The choice of strategic trade policy in China under the WTO frame
61 markets portion; (3) Entrance Being Protected with the policy of encourage export, it is look on entrance protection as the means of promoting export, and participate in international competition ultimately.
1.2.2 Outside economy effect theory
The external economy effect theory take external economies of scale as the basis, refers to the merchant (individual, society) can obtain the advantageous influence from some kind of social economy activity, but in principle they do not need to pay expenses for this. This kind of advantageous influence originates from the technical external effect and the fund or the market scale exterior effect. In the industry of the external economy effect, because cannot completely hold it to carry on the income the merchant which the knowledge investment brings, therefore it is often not willing to carry on many excessive investment to undertake the risk “the technical overflow” produces. This requests government give suitable protection and the support to these industries, it makes the overflow and the diffusion of technical superiority maintain at the domestic, and guide industry gathers through the policy simultaneously, in order to display the linkage effect which middle and the specific investing product produces, thus causes the external economy effect completely at the industrial interior display function, creates the huge scale income, and enhances industrial the international competition strength.
The external economy effect theory highlights occupying to, it regards the comparison superiority in traditional trade as artificial “mold” coming out, causing the trade pattern fill the no determinism, any historical, accidental event or government’s policy can cause the trade pattern to have the change. If a state government can formulate the effective strategy wisely, it can rob the vantage point in the economical development, and establish the long-time competitive advantage. In the history some countries lack of the natural endowment, like Japan, South Korea, all exploit later advantage, promote the domestic industry development and promotion through the formulation industry fostering and the protection policy.
2. Strategic trade policy essence and suitable condition
Strategic trade policy essence is that expands the competitive and benefit main body in marketplace economic system from enterprise to the country, promotes enterprise competition to country competition, rises the enterprise competition tactics to country economic policy, deals with incomplete competition in internationalization management and scale economy effect by virtue of the strength from the government and common financial resources of country. Kelugeman once pointed out, strategic trade policy doesn’t mainly apply to the developing country as the administration policy to the high-tech industries development. Because economic development level and primary capability of independent innovation decide industrial policy and trade policy, and the basic point on foundation and localization that the strategic trade policy forms is in the developed country with strong technological innovation ability and international competitiveness of high-tech industries. Because of monopolistic competition and the oligopoly are rare in the structure of market of developing countries, scale economy being not applied sufficiently, marketplace economic system being also not yet perfect and mature, therefore it does not still have the basis of putting strategy trade policy into practice and earning profit in the main.
In fact, the strategic trade policy is only the symbol that the protectionism of the developed country resumes, being that the developed country looks for theoretical foundation and excuse for their trade protect, it’s being similar to the immature industry protection applied to the developing country commonly, do not having a great differences in essence.
3. Conflict between strategic trade policy and WTO regulation
The base of WTO/GATT is to accelerate the liberalization of trade. As the continuity and developing of GATT, the World Trade Organization, which was founded in 1995, emphasized the function of GATT, including the framework of organization, the dispute mechanism and the legal status. Since the foundation, the WTO has got great success on the sensitive commodity negotiation such as agricultural product, textile goods and so on. The WTO has reached encouraging results in the rights of intellectual property, the investment connected with trade and the open of the service trade. The WTO has absorbed a lot of countries entering into the multilateral trading system including China. All of the above are the behaviors of the further depth of the liberalization of trade.
4. The space of strategic trade policy
WTO advocates free trade, but the WTO is not an absolute free trade platform. Under the premise of safeguarding the principle of free trade, based on the recognition of differences in national interests, Multilateral trading system also allows the implementation of trade policies, especially in many developing countries are given preferential treatment. To some of the specific agreements, the WTO lacks of effective supervision and punishment mechanism. In addition, due to the WTO’s jurisdiction failure to cover a country’s domestic policies, these indirectly related to trade and domestic policies become a powerful tool for trade protection.
4.1 The recognition of WTO (GATT) negotiations and agreements in national interests
The basic principles of WTO is to promote trade liberalization，but we can not say that the WTO is to achieve trade liberalization and the establishment of the organization, WTO’s ultimate goal is to promote the economic development of all member countries, which had already clearly pointed out in the “establishment of the WTO agreement”. The WTO (GATT) negotiations and agreements in various stages of the World Trade Organization reflect the interests of all member states agree.
4.2 The exception clauses of WTO
WTO agreements and arrangements contain exceptions. Broadly speaking, “escape clause” means. In a trade agreement to allow member states under specific circumstances, withdraw or reduce or stop fulfilling the normal obligations of the agreement, more important to protect the interests. This exception is a kind of insurance, plays the role of safety valve.
4.2.1 The exception clauses applying to all members
WTO (GATT) can be divided into two exceptions: The first occurred in the trading in advance of a series of matches protection, Use corresponding security measures; the second refers to the WTO general obligations of permanent exceptions. The WTO allows exceptions to the terms of the obligation to terminate provisional anti-dumping, countervailing, balance of payments, emergency protection and immunity.
