Brief Summary
This video discusses China's recent decision to forgo "special and differential treatment" as a developing nation within the World Trade Organization (WTO). It explores the reasons behind this move, the reactions from the United States, and the broader implications for global trade and the balance of power between developed and developing countries. The video argues that China's decision, while seemingly a disadvantage, is a strategic move to strengthen the multilateral trading system, promote unity among developing nations, and position itself as a leader in global economic governance.
- China's decision to forgo special treatment in the WTO is a strategic move to strengthen the multilateral trading system.
- The United States' attempts to undermine the WTO and isolate China have backfired, with China emerging as a leader among developing countries.
- China's approach to global economic governance emphasizes inclusive development, mutual benefit, and win-win outcomes, contrasting with the US-led "Economic NATO."
Introduction
The video introduces China's recent announcement that it will no longer seek "special and differential treatment" within the WTO, a move that has surprised the world. This decision is likened to giving up a lifetime VIP card, as it means China will forgo the benefits and flexibilities granted to developing countries in trade negotiations. The video questions the rationale behind this decision and its potential impact on global trade dynamics.
The Value of Special and Differential Treatment
Following World War II, countries established the General Agreement on Tariffs and Trade (GATT), the WTO's predecessor, to lower trade barriers and promote free trade. However, the initial rules favored developed countries, prompting developing nations to demand fairer treatment. In 1965, "special and differential treatment" was introduced, allowing developing countries to impose lower tariffs on goods from developed countries, protect local industries with high tariffs, and receive financial support from institutions like the World Bank. This treatment served as a "novice protection period" for developing countries.
China's Rise and the End of "Novice Protection"
China joined the WTO in 2001 with a GDP of $1.34 trillion, benefiting from the "special treatment" and experiencing rapid economic growth. By 2010, China's GDP surpassed Japan's, becoming the world's second-largest economy. However, developed countries, particularly the United States, began questioning China's continued claim to developing country status, arguing that it was no longer justified. Many developed countries have already canceled "most-favored-nation treatment" for China, citing its economic advancement. The trade war with the United States further reduced China's access to preferential treatment, making the "novice protection" largely symbolic.
US Efforts to Undermine the WTO
The United States, initially aiming to integrate China into its sphere of influence through the WTO, later realized that China was using the organization's rules to its advantage. Consequently, the US began undermining the WTO, particularly by obstructing the appointment of judges to the WTO Appellate Body, effectively paralyzing its "Supreme Court." The US also imposed anti-dumping measures on Chinese steel and blocked the re-election of judges perceived as lenient towards China. These actions weakened the WTO's binding force, allowing the US to pursue unilateral actions.
China's Strategic Response
In response to the US's actions, China decided to voluntarily forgo special treatment while still maintaining its identity as the largest developing country. This move is intended to safeguard the multilateral framework of the WTO and express solidarity with other developing nations. China aims to counter the US strategy of dividing developing countries and weakening China's position as a representative of the Global South.
China's Commitment to Developing Countries
China demonstrates its commitment to developing countries through various initiatives. It has established diplomatic relations with all least developed countries, offering 100% zero tariffs on all tariff items. Imports from Africa's least developed countries have significantly increased, including coffee and cocoa beans. China's "Belt and Road Initiative" injects development momentum into developing countries, with projects like the China-Laos Railway and investments in infrastructure such as cement production lines in Ethiopia and port development in Peru. China also promotes technology sharing, opposing monopolies and collaborating with countries like Brazil and Pakistan in aerospace technology.
China's Approach to Global Economic Governance
The video contrasts two emerging systems of global economic governance: the US-led "Economic NATO," focused on supply chain security and technological monopoly, and the "United Nations" system supported by China, emphasizing inclusive development and mutual benefit. China's approach involves helping developing countries build infrastructure and develop their economies, increasing their purchasing power and creating markets for Chinese goods. This contrasts with traditional aid from developed countries, which often involves transferring polluting industries and exploiting resources.
Conclusion
China's decision to forgo special treatment is portrayed as a strategic move to uphold the multilateral trading system and assume a leadership role among developing countries. By sacrificing short-term benefits, China aims to gain the moral high ground and promote a more inclusive and equitable global economic order. This transition reflects China's evolution from a "novice" needing protection to a global leader shaping the future of international trade.
