Law’s Timothy Webster testifies in Washington about U.S.-China trade relations

Timothy WebsterTimothy Webster, assistant professor of law and director of the East Asian Legal Studies program, testified last week in Washington, D.C., about China’s compliance with World Trade Organization (WTO) regulations.

Skeptics have wondered if the United States’ trade relationship with China is fair and whether China is willing to abide by the rulings of the WTO’s Dispute Settlement Body (DSB). Webster advised members of a joint commission that the U.S. perspective should be tempered by the evolving, increasingly complex international relationship.

Webster was among four experts invited to testify at a hearing of the Congressional-Executive Commission on China (CECC) about China’s compliance with WTO and international trade regulations. Webster’s forthcoming article in the Michigan Journal of International Law examines China’s WTO compliance record, particularly its implementation of DSB decisions.

Congress created the CECC in 2000 with the legislative mandate to monitor human rights and the development of the rule of law in China, and to submit an annual report to the president and Congress. The CECC consists of nine senators, nine members of the House of Representatives and five senior administration officials appointed by the president. Ohio Sen. Sherrod Brown chaired the hearing.

“Throughout the U.S., but particularly here is Washington, as we’ve heard from the panel this morning, there’s a pervasive belief that China is an international trade scofflaw by manipulating its currency, subsidizing its domestic industries and dumping goods in the U.S., and China is seen a scourge whose baleful influence harms us all,” Webster said. “My recent research, which will appear later this year in the Michigan Journal of International Law, attempts to temper this view through empirical observation.

Webster told the commission he has examined China’s record of implementing 10 decisions that have been rendered by the WTO’s DSB over the past few years.

“I find a strong, but increasingly imperfect, record of implementing DSB decisions,” he said. “I conclude that China is, at base, a system maintainer, not a system challenger.”

He further explained: “Part of using any system—whether the rules of civil procedure or the rules of international trade or the rules of football—is tactical manipulation. A smart lawyer, coach or WTO member will strategically deploy procedural rules to benefit his client or to benefit his side to the greatest extent he can. Of course, sometimes a member will break the rules, and that I think is where China is moving, and has moved in the past few years.”

In WTO trade cases before 2007, China was quick to settle WTO decisions and change its laws in accordance with those rulings, Webster said.

“But after gaining familiarity with the DSB procedures, China has become an increasingly sophisticated WTO litigant and now more willing to use DSB procedures to minimize the effects of adverse rulings,” Webster said during his testimony. “Once decisions have been rendered, China is not necessarily willing to implement those decisions as quickly as we might like. That includes taking an appeal, as it does when it appears a case might be really difficult to implement.”

The U.S. needs to focus on enforcement, Webster said, and “live up to its end of the bargain.” He referred to a Congressional Research Service report that lists a dozen WTO decisions that the U.S. has not fully implemented.