China Building a Free Trade Network

China Building a Free Trade Network

China Building a Free Trade Network

Amid a revival of unilateralism and protectionism across the globe, experts hail efforts to safeguard multilateralism and build an open world economy.

China and the European Union (EU) on Monday agreed to jointly work to safeguard the rules-based international order, promote multilateralism and support free trade.

The agreement was reached during the 20th China-EU leaders’ meeting.

Both sides agreed that faced with the current complicated international situation, especially the rise of unilateralism and protectionism, China and the EU, as two major economies of the world, have the joint responsibility to safeguard the rules-based international order, advocate multilateralism, and support free trade so as to promote world peace, stability and development.

The two sides are firmly committed to fostering an open world economy, promoting trade and investment liberalization and facilitation, and resisting protectionism and unilateralism.

“The joint statement is a confirmation of the EU-China’s good relations,” Fabio Massimo Parenti, associate professor of international studies at the Institute Lorenzo de’ Medici, Florence.

“It represents clearly a will to deepening the work of many key dialogues and cooperative platforms between the two sides,” Parenti said.

The professor said that one of the significant points that emerge from the meeting is the consensus between the two sides on the centrality of UN’s actions, resolutions and basic principles.

In an interview with Xinhua, Arancha Gonzalez, executive director of the Inter Trade Center (ITC) said unilateral trade measures are not useful for global economies because today they are more interdependent and overlapping that at any time in history.

The current system necessitates global cooperative and multilateral solutions, she said.

Echoing that view, WTO Communications Director Keith Rockwell said “the multilateral trading system was created specifically for moments like this.”

Rockwell told Xinhua that “the best way to ensure that anxieties about globalization do not spiral out of control and into trade conflict is to address the real problem which is to help people find meaningful work.”

The answer to this problem is preparing young people for jobs through better education and training programs, Rockwell said. “We need to do a better job of helping people get back on their feet and back into work.”

China on Tuesday refuted U.S. accusations that it has violated WTO rules, saying it would continue to abide by them, and calling on the United States to respect and obey WTO rules.

“China has always fulfilled its obligations, kept its promises and made significant contributions to the world economy by paying great efforts and costs since it joined the WTO 17 years ago,” Foreign Ministry spokesperson Hua Chunying told a routine press briefing.

Recently, the United States has issued multiple reports accusing China of violating WTO rules, and used these to justify implementing unilateral trade measures against China.

Hua said that since 2002, China’s annual average contribution to world economic growth had been close to 30 percent.

“If China hadn’t abided by WTO rules, why would it have chosen to join the WTO?” she said.

The Chinese government decided to join the organization because it firmly believes integration into economic globalization is in line with the historical trend and that promoting free, open trade leads to mutually beneficial and win-win results, according to the spokesperson.

“If China hadn’t abided by WTO rules, why would it have fulfilled the obligations of joining the organization?” she asked.

Hua pointed out that China had recently released a white paper, “China and the World Trade Organization.”

“Speaking with facts and figures, the paper clearly shows that China has fully fulfilled its commitments in terms of tax reductions on goods, opening of trade in services, and non-tariff measures including import quotas,” she said.

“If China hadn’t abided by WTO rules, why would it have always safeguarded the core values and basic principles of the WTO?” she continued.

China firmly believes that the authority and effectiveness of the multilateral trading system can be protected only by adhering to the international rules in the spirit of contract, Hua said.

“China will never take unilateral measures easily or violate WTO fundamental rules. When handling key issues, it keeps its word and takes responsibility,” the spokesperson said.

China’s efforts in abiding by the WTO rules and fulfilling its commitments have gained worldwide recognition.

According to Hua, the United States has consecutively released 16 reports on China’s fulfillment of its commitments to the WTO, none of which have suggested any violation of rules except for one released this year.

“The United States not only puts its own interests above global interests, but also places its domestic rules on top of international rules,” she said. “None of the countries within the WTO support the United States’ unilateral actions.”

“China will continue to abide by WTO rules. We hope the United States respects and obeys WTO rules with practical actions, and safeguards the multilateral trading system with the WTO as its core,” Hua said.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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