MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS CHINA’S EXPERIENCE IN DEALING WITH WTO DISPUTE RESOLUTION AND LESSONS FOR VIETNAM International Trade Policy and Law FULL NAME: DANG THI TRANG Hanoi, 2019 MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS CHINA’S EXPERIENCE IN DEALING WITH WTO DISPUTE RESOLUTION AND LESSONS FOR VIETNAM Major: Economics Specialization: International Trade Policy and Law Code: 8310106 Full name: Dang Thi Trang ID: 1606060020 Supervisor: Dr. Nguyen Binh Minh Hanoi, 2019 REASSURANCE I hereby declare that my work is the result of my personal research and study under the support and supervision of Dr. Nguyen Binh Minh. In the whole content of the thesis, what is presented is either personal or aggregated from multiple sources of references which are legible and legally cited.
Hanoi, April 2019 Dang Thi Trang ACKNOWLEDGEMENT First and foremost, I would like to express my sincere gratitude to my advisor Dr. Nguyen Binh Minh for the continuous support of my graduation master thesis, for his patience, guidance and knowledge. Hardly could I complete my work without his enthusiastic guidance and suggestions throughout the past five months. Beside my advisor, I would like to thank all professors and lecturers in Foreign Trade University, especially professors and lecturers teaching in Master Program of International Trade Policy and Law, who spent all enthusiasm and dedication to bring knowledge to students.
The knowledge acquired in the learning process is not only necessary for me to finish my thesis but also the luggage that I would confidently carry into the outside world. My special thanks also goes to my family, my best friends and my classmates for the encouragement and spiritual supports they gave me to overcome hardness when doing my master thesis. Hanoi, April 2019 Dang Thi Trang TABLE OF CONTENT REASSURANCE. 2 LIST OF ABBREVIATION.
5 LIST OF TABLE. 6 LIST OF FIGURE. 6 LIST OF DIAGRAM. 6 LIST OF MAP.
1 CHAPTER 1: MECHANISM OF DISPUTE RESOLUTION IN WTO. Definition of Dispute resolution. Procedure of Dispute Settlement Mechanism .1 Procedure of Dispute Settlement Mechanism. WTO Dispute Mechanism with the participation of third party.
Overview of WTO dispute settlement mechanism .19 CHAPTER 2: CHINA’S EXPERIENCES IN DEALING WITH DISPUTE RESOLUTION UNDER WTO. Overview about China’s economy and policy. China’s economy and policy. Overview of China in dispute resolution under WTO.
China’s experience in dealing with WTO dispute resolution as a complaint. China’s experience in dealing with WTO dispute resolution as a complaint in “Acceptance” period. China’s experience in dealing with WTO dispute resolution as a complaint in “Consolidation” period. China’s experience in dealing with WTO dispute resolution as a complaint in “Activation” period.
China’s experience in dealing with WTO dispute resolution as a respondence. China’s experience when being the respondence during the “Acceptance” period. China’s experience when being the respondence during the “Consolidation” period and “Activation” period. China’s experience in dealing with WTO dispute resolution as a third party 42 2.
Experiences from China in dealing with WTO dispute resolution. China’s characteristics in dealing with WTO dispute resolution. Experiences from China in dealing with WTO dispute resolution .48 CHAPTER 3: LESSONS FOR VIETNAM IN DEALING WITH WTO DISPUTE RESOLUTION. Overview about Vietnam’s economy after WTO accession.
Vietnam participates in WTO dispute resolution .Vietnam in dealing with WTO dispute resolution as complaint. Vietnam in dealing with WTO dispute resolution as a respondence. Vietnam in dealing with WTO dispute resolution as a third party. Advantages and challenges of Vietnam in WTO disputes resolution after WTO accession.
Lessons for Vietnam when joining WTO Dispute Resolution. 67 LIST OF REFERENCES. 72 APPENDIX 01: CHINA INVOLVING IN WTO DISPUTE SETTLEMENT AS COMPLAINT. 72 APPENDIX 02: US – CHINA TRADE WAR.
74 APPENDIX 03: VIETNAM INVOLVING IN WTO DISPUTE SETTLEMENT AS THIRD PARTY. 81 LIST OF ABBREVIATION Number Abbreviation Expansion 1 ACWL Advisory Center on WTO Law 2 DSB Dispute Settlement Body 3 DSM Dispute Settlement Mechanism 4 DSU Dispute Settlement Understanding 5 GATT General Agreement on Tariffs and Trade 6 GATS General Agreement on Trade in Services 7 GDP Gross Domestic Product 8 IMF International Monetary Fund 9 US United State 10 TRIPS Trade-Related Aspects of Intellectual Property Rights 11 VCCI Vietnam Chamber of Commerce and Industry Vietnam Association of Seafood Exporters and 12 VASEP Producers 13 WTO World Trade Organization LIST OF TABLE Table 1.1: Leadtime for processing a dispute .1: China: Structure of the Economy 2017.2: China economy data, 2017 .1: Vietnam economy data, 2018 .2: Vietnam participates in WTO dispute settlement as a complaint .3: WTO members participate in dispute settlement as a respondence ……57 LIST OF FIGURE Figure 1.1: WTO agreements referred to in requests for consultations, 1995 - 2016. 21 LIST OF DIAGRAM Diagram 1.1: Process of solving a case in Dispute settlement mechanism. 11 LIST OF MAP Map 1.1: Map of disputes between WTO Members, 2019 .1: China involving in WTO dispute settlement .1: Vietnam participates in WTO disputes settlement.
