Wednesday, May 11, 2016

The 15-year hitch - A pact from 2001 stirs trouble between China and the West, and between America and Europe

FOR China’s leaders it is as if, having signed a postdated cheque in their country’s favour, Western countries are threatening not to honour it. Their excuses—that the cheque was only ever provisional, that their domestic politics make it impossible and that times have changed anyway—serve only to confirm the impression of defaulters wriggling off the hook. So when, as seems likely, not all the world’s big economies grant China “market-economy status” by the 15th anniversary of its accession to the World Trade Organisation in late 2001, China will cry foul and an almighty row will ensue. China will probably take the dispute to the WTO for settlement. This does not mean it is in the right.

China argues that geopolitical and domestic economic considerations are clouding a clear legal obligation. It may also sense an opportunity: to divide the China policies of the West’s two most important components, America and the European Union. More than a decade ago, it gave up hope that it might persuade the EU to lift the embargo on arms sales to China imposed after the Tiananmen killings of 1989. American disapproval put the kibosh on that. Now, however, it may, to American dismay, win “market” status unilaterally from Europe.

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