”
• “China is determined to maintain the state’s leading role in the economy and to continue to pursue industrial policies that promote, guide and support domestic industries while simultaneously and actively seeking to impede, disadvantage and harm their foreign counterparts, even though this approach is incompatible with the market-based approach expressly envisioned by WTO members and contrary to the fundamental principles running throughout the many WTO agreements.”
• “Many of the policy tools being used by the Chinese government…are largely unprecedented, as other WTO members do not use them, and include a wide array of state intervention and support designed to promote the development of Chinese industry in large part by restricting, taking advantage of, discriminating against or otherwise creating disadvantages for foreign enterprises and their technologies, products and services.”

 Selected highlights of the 2017 annual report on Russia’s WTO compliance:

• “So far, Russia’s actions strongly indicate that it has no intention of complying with many of the promises it made to the United States and other WTO Members.  This trend is very troubling.”
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  “Russia has done little in 2017 to demonstrate a commitment to the principles of the WTO or to many of the specific commitments that it made” in the negotiations leading to Russia’s membership in the WTO.”
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  “The agricultural sector continues to be one of the most challenging sectors for U.S. exporters.  In addition to the import ban on nearly all agricultural goods from the United States and other WTO Members, Russia continues to erect barriers to U.S. agricultural exports.”
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  “In 2017, notwithstanding a few tariff reductions, Russia increasingly appeared to turn away from the principles of the WTO, instead turning inward through the adoption of local content policies and practices.  Russia continued to rely on arbitrary behind-the-border measures and other discriminatory practices to exclude U.S. exports.”

The complete report on China’s WTO compliance can be found here.

The complete report on Russia’s WTO compliance can be found here.