China’s reaction to the Us’ new Custom Duty Policy: the WTO Dispute Settlement 543. The worsening of China-Us trade relations and the non-compliance with the WTO standards.

Abstract

This work analyzes the inconsistency of the new Custom Duty Policy adopted by the Trump administration from 2018 on import of goods from China and the consequential Dispute Settlement 543 filed by China against the Us. As a matter of fact, the issuing of additional custom duties on certain products imported from a specific country is a violation of the WTO “trade without discrimination” principle, and both China and the Us are WTO members. Before discussing specifically this dispute, an overview on China’s behavioral change towards international litigations is provided, in order to understand the transformations that led China to ask for consultations to the WTO Dispute Settlement System. Soon after its entrance in the WTO, China was quite reluctant towards international litigations and international organizations’ mechanisms in general; nonetheless, after some years the country shifted its attitude and became a more active participant of the WTO Dispute Settlements. Another important precondition in this analysis is the historical background of China-Us bilateral relations; from a policy of engagement towards the Asian Pacific region and towards China in particular, the Us administrations moved to a protectionist policy that had negative consequences on bilateral and multilateral trade flows. Hence, we will deepen the China-Us Trade Unbalance and economic causes and consequences of custom duties, focusing on trade-related aspects of the Trade War. Finally, we will examine the legal implications of China’s accession to the WTO and the Dispute Settlement 543 with the Us. After a revision of the Chinese judiciary according to the WTO standards, the Chinese law rectified its inconsistencies with the WTO; however, a Us policy that did not meet the WTO standards led China to ask for consultations to the WTO. The final assertion of this thesis is the ongoing crisis of the WTO authority as international organization regulating multilateral trade.