Fully agree with Anon. Similarly, the EU can continue to call China NME post 2016 but they are obliged to comply with WTO rules. Albania might not wish to sue the EU in WTO for fear of risking its potential EU bid, but China will not be afraid to do so. I think this is the main problem of O'Connor's argument. He's mixing two things up: the label and the substance. The EU can label China as an NME anytime they want, but post 2016 they have to change the substance of their AD law to avoid WTO violations. O'Connor is misleading people by confusing these two. Not sure if he did this intentionally or not.

I don't think this will happen, because post 2016, the burden of proof will be shifted back to the normal WTO rules, which means that the investigating authorities will have to prove the existence of NME before they can invoke any NME methodology. Thus, post 2016, the producers do not have to prove the MES at all. Thus, the question of what will happen if they cannot prove will never arise.

Yes I think this has to be the case, because para (a) states that they can use either Chinese price or NME "based on the following rules". Then (i) & (ii) went on to elaborate the rules for Chinese price and NME respectively. Thus (ii) clearly corresponds to the NME and its expiration must mean the expiration of NME too.

That's a very good initiative Simon. I think dissent should be allowed at panel stage but not the AB for the following reasons: 1. panels are ad hoc bodies, thus there is less of a need to maintain consistency among the panel members, while the AB is a permanent body and thus more need to maintain the coherence for institutional reasons; 2. As panel report is subject to appeal, dissent should be allowed to give the AB more choices of informed opinions. Moreover, if there is any problem with the dissent, the assumption is that the AB will be able to correct the problem. The AB, on the other hand, is the final adjudicator. Thus, these considerations do not apply and no dissent should be allowed.

That's a very good point Julia. It's indeed a bit problematic to refer to the "right to export". However if we read this sentence together with the preceding sentences in the same paragraph (see below), I think we can reasonably assume that he meant "trading rights" when he used "right to export". Or is it simply a typo and he really wanted to write "right to import"? When China joined the WTO, it agreed to grant sweeping trading rights to American companies. Despite this commitment, numerous Chinese measures continue to reserve the right to import certain products to firms that are either designated by the Chinese government or partially owned by the Chinese government. The WTO panel ruled overwhelmingly in favor of the U.S. claim that American firms must be given the right to export books, newspapers, periodicals, theatrical films and audiovisual products (including DVDs and sound recordings) to China.

That's a very good point Julia. It's indeed a bit problematic to refer to the "right to export". However if we read this sentence together with the preceding sentences in the same paragraph (see below), I think we can reasonably assume that he meant "trading rights" when he used "right to export" as he has been talking about trading rights all along. Or is it simply a typo and he really wanted to write "right to import"? When China joined the WTO, it agreed to grant sweeping trading rights to American companies. Despite this commitment, numerous Chinese measures continue to reserve the right to import certain products to firms that are either designated by the Chinese government or partially owned by the Chinese government. The WTO panel ruled overwhelmingly in favor of the U.S. claim that American firms must be given the right to export books, newspapers, periodicals, theatrical films and audiovisual products (including DVDs and sound recordings) to China.

To make it even more interesting, Sony has included with the PC a note disclaiming any responsibility arising from the use of the software. Is this a reference to the IPR infringement claims by Sold Oaks? A copy of the disclaimer can be found on my blog at http://wtoandchina.blogspot.com/2009/07/green-dam-equipped-pc-shipped-by-sony.html.

There's a host of legal issues arising from the software. In addition to the most obvious claims under WTO law and IP law, the mandatory installation of the software could also be challenged under China's anti-monopoly law, government procurement law, consumer protection law, product liability law, and even the Constitution. I think there are enough legal issues to fill a one-day workshop or even a well-paced two-day conference. Anyone interested in hosting such an event?

Great. I shall read your paper then.

Interesting post Colin. One quick thought: I wonder if you've excluded the cases the US and Canada brought against each other in your study? The reason is that, due to the “psychological baggage” that goes with the neighboring relationship as you mentioned, countries might deal with the trade disputes with their neighbors differently (for good or bad) than when dealing with disputes with a more remote trade partner. The fact that there is the NAFTA between the two countries further complicates the picture. Also the fact that some cases are actually related, such as the softwood lumber cases, should be taken into account.

Hi Julia, Thanks for the reply. I agree that MFN does not focus on "companies", but strictly speaking the focus is not on "Members" either. The language used focuses instead on "products from Members". Thus, even if only one product from the US is treated better/worse than products from other Members, there is, legally speaking, a case for MFN violation. Last time I checked, the market share of Mac in China is only 0.25%, which is much smaller than the share in the US, but the market is still quite lucrative given 1), the larger population in China; and 2), the higher retail price in China. I don’t have the exact figures for the computer sales but I believe most of the computers sold in China are also manufactured/assembled in China. However there are some computers which are imported from abroad for various reasons (model not available in China, cheaper price, etc). There will be MFN and TRIMS issues for these products.

Another possible argument for the MFN claim is that the software is not required for smartphones. Now the difficult question is: are smartphones and computers "like products"?

I think there are at least two possible legal claims: 1. MFN. The software only has Windows version and doesn’t have a Mac version. This means either Apple computers can be sold in China without pre-installing the software, or that Apple computers cannot be sold in China at all. Either way it’s a violation of MFN; 2. Domestic content requirement: As the software is a domestically produced in China, requiring it in imported products would amount to a domestic content requirement in violation of TRIMS.

