Chapter 1.4: China s Commitments to the WTO - a Chinese Perspective

Shi Yonghai, Chairman, China Association of International Trade

Abiding by the non-discrimination principle

As the most basic principle of the WTO, non-discrimination includes most favoured nation treatment and national treatment. Before its accession to the WTO, most-favoured nation treatment was accorded to the countries with which China had signed bilateral preferential trade agreements. Now, according to the principles of most favoured nation treatment, China will eliminate or bring into conformity with the WTO Agreement all special trade arrangements, including barter trade arrangements, with third countries and separate customs territories , which are not in conformity with the WTO Agreement. Therefore, the non- discrimination principle in the accession documents refers mainly to national treatment of imported products.

The national treatment principle requires that the imported products be accorded treatment no less favourable in terms of tariffs and internal taxes than that accorded to the same kind of domestic products. In fact, national treatment, which is a principle that endorses the fair competition principle, is consistent with the target of China's reform and opening to the outside world and of establishing a socialist market economy. Except in a few cases, before its accession China had basically realized national treatment for imported products. China is committed to according treatments to forgeign products no less favourable in terms of tariffs and internal taxes than that accorded to the same kinds of domestic products. China is also making the necessary amendments and readjustments to practices and policies that are inconsistent with the national treatment principle to address issues such as the initial import registration of chemical products and the different treatment accorded to the sale of imported and domestic cigarettes.

China will notify the WTO of all the relevant laws, regulations and other measures relating to its special economic areas, where a special system has been established on tariffs, internal taxes and regulations. The non-discrimination principle shall also be fully observed within such special economic areas.

^[*] This chapter was originally written in Chinese and was translated by Yu Jin.