U.S.-China Trade:

Summary of 2003 World Trade Organization Transitional Review Mechanism for China

GAO-05-209R: Published: Jan 25, 2005. Publicly Released: Jan 25, 2005.

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China's 2001 accession to the World Trade Organization (WTO) raised expectations with Congress and the private sector about the prospects for China to reform its markets and allow greater access to foreign goods and services. As part of our long-term body of work related to China's membership in the WTO, we reported in October 2004 on how the U.S. Trade Representative (USTR) and the Departments of Commerce, State, and Agriculture were positioned to monitor and enforce China's compliance with its WTO commitments in 2003. In that report, we examined the multilateral annual WTO review of China's progress, referred to as the Transitional Review Mechanism (TRM). We found that the TRM has ongoing limitations in its participation and its procedures. We made recommendations to improve related U.S. government activities. In a subsequent request, Congress asked us to provide detailed information about the TRM process in 2003 so that they could better gauge the level of activity and the efficacy of the United States and other WTO members' efforts to utilize it.

Eleven out of a total of 148 WTO members participated in the 2003 multilateral review of China's trade commitment implementation. These members participated in the TRM process by submitting written questions to China prior to meetings of 16 WTO subsidiary bodies with a role in the Transitional Review Mechanism (TRM), or by raising issues verbally with China during these meetings, which occurred from September to December 2003. Specifically, 7 WTO members both submitted written questions and discussed issues verbally in some TRM meetings: the United States, the European Communities, Japan, Chinese Taipei, Australia, Canada, and Mexico. Four other members--Brazil, Korea, Norway, and Pakistan--only participated verbally during some meetings. The United States was the most active member in the 2003 TRM, participating one or both ways in 14 of the 16 subsidiary bodies; the exceptions were the Committees on Balance-of-Payments Restrictions and Rules of Origin.

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