CHINA’S EXPERIENCE IN DEALING WITH WTO DISPUTE RESOLUTION AND LESSONS FOR VIETNAM

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 ACKNOWLEDGEMENT .2 LIST OF ABBREVIATION LIST OF TABLE .6 LIST OF FIGURE LIST OF DIAGRAM LIST OF MAP INTRODUCTION CHAPTER 1: MECHANISM OF DISPUTE RESOLUTION IN WTO 1.1 Definition of Dispute resolution 1.2 Procedure of Dispute Settlement Mechanism 1.2.1 Procedure of Dispute Settlement Mechanism 1.2.2 WTO Dispute Mechanism with the participation of third party 15 1.3 Overview of WTO dispute settlement mechanism 19 CHAPTER 2: CHINA’S EXPERIENCES IN DEALING WITH DISPUTE RESOLUTION UNDER WTO 24 2.1 Overview about China’s economy and policy 24 2.1.1 China’s economy and policy 24 2.1.2 Overview of China in dispute resolution under WTO 27 2.2 China’s experience in dealing with WTO dispute resolution as a complaint 29 2.2.1 China’s experience in dealing with WTO dispute resolution as a complaint in “Acceptance” period 29 2.2.2 China’s experience in dealing with WTO dispute resolution as a complaint in “Consolidation” period 31 2.2.3 China’s experience in dealing with WTO dispute resolution as a complaint in “Activation” period 34 2.3 China’s experience in dealing with WTO dispute resolution as a respondence 37 2.3.1 China’s experience when being the respondence during the “Acceptance” period 37 2.3.2 China’s experience when being the respondence during the “Consolidation” period and “Activation” period 39 2.4 China’s experience in dealing with WTO dispute resolution as a third party 42 2.5 Experiences from China in dealing with WTO dispute resolution 45 2.5.1 China’s characteristics in dealing with WTO dispute resolution 45 2.5.2 Experiences from China in dealing with WTO dispute resolution 48 CHAPTER 3: LESSONS FOR VIETNAM IN DEALING WITH WTO DISPUTE RESOLUTION 50 3.1 Overview about Vietnam’s economy after WTO accession 50 3.2 Vietnam participates in WTO dispute resolution 51 3.2.1.Vietnam in dealing with WTO dispute resolution as complaint .52 3.2.2 Vietnam in dealing with WTO dispute resolution as a respondence .56 3.2.3 Vietnam in dealing with WTO dispute resolution as a third party 58 3.3 Advantages and challenges of Vietnam in WTO disputes resolution after WTO accession 59 3.3.1 Advantages 59 3.3.2 Challenges 60 3.4 Lessons for Vietnam when joining WTO Dispute Resolution .60 CONCLUSION 67 LIST OF REFERENCES 70 APPENDIX 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 Number 10 11 12 13 LIST OF TABLE Table 1.1: Leadtime for processing a dispute Table 2.1: China: Structure of the Economy 2017 Table 2.2: China economy data, 2017 Table 3.1: Vietnam economy data, 2018 ……….……………………………….50 Table 3.2: Vietnam participates in WTO dispute settlement as a complaint Table 3.3: 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 20 Map 2.1: China involving in WTO dispute settlement 28 Map 3.1: Vietnam participates in WTO disputes settlement 52 INTRODUCTION Overview World Trade Organization (WTO) was officially established after the date of January st 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 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 16/04/2018 17/04/2018 3-7/05/ 2018 10/5/2018 17/05/2018 18/05/2018 20/05/2018 29/05/2018 04-05/06/ 2018 7/6/2018 15/06/2018 16/06/2018 6/7/2018 10/7/2018 2/8/2018 78 3/8/2018 7/8/2018 14/08/2018 22-23/08/ 2018 23/08/2018 6/9/2018 7/9/2018 12/9/2018 17/09/2018 18/09/2018 22/09/2018 24/09/2018 80 from January 1, 2019 25/10/2018 The US and China officially resumed contact, preparing for the meeting on the sidelines of the G20 Conference The US announced it would be prepared to announce a list of tariffs on all remaining Chinese 30/10/2018 goods worth US $ 257 billion at the beginning of December 2018 if the G20 sideline meeting failed to progress The United States and China reached a "commercial truce", agreed not to impose new tariff measures within 90 days, until March 1, 2019; and the two sides will negotiate to reach a common trade agreement 2/12/2018 The United States will postpone the List tax increase plan from 10% to 25% expected to apply on January 1, 2019, and not impose new taxes on US $ 267 billion of goods from China In return, China will buy more goods from the US, especially agricultural and energy products 81 APPENDIX 03: VIETNAM INVOLVING IN WTO DISPUTE SETTLEMENT Dispute No Number DS343 DS360 DS 375 DS 376 DS 377 DS399 DS402 DS405 DS414 10 DS422 11 DS430 12 DS431 13 DS432 82 14 DS433 15 DS437 16 DS449 17 DS464 18 DS471 19 DS474 20 DS484 21 DS490 22 DS504 23 DS508 24 DS509 25 DS511 26 DS517 27 DS518 28 DS529 29 DS533 30 DS534 31 DS545 32 DS546 ... from China in dealing with WTO dispute resolution 45 2.5.1 China’s characteristics in dealing with WTO dispute resolution 45 2.5.2 Experiences from China in dealing with WTO dispute resolution. .. dispute resolution under WTO 27 2.2 China’s experience in dealing with WTO dispute resolution as a complaint 29 2.2.1 China’s experience in dealing with WTO dispute resolution as a complaint in. .. 3.2.1 .Vietnam in dealing with WTO dispute resolution as complaint .52 3.2.2 Vietnam in dealing with WTO dispute resolution as a respondence .56 3.2.3 Vietnam in dealing with WTO dispute resolution