Bridges Weekly Trade News Digest • Volume 5 • Number 42 • 12th December 2001

China Accession Completed, Taiwan To Join In New Year

After 15 years of difficult negotiations, China on 11 December formally became the 143rd Member of the WTO. To comply with its WTO obligations, China will need to weaken its control on trade and markets in areas such as foreign investment and corporate privatisation. China’s reformers are anticipating reduced operating costs, less red tape and more foreign capital, with the WTO seen as providing political cover for much-needed reforms. Major trading partners, such as the US and Japan, are hoping for greater trading and investment opportunities with the world’s most populous nation. "There is nothing in Silicon Valley as interesting as China is now," said Warren Christopher, former US Secretary of State. Market opening is furthermore expected to increase China’s gross domestic product by 0.5 percent on average annually over the next 10 years, according to one estimate. Some, however, also point to negative effects that WTO membership is likely to have and the inevitable adverse impact on some industries and products. Taiwan is set to become the 144th WTO Member on 1 January 2002.

"WTO Drives Economic Change in China," WALL STREET JOURNAL, 11 December 2001; ICTSD Internal Files.

DSB Takes Up Investigation Of US Duties On Canadian Lumber

On 5 December, the WTO Dispute Settlement Body (DSB) launched an investigation into allegedly illegal US countervailing duties on Canadian softwood lumber. The panel now formally comes into existence after this second request from Canada, with the first being blocked by the US at a 5 November DSB meeting (see BRIDGES Weekly, 6 November 2001). The investigation will address a 9 August US imposition of a 19.31 percent countervailing duty on Canadian softwood lumber. US WTO Ambassador Linnet Deily insisted again that the request for a panel was "premature" due to the "preliminary" nature of the duties imposed - which combined, effectively tally 32 percent. This panel is one of a number of actions currently underway to resolve the dispute - including intensive bilateral negotiations, as well as a $250-million lawsuit against the US government by Canadian logging company, Canfor Corp., under the North American Free Trade Agreement (NAFTA). Future DSB meetings take place on 18 and 21 December.

"WTO Sets Up Dispute Panel to Rule On U.S. Softwood Lumber CV Duties" WTO REPORTER, 6 December 2001; ICTSD Internal Files.