Selective Merchandise Trade Liberalisation: Economic Status, Standardisation, and Transparency

Beyond mere merchandise trade liberalisation, China uses Free Trade Agreements (hereinafter FTA) to redress its economic status under the laws of the World Trade Organisation (hereinafter WTO) on two fronts: First, it aims at acquiring market economy status through FTAs to compensate for discriminatory treatment based on non-market economy (hereinafter NME) price calculation methodologies for antidumping investigations at the WTO. Second, China seeks to preserve developing economy status to benefit from technical assistance and technological cooperation under the WTO’s Special and Differential Treatment provisions. On above grounds, this chapter submits that China redresses NME-status with market economy and developing country status both under WTO law and FTAs. It further demonstrates that FTA partners readily grant China market economy status. However, they expect something in return. Thus, China offers selective tariff reductions on resources vital to food and energy security, while protecting State-traded products essential to national security. In addition, China fortifies its integrity through strong governance rules on transparency and standardisation, rendering institutions more accountable domestically, and legitimising Chinese standards internationally. To underpin these arguments, this chapter analyses how China uses FTAs to acquire market economy status, preserve developing country status, legitimise Chinese standards, and increase the confidence of trading partner through transparency.