China and the WTO: International Obligations and Cultural Barriers

Abstract:     
China's accession to the WTO represents a goal achieved after nearly fifteen years of exhausting negotiations. A special precautionary instrument, the Transitional Review Mechanism (TRM), was included in the Protocol of China's Accession to the WTO, as requested by the US and supported by the EU. The TRM has the objective of monitoring and enforcement of implementation of WTO commitments, promoting transparency and the exchange of information in trade relations with China. China is lowering the expectations of some of the WTO members for the outcome of the TRM. It follows that the WTO members' participation in the review had declined in favour of bilateral negotiations which result in the best means to overcome many problems in China's WTO compliance. It is necessary to try to understand if there are comprehensive and 'justifiable' reasons for China to delegitimize the multilateral system at the WTO in general and in the TRM context. According to some scholars, the general Chinese behaviour not in favour of the TRM could be explained with reference to the Chinese cultural tradition, where the best way to resolve the disputes was through mediation and conciliation. China is a high-context society, where the central role is played by collective entities and groups and not by individuals. A key element in the Chinese mentality (such as in other Asian, Middle East and South American countries) is the concept of preserving group harmony and maintaining one's public image. The best behaviour is to try to avoid any direct confrontation, such as bringing a lawsuit.

Number of Pages in PDF File: 10

Keywords: China, WTO, TRM, Transitional Review Mechanism, Culture, Guanxi, Confucius, Losing Face, Mediation, Concilation, Cultural Traditions

JEL Classification: K33

Accepted Paper Series