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You all must have heard China's name in almost every variable of economy, be it trade or population. China is the world's second-largest economy and is referred to as an upper-middle-income country. It is the world’s largest receiver of investment, fastest-growing consumer market, and the world’s major provider of manufactured goods as consumers from all over the world enjoy affordable goods made in China. So, can we say that China should have been added as a member of WTO? Nobody can deny the fact that the World Trade Organization is amazingly well off with China as it’s member. Does this mean that WTO has a soft corner for China? Can WTO’s dispute settlement system be used to address the complaints against China? Is China misusing WTO? Is WTO not fair-minded when it comes to China?

To get an answer to these questions, read the full article.

Let us first know what exactly is WTO?

World Trade Organization

WTO is the inter-governmental organization which got it ball rolling officially on 1st January 1995 under an agreement which was signed by 123 nations. It replaced the General Agreement on Tariffs and Trade (GATT) and manages international trade. WTO is very advantageous in blooming international trade by making fair trade agreements and avoiding disputes by ensuring adhesion to these agreements. It has a dispute settlement body that deals with the conflicts between WTO members.

China wanted to be a member of WTO in order to expand its trade, for improved living standards domestically and to stand strong in the global world. China got along with WTO on 11 December 2001. China has to amend its policies to hold fast to WTO rules i.e. reducing tariffs, and changing other policies. However, China has not been up to mark with complying its obligations under WTO. China, even outside the organization, was the biggest trading country in the world and it would be a great loss for WTO if China would not be a part of it. The reality is that China used WTO according to its own convenience. It took advantages of the amenities that suit its interest and dodging all the rules that were less suitable.

There’s a long list of problems between the US and China concerning trade. The Trump administration brought to light on the fact that WTO has failed to label China's unfair trade practices. If we look at the facts, the US has placed 23 out of 43 cases against China. Complainant is the country which files a case against another and the respondent is the country who defends itself.

Major allegations against China tells us how China encourages its export on one hand while making it difficult for other countries to do business in China on the other. Also, China takes part in numerous unfair trade practices like high tariffs, protectionism, and rigid regulations. The Trump organization also said that there isn’t anything under WTO rules to make China stop.

These activities of China has an adverse impact on the U.S economy. If you are wondering how - let's have a look in the picture below.

However, China has done a great job in dealing with complaints bought against it. We can say that China has played its game very smartly. It hasn’t broken any explicit rules of WTO, but it has surely broken the pneuma of WTO regulations. For instance, after joining WTO, China devalued its currency by 30% which made it's export cheaper and to its good, there wasn’t such thing as WTO provision on currency manipulation. China is playing smart by manipulating the WTO rules. After all, China has a right to rise but it still doesn’t have a right to breach WTO's obligation.

Now the question comes, whether China is ready to amend it’s ways or not? I don’t think so. It's very clear. China has witnessed growth in its economy since it has been a member of WTO. It has not only made itself strong in international markets but also shone domestically. China has one of a kind Ninja-technique to steer the rules according to its own term so that world works for it, not oppose it. Moreover what I think is that China should not fall, as the rise of China is beneficial for all the countries in the world due to its low labour, high productivity, and the competition which China brings to the international markets is making everyone better off (Especially the consumers).

What do you think about the above-mentioned situation? Does it really make you believe that China is indeed misusing WTO as it’s the strongest member of the organization?

Do let me know in the comments below.

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