Petros C. Mavroidis is the Edwin B. Parker Professor of Foreign and Comparative Law at Columbia Law School. His books include The Regulation of International Trade. André Sapir is professor of economics at the Solvay Brussels School of Economics & Management at the Université libre de Bruxelles (ULB) and senior fellow at Bruegel. His books include Fragmented Power: Europe and the Global Economy.
An examination of China's participation in the World Trade Organization, the conflicts it has caused, and how WTO reforms could ease them
China's accession to the World Trade Organization (WTO) in 2001 was rightly hailed as a huge step forward in international cooperation. However, China's participation in the WTO has been anything but smooth, with China alienating some of its trading partners, particularly the United States. The mismatch between the WTO framework and China's economic model has undermined the WTO's ability to mitigate tensions arising from China's size and rapid growth. What has to change? China and the WTO demonstrates that unilateral pressure, by the United States and others, is not the answer. Instead, Petros Mavroidis and André Sapir show that if the WTO enacts judicious reforms, it could induce China's cooperation, leading to a renewed confidence in the WTO system.
The WTO and its predecessor, the General Agreement on Tariffs and Trade, are predicated on liberal domestic policies. They managed the previous accessions of socialist countries and big trading nations, but none were as large or powerful as China. Mavroidis and Sapir contend that for the WTO to function smoothly and accommodate China's unique geopolitical position, it needs to translate some of its implicit principles into explicit treaty language. To make their point, they focus on two core complaints-that Chinese state-owned enterprises (SOEs) benefit from unfair trade advantages, and that domestic companies, private as well as SOEs, impose forced technology transfer on foreign companies as a condition for accessing the Chinese market-and they lay out specific proposals for WTO reforms.
In an age of global trade disputes, China and the WTO offers a timely exploration of unprecedented challenges to the current multilateral system and fresh ideas for lasting solutions. "Timely. . . . [China and the WTO] provides an excellent account of the legal rules with a firm grounding in economic analysis."---Henry Gao, Journal of Political Science "China's model of state capitalism represents the biggest challenge facing the world trading system. In this important book, Mavroidis and Sapir give an insightful and illuminating analysis of whether China's approach can be made compatible with WTO rules and norms."-Douglas Irwin, author of Clashing over Commerce: A History of U.S. Trade Policy "This book is essential reading for President Xi and his Western counterparts-but only if they are determined to save the multilateral trading system. While accepting Communist Party control in China, Mavroidis and Sapir provide practical answers to trade frictions rooted in state-owned enterprise and forced technology transfer. Their recommendations are nested in a brilliant account of China's long engagement with the WTO."-Gary Clyde Hufbauer, Peterson Institute for International Economics "As the trade war between the United States and China shakes the global economy and world trade order, China and the WTO offers piercing analysis of the underlying legal principles at stake. The book's conclusions highlight why China's state subsidies undermine trade cooperation but also point to areas for compromise. This is a must-read, for everyone from students of law to negotiators of policy."-Christina Davis, author of Why Adjudicate? Enforcing Trade Rules in the WTO "This splendid book demonstrates how collaboration between today's leading trade lawyer and a world-class economist can illuminate an important trade policy issue. Armed with