WTO rules on exceptions to the general provisions concerns the general obligations of permanent exceptions, national security exception, and renegotiation of tariffs.
4.2.2 The special discount arrange on the developing country
The WTO draws up many escape clauses on the developing country, These escape clause main reflect in five aspects: the first, lower level obligation; the second, more vivid implement timetable; the third, the developed country tries its best to open its goods and service market to the developing country; the fourth, the more special treatment to the least developing country; the fifth, provide the technique helps and manpower capital training.
The choice of strategic trade policy in China under the WTO frame
63 The first and second aspects are the main special treatment arrange to the developing country.
4.3 WTO has trouble on valid supervision and punishment in time to some behavior infringing the rule Because of everyone’s comprehension difference and the indetermination of trade behavior, WTO have trouble to do valid supervision and punishment in time to some behavior infringing the rule. This performance is very outstanding at “technique trade barrier agreement”, “service trade total agreement” and “intelligent property right agreement with trade”. Many countries all according to ones of circumstance, draw up various technique standards and the environment standards, lend of the free trade to go protectionism of solid, evade WTO stipulation.
In addition, some disputes solving mechanism of WTO need a longer movement period and complicated procedure, this is detrimental for WTO to make quick reaction towards behavior violating the rules.
5. Policy options of China
Because of the variety of strategic trade policy and less constrain of the rules of WTO, strategic trade policy have broad prospects at large extent.
(1) Increase the effective protection rate of tariff.
(2) Meet the anti-dumping investigation initiatively and strengthen the anti-dumping measures.
(3) Let government purchase play a promoting role in the strategic industry.
(4) Make use of subsidies.
(5) Use national laws to protect domestic industries.
(6) The adjustment of the tax preferential policies.
(7) Use the technical trade barriers to ease the impact of imports.
References:
Babcock, B. & Hart, C. (2005). Judging the performance of the 2002 Farm Bill. Iowa Ag Review 11, 1-5.
Hertel, T. W. & Winters, L. A. (Eds.). (2006). Poverty and the WTO: Impacts of the Doha development agenda. New York:
Palgrave-Macmillan.
Lee, D. S. & Kennedy, P. L. (2006). A political economic analysis of US programs to Japan and South Korea: A game theoretic approach. American Journal of Agricultural Economics, 88(2), 420-431.
WTO committeetalks resume: An negotiating meets for first time since September 11. (2007). BRIDGES Weekly Trade News Digest.
(Edited by Emily and Ann)
Dear author,
China-USA Business Review and Chinese Business Review are professional journals sponsored by USA-China Entrepreneur Associates, and published across the United States by David Publishing Company, Chicago, IL, USA. In China, the journals are regularly issued by China National Publication Import & Export Corporation on commission.
China-USA Business Review and Chinese Business Review are collected and indexed by the Library of U.S Congress, on whose official website (http://catalog.loc.gov) an on-line inquiry can be triggered with their publication numbers, ISSN1537-1514 and ISSN1537-1506 respectively, as key words in “Basic Search” column.
In addition, both journals are retrieved by some renowned databases:
♦ Database of EBSCO, Massachusetts, USA
♦ Chinese Database of CEPS, American Federal Computer Library Center (OCLC), USA
♦ Chinese Scientific Journals Database, VIP Corporation, Chongqing, China
Current columns include: Economic Research, Management Theory and Practice, Experts Forum, Macro or Micro Analysis, Economic Researches on Theory and Practice, Finance and Finance Management, Strategic Management and Human Resource Management. From 2001 to 2008, experts and scholars, as famous as Prof.
GUO Guo-qing, Renmin University of China, Prof. HUANG Pei, Shanghai Jiaotong University, Prof. ZHAO Zhen-hua, Central Party School of C.P.C, Prof. LI Yuan, Xi’an Jiaotong University, delivered their research achievements on the journals. All the published papers can be browsed on our website (http://www.davidpublishing.com).
David Publishing Company is strived to provide the best platform for researchers and scholars worldwide to exchange their latest findings and results. We admire your achievements, and we understand how important your research impact to other peers in the same interest field and other disciplines, and how delighted you would be when communicating with global professional peers. Your contribution to our journals would be greatly appreciated!
Requirements:
(1) Paper must be empirical or theoretical contributions without being published previously;
(2) All other scholars’ words or remarks as well as their origins must be indicated if quoted;
(3) English title, abstract and key words should be prerequisite;
(4) Paper would contain no more than 3500 words except for excellent ones;
(5) Patterns or forms should conform to the standard listed on our website;
(6) Automatic paper submission system is strongly recommended, while email attachment sent through email at [email protected] is still available.
Please visit our website (http://www.davidpublishing.com) for our automatic paper submission systems.
Should you have any questions or concerns feel free to contact us.
Best regards, Editor Office
China-USA Business Review and Chinese Business Review David Publishing Company