U.S. Dept. of State - IIP: The United States and China

Text: Senators Call for GAO Monitoring of China's WTO Compliance
(Senate Finance Chair Roth/Ranking Member Moynihan letter)

Two supporters of Permanent Normal Trade Relations (PNTR) status for China, and of that country's entry into the World Trade Organization (WTO), want the U.S. General Accounting Office (GAO) to monitor China's compliance with market access commitments it made in the WTO accession agreement negotiated with the United States November 15, 1999.

Senator William Roth (Republican of Delaware), the chairman of the Senate Finance Committee, and Senator Daniel Patrick Moynihan (Democrat of New York), the committee's ranking minority member, released June 19 a copy of the letter they sent to the GAO requesting it to prepare a report within 10 months after China's accession to the WTO to see if China has implemented the obligations it undertook to gain WTO entry.

After that initial report, the GAO should also conduct an "ongoing and systematic annual assessment of how China's actual implementation compares with its commitments," the senators said in a press statement.

Committee On Finance
William V. Roth, Jr., Chairman
News Release
June 19, 2000
ROTH, MOYNIHAN ASK GAO TO MONITOR CHINA'S WTO COMPLIANCE

WASHINGTON -- Senate Finance Committee Chairman William V. Roth, Jr. and Ranking Member Daniel Patrick Moynihan today sent a letter to Comptroller General David Walker, requesting that the General Accounting Office (GAO) monitor China's fulfillment of its WTO obligations.

"We believe that it is vitally important that the United States take all necessary steps to ensure that China is fulfilling the commitments that it made to the United States and other WTO members as part of its accession. The Administration has pledged to undertake special efforts to monitor and enforce China's compliance. We believe that it is also extremely important for Congress to conduct its own review of China's compliance with its WTO obligations," Roth and Moynihan stated in the letter.

The request asks for a report within ten months after China's accession to review whether China has implemented its WTO obligations at the time of its entry to the WTO, followed by an ongoing and systematic annual assessment of how China's actual implementation compares with its commitments.

Mr. David Walker Comptroller General of the United States U.S. General Accounting Office 441 G Street, N.W. Washington, D.C. 20548

The Senate is about to vote on historic legislation to grant permanent normal trade relations (PNTR) to the People's Republic of China upon its accession to the World Trade Organization (WTO). As an intermediate step to its accession, China concluded a bilateral market access agreement with the United States on November 15, 1999 that commits China to lower its tariffs and reduce other barriers to U.S. goods, services and investment. We expect that China will soon complete the remaining bilateral and multilateral negotiations that are a prerequisite to its joining the WTO and possibly accede to the WTO later this year.

As we consider this important legislation and China's entry into the WTO, we believe that it is vitally important that the United States take all necessary steps to ensure that China is fulfilling the commitments that it made to the United States and other WTO members as part of its accession. The Administration has pledged to undertake special efforts to monitor and enforce China's compliance. We believe that it is also extremely important for Congress to conduct its own review of China's compliance with its WTO obligations.

To that end, we request that the General Accounting Office (GAO) undertake a long-term body of work to provide Congress with a comprehensive, objective and independent assessment of China's fulfillment of its WTO obligations. First, within ten months after China joins the WTO, We request that GAO report on the extent to which China has adopted or amended its laws, regulations and policies to fulfill its WTO obligations within the time frames specified in China's Protocol of Accession and the Working Party report. GAO's report should identify the specific commitments that China agreed to undertake upon accession and the extent to which China actually satisfied those obligation in a timely manner. As well, this report should identify the obligations that China agreed to implement over transition periods, identifying both the obligations and the deadline for China's implementation. This report should be based on the terms of China's accession agreement and other relevant WTO agreements, as well as available information regarding China's actual implementation of its WTO obligations.

Second, one year after China's accession to the WTO, we request that GAO begin an ongoing and systematic assessment of how China's actual implementation compares with its benchmarked commitments. Included in this work, should be a yearly update of aforementioned report on the extent to which China has adopted or amended its laws, regulations or policies to fulfill its WTO obligations, including obligations that were not implemented as required upon accession or that were required to be completed within a specified transition period. As part of this work, GAO should also begin an annual survey of firms in the United States to determine the extent to which (1) China is abiding by its WTO commitments in practice; and (2) such firms have encountered any problems with respect to China not fulfilling its commitments. This survey should cover a cross section of small, medium, and large firms that export agricultural and manufactured products, and/or that provide services or invest in a variety of sectors. In addition, GAO's assessment should also examine U.S. Government efforts to monitor and enforce China's implementation of its commitments, including the use of U.S. trade laws and WTO mechanisms to address problems that have arisen. GAO should plan to conduct and report on this survey and assessment annually for a period of three years, at which time, we will reassess the need for GAO to continue this work.

We understand that this work will require GAO's full access to relevant information within the Office of the U.S. trade Representative, the Departments of Commerce, Agriculture, State and Treasury, and the U.S. International Trade Commission and we will work with you to ensure adequate access.

Your primary contacts for this work should be Frank Polk, Staff Director and Chief Counsel to the Senate Finance Committee, and David Podoff, Minority Staff Director and Chief Economist to The Senate Finance Committee.

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