WTO Accuses China of Low Transparency on State Subsidies

*Okonjo-Iweala: Benefits of WTO membership not automatic

Ndubuisi Francis in Abuja

Secretariat of the World Trade Organisation (WTO) has accused China of an alleged lack of transparency in the nation’s state support framework, urging it to improve its subsidy notification process.
WTO’s report which it carried out on China’s trade policies concluded that the country lacks transparency regarding subsidies for its industries, including solar module manufacturing.
In the 173-page “Trade Policy Review,” the WTO Secretariat noted that many members had called for a thorough review to enhance transparency in China’s state support framework.
“Considerable skepticism remained among Members about the thoroughness and overall quality of China’s subsidy notifications.
“In addition to the lack of transparency, many members believed that China’s subsidies distorted global markets and promoted overcapacity. Some Members urged China to join other major economies in discussions on industrial policies to help mitigate their possible negative global impacts,” it said.
The report cited aluminum, electric vehicles, solar modules, glass, shipbuilding, semiconductors, and steel as sectors in which China allegedly lacks transparency for public subsidy allocations.
According to the WTO, in recent years, the nation has reported its subsidy programmes for 2019-20 and 2021-22, but claimed that it has been unable to obtain a “clear overall” picture of these programmes.
“I encourage the Chinese authorities to carefully consider the constructive suggestions put forth by members during this Review.
“I commend China for providing thorough written responses to all questions received within the prescribed deadline, and delegations anticipate receiving the final responses within one month,” an unnamed
WTO Secretariat official said in a statement.
In another development, the WTO Director-General, Dr. Ngozi Okonjo-Iweala has declared that accession to the global body is just the beginning, and that the benefits of WTO membership were not automatic.
She spoke yesterday during a ceremony at the start of the General Council meeting in Geneva, Switzerland where Comoros and Timor-Leste handed over to her their acceptance of the WTO Protocols of Accession, setting both countries on course to formally become the 165th and 166th members of the WTO in late August.
Speaking at the ceremony, she said: “We are happy and proud that the WTO family is set to grow for the first time in eight years.
“Today’s handovers demonstrate just how seriously and responsibly both LDCs (Least Developing Countries) take their WTO obligations, especially in implementing the commitments which they undertook during their accessions.
“One such commitment was to accept the Fisheries Subsidies Protocol along with the Accession Protocol. The observance of this commitment has ensured that the threshold for entry into force of Fish I (the Agreement on Fisheries Subsidies adopted in June 2022 at the 12th WTO Ministerial Conference in Geneva) would not be delayed by the increase in the WTO membership.”
Okonjo-Iweala noted that accession was just the beginning, adding that “the benefits of WTO membership are not automatic, and new members will need a support network to continue domestic reforms and to operate effectively in the global economy.” She requested WTO members and partners “to provide necessary assistance to both of these LDCs in the post-accession phase with the same generosity as they did during accession.”
Comoros will become the 165th WTO member on 21 August, following today’s deposit of the Protocol of Accession.
For Timor-Leste, the formal deposit of the Protocol of Accession will be dated 31 July, meaning that the country will become the 166th WTO member on 30 August.
This date coincides with Popular Consultation Day in Timor-Leste, commemorating the 1999 referendum paving the way for the country’s independence.
Under WTO rules, membership of an accession candidate takes effect 30 days after its instrument of acceptance is deposited at the WTO.
Comoros applied for WTO membership on 22 February and the Working Party was established in October 2007. Members of the Working Party concluded the negotiations on 9 January 2024. Following approval by WTO members at MC13, Comoros’s National Assembly ratified the Protocol of Accession on 10 June.
Timor-Leste applied for WTO membership on April 7, 2015, with a Working Party established on December 7, 2016. Members of the Working Party concluded the negotiations on January 11, 2024. Following approval by WTO members at MC13, Timor-Leste’s National Parliament ratified the Protocol of Accession on June 3, 2024.
With the acceptances of the Fisheries Subsidies Agreement by Comoros and Timor-Leste, 29 more formal acceptances are now needed for the Agreement on Fisheries Subsidies to come into effect.
The Agreement will enter into force upon acceptance by two-thirds of the membership.
Adopted by consensus at MC12, the Agreement on Fisheries Subsidies sets new, binding, multilateral rules to curb harmful subsidies, which are a key factor in the widespread depletion of the world’s fish stocks.
In addition, the Agreement recognizes the needs of developing economies and LDCs and establishes a fund to provide technical assistance and capacity building to help them implement the obligations.
The Agreement prohibits support for illegal, unreported and unregulated fishing, bans support for fishing overfished stocks and ends subsidies for fishing on the unregulated high seas.