Chinas Wto Accession and Sustainable Development

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The First Meeting of the Third Phase China Council for International Cooperation on Environment and Development

CHINA’S WTO ACCESSION AND SUSTAINABLE DEVELOPMENT

2002 Report to the China Council for International Cooperation on Environment and Development

by Task Force on WTO and Environment November 23-25, 2002

CHINA’S WTO ACCESSION AND SUSTAINABLE DEVELOPMENT 2002 Report to the CCIED by The Task Force on WTO and Environment November 23-25, 2002 Beijing China

I.

Key issues for China as a WTO member

1. WTO Accession and Environmental Consequences China’s accession to the World Trade Organization (WTO) is an important event for both China and the WTO. Accession will accelerate and modify the processes of structural economic change that have characterized China’s economy for the past decade. It is well established that these processes create major environmental challenges. Indeed China’s environmental policy over the past decade has largely developed in response to the changes that have occurred in China’s economy. WTO accession will intensify these changes in ways that are not entirely predictable, because they will respond not only to the continuing growth dynamic of China’s economy but also to the adjustment of that economy to the rules of the WTO and to the provisions of numerous bilateral agreements that preceded accession. In many ways it represents the most dramatic change ever undertaken in a large economy. The uncertainty that characterizes the anticipated environmental consequences of China’s accession to the WTO should not lead to the assumption that these consequences will be minor. It is unfortunately not possible to predict with a high degree of certainty what they will be. It is, however, possible to identify a number of sectors where environmental consequences are most likely to occur. These include agriculture, automobiles, energy, fisheries, forestry, and textiles. Agriculture may prove to involve several distinct products or groups of products such as cotton, grains, fruits and vegetables, or animal husbandry. China needs to monitor closely developments in these sectors and the resulting environmental consequences. Over the past years, several countries and some international organizations have been working intensively to develop methodologies for the environmental assessment of trade agreements. These have proven most productive when applied to individual sectors of an economy rather than attempting to assess all sectors simultaneously. This is also due to the fact that the environmental impacts of different sectors are distinctive and that no

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reliable methods have emerged to undertake a quantitative assessment of these environmental impacts. The expectation of significant environmental challenges that will arise as China’s economy adjust to the requirements of the WTO and of bilateral agreements preceding WTO accession also has important implications for China’s environmental management system. This will need to be able to respond quickly and decisively as environmental impacts become visible. Since many of these impacts are liable to occur in the countryside because many of the affected sectors involve commodity production, China’s environmental management system must be particularly responsive to changes in the rural environment, in addition to its traditional focus on pollution impacts in the urban environment. 2. WTO Accession and Policy Implications Chinese laws, regulations and policies; the governmental regulatory regime; the administrative ideology and behaviors have long been developed under the Chinese planned economy system in the past. Many of them are inevitably incompatible with commonly-accepted international norms under a market economy. WTO accession will require significant changes in China’s governmental administration, and its regulatory regime. Although China has established its legal system in response to its transition from a planned economy to a...
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