INSIDE GLOBAL ISSUES
Working Paper No. 201408, March 6rd , 2014
China’s Regional and Bilateral Trade Agreements
Li Chunding, Wang Jing, John Whalley
Abstract
China has been increasingly active on the regional trade agreement front over since WTO Accession occurred in 2001. These agreements, unlike the US and EU cases, follow no template form of agreement but vary substantially one among the others and are in part an attempt to customize agreements to partner prior agreements. There are presently 12 concluded agreements, 6 under negotiation, and four others under consideration. These concluded are in the main with smaller countries. Those in prospect are with major trading areas (US, Japan, Korea, and India). All are driven in part by China’s needs for export access to fuel continuing export lead growth, but other elements enter including using regional agreements to offset unwelcome elements of multilateral arrangements (such as the non-market economy labelling), and attempting to put in place via RTA building blocks an Asian trading hub. Outstanding issues not centrally addressed by these agreements include anti-dumping duties, and investment and competition issues.
Keywords: Regional Trade Agreement; China; Bilateral; Multilateral
JEL Classification: F15; F60
1. Introduction
In 2001 China acceded to the WTO driven in large part by the view that integration into the world economy was central to China’s development ambitions in helping provide improved access to key export markets. There has since been considerable debate over whether the terms of WTO accession provided much by way of concrete improvement in access commitments by trading partners beyond the technical firming up of MFN by trading partners which some have argued that China already defacto enjoyed. Instead, the claim is often made that the more important impact of WTO accession was in terms of underpinning domestic market oriented reforms and establishing clearer rules of law internationally which proved key in fueling large increase in foreign direct investment which, in turn, fueled growth in both GDP and exports.
But China’s efforts at international economic diplomacy have not stopped at WTO accession, and since accession China has been increasingly active in its pursuit of regional and bilateral trade agreements. Since 2001 China has concluded agreements with 12 different entities (both countries and groups of countries), has 6 other under negotiation, and 4 under consideration. While that is a similar picture to elsewhere in Asia (Japan, Korea, for example), the picture in the Chinese case is of initial agreements focusing on local (Hong Kong) or smaller entities (Iceland, for example) that were easier to negotiate, before moving to larger and more consequential agreements (with ASEAN, for instance). Agreements now under consideration emphasize large country arrangements and are more important for China. These include a possible China-US FTA, possible participation in the Trans Pacific Partnership negotiation with 12 other Pacific countries, a bilateral agreement with India, and a trilateral China-Japan-Korea agreement.
China is not alone in pursuing a network of bilateral trade agreements. But China, more than any other larger economy reflects the need to attempt to enhance export access in this way. While export growth which has been falling since the financial crisis and in May 2013 turned negative, given export oriented growth is still the norm, access driven negotiation and bilateralism logically follow. In what following we argue not only that this strategy is now poised to enter a new stage of negotiation with large partners (using TPP, India), but also that China could benefit from a clearer focus on access related problems in such negotiation. Included in the list are anti-dumping duties, which we discuss in more detail, and where China faces continuing problems.
2. China’s Regional and Bilateral Trade Strategy
……
3. Characteristics of the RTA Strategy
……
4. Some Features of Key Arrangements
……
5. Possible Impacts of RTAs for China
……
Appendix: China’s RTA Agreements3
1. China’s Existing RTA Agreements
……
2. China’s FTAs under Negotiation
……
3. FTA Agreements under Consideration
……
