In December 2001, a talk show on Chinese TV tested the participants’ knowledge of China’s entry into the World Trade Organization (WTO), which was taking place at that time.
In the style of “Who Wants to Be a Millionaire”, the program rewarded those who knew, for example, that car rates would be reduced from up to 100% to 25% and that those on auto parts would drop from 23% to 9.5%.
Over the 15 years of negotiations, entry into the WTO came to be seen by Beijing as a fundamental instrument to accelerate domestic reforms and modernize the economy, despite the costs and resistance, including from the automotive sector.
In China in the 1980s and 1990s, openness and reform were hot ideas, and the composition of forces in the Communist Party favored reformers. The perception, registered in the past within the legend itself, that participating in the club was to give in to imperialist pressure and capitalist interests had definitely been left behind.
Joining the WTO is a milestone in China’s integration into the global economy. In 2013, the country became the main commercial power, leaving the sixth position it occupied in 2001.
Today, more countries have China, no longer the US, as their main trading partner. The weight of the Asian country for Brazilian exports is enormous: in 2020, a third of what Brazil exported had the Chinese market as its destination. The jump went from $2 billion to $68 billion between 2001 and 2020.
At the same time, imports from China increased rapidly around the world. Main world exporter, the country became an unbeatable competitor in many segments, in all countries, taking space from competitors. The frustration of many with the WTO, especially in the US, can be inferred from a phrase by Donald Trump: without the WTO, China would not be China. The Chinese advance fuels resentment towards the organization.
On the other hand, a former Chinese negotiator at the organization recently recalled that in 2001, the US and China followed very different paths. That year, Washington came to see combating terrorism as a strategic priority in the wake of the 9/11 attacks. Beijing accelerated reforms that catapulted growth, including in trade. It wasn’t China or trade issues that the US was worried about.
On the other hand, a former Chinese negotiator at the organization recently recalled that in 2001, the US and China followed very different paths. That year, Washington came to see combating terrorism as a strategic priority in the wake of the 9/11 attacks. Beijing accelerated reforms that catapulted growth, including in trade. It wasn’t China or trade issues that the US was worried about.
Such is the importance of joining the WTO for China that the party’s museum, which opened this year in Beijing, has dedicated a section to the topic. On a pedestal, protected by a glass case, there is a copy of the country’s entry into the agency. There are about 900 pages.
The current challenge, for China and for the world, is to ensure that the WTO’s commitments are not just a museum piece. The risk exists mainly because, for the US, the great architects of the system and guarantors of China’s accession, the organization is no longer able to guarantee fair competition, especially given the strong presence of the state in the Chinese economy.
A former American negotiator told me: it is as if, on the same field, one team came in to play football and the other to play football. Someone is going to get hurt.
China, in turn, understands that it paid the ticket to join the club and that, now, the US is putting the ball under its arm to leave. Renegotiation of trade rules to make them acceptable to the two powers, and to everyone else, will be a greater epic than China’s entry into the WTO.
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