U.S.-China Trade:

Observations on Ensuring China's Compliance with World Trade Organization Commitments

GAO-05-295T: Published: Feb 4, 2005. Publicly Released: Feb 4, 2005.

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U.S. government efforts to ensure China's compliance with its World Trade Organization (WTO) commitments require a sustained and multifaceted approach. To provide Congress with an update on these issues, GAO (1) discussed the key findings, conclusions, and recommendations from our recently issued work on China-WTO issues and (2) updated the Commission on a number of ongoing GAO reviews on China trade and economic issues. The observations are based on a series of reports initiated at the bipartisan request of various congressional committees. That work has included an analysis of China's commitments, surveys and interviews with private sector representatives, and the results of two annual assessments of the U.S. government's compliance efforts. Additionally, our work on China- WTO issues included fieldwork in Washington, D.C., China, and at the WTO headquarters in Geneva, Switzerland.

The complexity, breadth, and ongoing nature of many of the problems with China's WTO compliance demonstrate the need for a cohesive and sustained effort from the key U.S. agencies to effectively monitor and enforce China's implementation of its commitments. The U.S. Trade Representative (USTR), and the Departments of Commerce, State, and Agriculture (USDA) have coordinated on policy issues and increased staff resources to enhance their capacity to carry out these efforts. However, there are three areas in which we noted that these key agencies should take steps to improve their efforts and maximize the effectiveness of the resources allocated to the task of securing the benefits of China's membership in the WTO. First, although U.S. government efforts to ensure China's compliance emphasize high-level bilateral engagement, we recommended that USTR take steps to maximize the potential benefits of the WTO's annual multilateral review of China's compliance, referred to as the Transitional Review Mechanism (TRM). Second, to more effectively plan and measure results, we recommended that each of the key agencies improve performance management of their China-WTO compliance efforts. Third, we recommended that, in an environment of high and regular staff turnover, the key agencies should direct additional management attention to ensuring that staff have an opportunity to acquire training relevant to their China-WTO compliance responsibilities.

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