Global trade reforms 'must not target China', warns WTO chief

Industry News | | MIC Customs Solutions |

Proposed reforms to global trade will fail if China believes new measures are designed specifically to target its interests, the head of the WTO has said.

The director-general of the World Trade Organization (WTO) has stated that if efforts to reform global trade rules are to be successful, they must not give the impression that other world powers are singling out China.

Speaking at a conference hosted by the European Commission on Monday (April 26th), Ngozi Okonjo-Iweala said that any such measures would only serve to increase the chances that Beijing will not cooperate with multilateral efforts to boost trade.

Such measures may also be impossible to get through the WTO, which requires unanimous approval from its 146 members - including China - for any new rules.

"We also have to show China is not being targeted ... When China feels it is being targeted, and it's only about China, you get a lot of resistance," she stated.

Reuters reports that several other large economies, including the US, the EU and Japan, are keen to reform global trade rules to crack down on industrial subsidies, which they argue distort the global economy. Beijing supports a large number of powerful state-owned enterprises with such measures.

Other countries also feel that as China is on course to become the world's largest economy in the coming years, it should no longer be able to benefit from concessions offered to developing countries.

However, Ms Okonjo-Iweala said that in order to get Beijing on board with any proposed overhauls to the global training structure, the country will need to see the WTO tackling other forms of subsidies.

For example, global agricultural subsidies were worth around $1 trillion per year and could reach $2 trillion by 2030, and this is something China would like to see addressed, as it feels these policies give advantages to developed and larger emerging markets at the expense of poor countries.

Ms Okonjo-Iweala said: "The dealings I have had with China have been very constructive and I think that if we put the facts on the table about the negative spillovers from such industrial subsidies and share them with China ... they will be willing to look at that."