People's Republic of China

Position Paper Topic Area : The Future of International Trade after Economic Crisis Committee : World Trade Organization (WTO) Background: Doha round is the trade negotiation, agreed in 2011, aiming to lower trade barriers around the member of World Trade Organizations (WTO) which will help facilitate the increase of global trade. However, there has been years of stagnacy in implementing this round. As the global financial crisis happen in 2008, the economic stability is becoming more unstable and fluctuative which include financial and trade stability. Some major economies, such as United States of America (USA) and European Union (EU) are slowing down and getting collapsed significantly. However, as the economic system becoming more interlinked each other, the impact has spreaded globally. In this situation, WTO has big role in determining the further economic stability, especially through the global trade system. WTO also has the responsibility to ensure that the international trade remain free and fair even in the times of crisis. However, WTOs performance in improving the economic stability by boosting the international trade is constrained by the stagnacy of Doha Round. Thus, it is important to deal with the status of Doha Round in overcoming the future of international trade after economic crisis Causes There are several factors which cause the instability of current international trading system: 1. Conflict interest between developed and developing countries regarding free trade. The conflict of interest happens regarding the point of whether or not the liberalization of economy should be done, whether or not all of the economic barriers should be lifted up. In this case, developed countries and export-led countries highly support the liberalization economy in order to get a wider market for their product. In the other hand, developing and poor countries who mostly are less competitive demand for protection. However, at the development of the case, some of developed countries who get the severe impact of economic turbulence currently change their stance. This countries begin to seek for protection by doing some bail outs and some regulations which discriminate the foreign firms, workers and investors. This backlashes the stance of export-led countries. It is increasingly difficult for the Doha Round to develop. 2. Global financial crisis has generated trust problem among countries As the global crisis happened in 2008, countries are getting collapsed. This creates the problem of trust as the consequences. This trust problem happens among the countries, industries and even banks. This make countries unlikely to open their market for other economies. Some protectionist actions have been implemented in protecting its economy from further bad impact of crisis. Not only government, this trust problem also happens among the foreign investor. The crisis has decreased the number of foreign direct investment which slow down the economic growth. Even banks have this trust problem towards other banks which later decrease the number of credit circulation.

3. Currency competition The global financial crisis has generated the currency devaluation competition. This, somehow make the instability upon the trading system as it affects the competitiveness of some countries which implement this policy. Chinas Stance There has been a significant change in Chinas stance regarding the Doha Round. China used to be the leader of developing countries in opposing the liberalization of international trade. However, as China gains its economic dominance in international market, it is turning Chinas stance into supporting the Doha Round. China has made or jointly sponsored over a hundred submissions in connection with the Doha Round.1 As currently China depends heavily on international export markets, China needs the WTO to remain active in order to the keep foreign markets open which will maintain the Chinas economic growth. China believes that developing the Doha Round is a wise and visionary choice. China believes that the more serious a crisis becomes, the more committed we must be to openness and cooperation. Sollutions In ensuring that the stability of international trade system even in the times of crisis, there are some sollutions that could be proposed: 1. Enhancing more negotiations about the status of Doha Round. 2. Giving technical assistance to developing countries. 3. Accomodating the issue of currency devaluation competition regarding the stability of international trade.

Official: China has always played active role in WTO talks, Xinhua newswire, 24 July 2008.