52 1 INTRODUCTION Overview World Trade Organization (WTO) was officially established after the date of January 1st 1995 as a result of the Uruguay Round (1986 to 1995) with the predecessor the General Agreement on Tariffs and Trade (GATT 1947). WTO is considered as a significant success in the development of legal framework in international trade of the twentieth century with a massive system of treaties and agreements, the list of tariff concessions which regulate the commercial rights and obligations of the member states. WTO dispute settlement mechanism (DSM) is one of the systems which was established to protect the rights and interests of WTO members in international trade. Learning from the shortcomings of the old mechanism, some basic improvements in procedures have been included in the new mechanism, a significant contribution in improving the judicial nature of this procedure as well as enhancing the binding decisions of the dispute resolution.
On 11 December 2001, China became a Member of the World Trade Organization (WTO) after seventeen years of tough negotiations. This was an important step towards making the WTO a truly world organization. China considers that its ability to use dispute settlement mechanism to defend its rights and interests which is an important benefit of its WTO membership. Regarding to Vietnam, after 12 years of WTO membership, Vietnam had an important beginning in using the dispute settlement mechanism of the WTO to protect the rights and interests of its enterprises in international trade: On the day of the 1st of February 2010, the Government of Vietnam set a very first step in its WTO mission by sending a request for consultations to the US government related to the antidumping measures on products frozen warm water shrimp imported from Vietnam.
From then, Vietnam seemed to realize the importance of using WTO Dispute Settlement Mechanism as an effective measure to protect the interests in international trade relations. On the other hand, the use of this mechanism as a defendant or plaintiff requires an abundance of human resources, experiences as 2 well as financial support. Meanwhile the participation as a third party is very noticeable because it will be an opportunity to learn and accumulate lessons and experience in how to take part in a WTO dispute settlement. Moreover, although not directly involved in the settlement, Vietnam can gain some benefits from the outcomes of a settlement.
It cannot be denied that being a developed country, as well as the fact that compared with many other members of WTO, China is becoming the country who use the dispute settlement mechanism effectively. Vietnam is rather weak and short in dispute settlement experience, it is necessary for Vietnam to pay more attention in enhancing the ability and capability in disputing a settlement, by learning lessons from China like joining as a third party in WTO dispute settlement. Therefore, the purpose of this paper is that, through the analysis about China’s experience in WTO dispute settlement in particular, give the lessons for Vietnam in how to be more effective in using DSM and protecting its benefits. Literature review China in dealing with Dispute settlement in WTO has attracted domestic and foreign researchers.
From 2001 to 2012, there are many researches analyze about the participation of China in WTO and how China using Dispute settlement mechanism to protect themselves. However, these researches only point out the facts of China in dealing with WTO dispute settlement and attitude for this problem. That study only went into understanding the general and basic issues of WTO dispute settlement mechanism and offering some solutions to overcome difficulties and obstacles and improve the efficiency in the process dispute resolution. The analysis of the reasons for winning and lessons learned from China has not yet been drawn.
The Chinese expert who first studied this problem who we have to mention is Dr. Ji Wenhua - an official in charge of dispute settlement activities at China’s WTO Mission in Geneva. He was the one who contributed and advised the Chinese government on how to face international dispute resolution in the integration 3 process: Wenhua JI and Cui HUANG, “China’s Experience in Dealing with WTO Dispute Settlement: A Chinese Perspective”, (2009). Besides, we also can mention many researches about this issue: Jessica C.
Liao, “China’s Reluctant Usage of The WTO Dispute Settlement System”, (2011) Regarding to the foreign experts, there are many experts choosing this field for their research. Since China joined WTO, Henry Gao has followed closely the process of China in dealing with WTO dispute settlement. He has many in-depth articles on this issue. In 2007, he had an analysis of China's experience participating in the international dispute resolution process at the time of joining.
Subsequently, in 2010 Mr Henry Gao continued to work with Hanyu Liu to study about the WTO dispute settlement, including an analysis of China's current international dispute settlement process. In 2011, Henry Gao continued to make certain judgments about China's use of the international trade dispute settlement system, assessing China's transformation in acquiring the trade disputes in WTO, from passive reception at the first stage to active making comments and rules in the WTO’s intergration. GAO, “Taming the Dragon: China 's Experience in the WTO Dispute Settlement System”, (2007) Hanyu liu & Henry S. GAO, “Dispute settlement at the WTO”, 2010 Henry S.
GAO, “China in the WTO dispute settlement system: From passive rule-taker to active rule-maker?” (2011) In additions, there are many researches about this field, “China’s Evolving Role in WTO Dispute Settlement: Acceptance, Consolidation and Activation” by Bryan Mercurio and Mitali Tyagi at The Chinese University of Hong Kong in 2012. This research also has a very profound analysis of China's attitude towards the international dispute settlement mechanism after its accession to the WTO in 2012. The article divided time into 3 stages: “Acceptance, consolidation and activation” which clearly analyze the attitudes of China at this stage through each specific situation. However, the article has not given China's experience and reasoning and arguments in each case, it only shows the Chinese attitude.
4 Research questions In alignment with my interest in studying lessons for Vietnam in joining as a member of WTO and using the WTO dispute settlement mechanism effectively, this paper contributes to the research by answering the following research questions. The first question which should be answered is what the WTO Dispute Settlement Mechanism is. To exactly understand this issue, WTO Agreements and Dispute Settlement Understanding are the most reliable information sources to know how the Dispute Settlement Mechanism works. With nearly 20 years of in using DSM to protect their rights and interests in international trade.
China, which have the similar conditions as Vietnam, is very active in this kind of settlement and worth being considered as an example for Vietnam.