One interesting thing among these candidates is that several of them are "insiders". Hector and Peter have both worked in the AB Secretariat, while Pieter-Jan is the former director of the LAD. It would be interesting to see whether "WTO insiders" would bring something new to the AB's jurisprudence.

Thanks for the interesting post, Simon. Just an update from this side of the world: Vice Minister Jiang Zengwei of China’s MOFCOM yesterday announced that China will not be adopting a “Buy China” policy. Here are some of the sound bites from Mr. Jiang: 'We just need to boost consumption, whether it's through domestically made goods or foreign-made goods. Why should one be protectionist under the current circumstances? 'As long as there's demand, we'll treat domestic and foreign products the same way.' As Mr Jiang made plain: 'Even in the age of globalisation, no one country can satisfy its own markets from its own production.' China makes 80 per cent of the goods sold domestically, he noted, but it still needs to import products ranging from raw materials to agricultural goods and luxury items. More details can be found at http://www.straitstimes.com/vgn-ext-templating/v/index.jsp?vgnextoid=375750bb97b5f110VgnVCM100000430a0a0aRCRD&vgnextchannel=f511758920e39010VgnVCM1000000a35010aRCRD.

Interesting Post, Simon. I also agree with you that freedom of speech is not a fundamental trade principle. To play devil’s advocate, I think one argument can be used by Google and other non-Chinese providers is that, as Baidu’s contents are in Chinese, they are easier to monitor by the net-police in China and the Chinese government will only ban certain terms/results rather than banning the whole website outright. As the non-Chinese websites are primarily in English, however, the net-police find it very difficult to tell if a website contains politically incorrect info or not due to their low language proficiencies. Thus, they would rather choose to close down the whole website. That explains why Google and Blogspot have been blocked several times in China, while Baidu and Bokee (the Chinese counterpart of Blogspot) have not been subject to the same treatment. Interesting Post, Simon. I also agree with you that freedom of speech is not a fundamental trade principle. To play devil’s advocate, I think one argument can be used by Google and other non-Chinese providers is that, as Baidu’s contents are in Chinese, they are easier to monitor by the net-police in China and the Chinese government will only ban certain terms/results rather than banning the whole website outright. As the non-Chinese websites are primarily in English, however, the net-police find it very difficult to tell if a website contains politically incorrect info or not due to their low language proficiencies. Thus, they would rather choose to close down the whole website. That explains why Google (the non-Chinese international version) and Blogspot have been blocked several times in China, while Baidu and Bokee (the Chinese counterpart of Blogspot) have not been subject to the same treatment. If Google ever wants to make a claim on non-discrimination, this is where their argument could lie: it’s a selective censorship based on origin/language, rather than a universal censorship based on the content. To draw an imperfect analogy, this is like requiring all watches and clocks sold in China to have displays in Chinese or Arabic numerals, with those in Roman numerals banned. Another two potentially relevant issues are 1, whether services supplied in different languages are “like services” and 2, to a lesser extent, the technological neutrality nature of the GATS.

Thanks Julia. Yes the rights/obligations distinction could be tricky. I agree the only possible use of the distinction is in allocating the burden of proof, like the jurisprudence of the AB on the enabling clause. It would be interesting to see how the AB treats the protocol of accession.

Thanks Julia. While I agree with your conclusion, I have a slightly different view on the rights/obligations distinction. I don’t think the protocol’s obligations are only those of China’s. The analogy is to the ADA. Even though members have the right to take AD actions, they also have the obligations under the ADA to conduct proper investigations. Another interesting point you raised is "You may view that as China's "right" under the Protocol to ensure that there is a limit on the right of other Members, or as other Members' "obligation" to comply with the conditions. But such rights/obligations are at a different level from those provided by the Protocol." I wonder whether you may elaborate on how such rights/obligations are at a different level than the ones provided by the Protocol? I guess it is probably not on the enforceability in the WTO DSS as you also agree that “China may sue a Member for misusing or abusing that right, or failing to meet the conditions.” Do you mean these rights/obligations are of a lower hierarchy than the obligations imposed on China?

Thanks for the comment Jalal. While the Panel ruled that China’s accession commitments are enforceable in WTO DS in the auto parts case (I’m not sure that the AB confirmed this as the parties did not raise this issue on appeal and thus the AB did not rule on this), I think there's an important difference between the auto parts case and the subsidy case. The commitment in para 93 of the WPR is a commitment undertaken by China, so of course it is enforceable against China. However, the commitments in Section 15 of the AP do not tell China what it may or may not do. Instead it is a provision about what other countries may do in their AD and CVD investigations against China. Do other WTO members also undertake commitments as a result of China’s accession commitments? Is such commitment enforceable against them, rather than China, as well? That is a very different and more difficult legal question than the (much easier) question in the auto parts case.

Hi Simon, That puzzles me as well. I guess one explanation is that as they have already done so much work on the case (look at the list of local regulations attached to the consultation request. It's not easy to find these even for a native Chinese speaker.), they don't want Obama to steal the glamor? What are your thoughts? Best Henry

Thanks for the comprehensive analysis Sungjoon. I didn't know you were the author of the amicus brief! I fully agree with you on the implementation point. Indeed as the AB deliberately avoided ruling on the tariff issue, China could simply re-design the regulations and make the charge a tariff to comply with DSB ruling. Then the complainants would have to re-litigate the case again (I'm not sure if this issue could be tackled by an Art 21.5 panel)!