China expressed concern over an unprecedented "existential crisis" confronting the World Trade Organization and has submitted a proposal on WTO reform, according to the Ministry of Commerce on Tuesday.
The proposal was submitted by China's delegation to the General Council of the WTO in Geneva on Monday.
According to the documents released on the ministry's website, China said rising unilateralist and protectionist practices could lead to an "existential crisis" at the WTO and sabotage multilateralism and the free trade system.
The abuse of using national security as an exception, unilateral measures inconsistent with WTO rules, as well as misuse or abuse of existing trade remedy measures have severely damaged the rules-based, free and open international trade order, it said.
The document said such practices have adversely affected the interests of WTO members, especially developing-nation members, and undermined the authority and efficacy of the WTO. As a consequence, the organization is facing an unprecedented crisis.
China suggested necessary reforms of the WTO be made so as to overcome the crisis, strengthen its authority and efficacy, and enlarge its relevance in terms of global economic governance. It also proposed strengthening the inclusiveness of the multilateral trading system, said an official with the Department of WTO Affairs at the Ministry of Commerce, in an online statement late on Tuesday.
The unnamed official stressed the need to resolve several urgent issues threatening the existence of free trade and globalization.
Even though China didn't mention the United States by name in the proposal, it referred to a number of policies clearly associated with Washington. Experts stressed that the WTO is for the benefit of the public, not a tool for particular members. If its members cannot reform the architecture and resolve the key issues, they may all end up in various regional groups.
"Many bilateral tensions or challenges countries are facing today require a multilateral response, and WTO reform is definitely needed, especially in the areas of trade and investment," said Xue Rongjiu, deputy director of the Beijing-based China Society for WTO Studies.
Chen Fengying, a senior economics researcher at the China Institutes of Contemporary International Relations, said the U.S. government seems to have made driving WTO reform its priority so that the country can claim the high ground in global trade and lead the process for making new rules and establishing a new global trading system.
This move poses a challenge to the WTO and its basic principles including that of most favored nation status and national treatment, she said.
She added that if the U.S. gets its way on WTO policy as part of reforms, the WTO system will suffer a mortal blow.