The Application of WTO Law in China
(Jiangyu Wang)

Introduction: Applying WTO and the Development of Rule of Law in China

For the world trading community, one of the most significant events in the year 2001 is China's entry into the World Trade Organization (WTO). Almost the whole world recognized that China's accession to the multilateral trade regime would have a far-reaching impact on both the national and global economies, as well as the future course of China. I don't want to repeat those lengthy words in Chinese and Western medias as to the importance of China's WTO bid. Some of them, I think, apparently overestimated the significance of the issue. Some others might even be a little bit exaggerative. But I do want to stress at least one aspect of the impact of the WTO accession to Chinese people's life. That is, implementing WTO agreements will almost certainly help the establishment of rule of law in China.

There are many definitions of rule of law, one of which, the most accepted one I think, is that a society in which law is what guides people and government in the conduct of their activities, rather than by the direction a single person. In any society, observance of the law has to become a habit. It has to be a part of the fabric of social relations. To do so, you need trust and faith in the people and the society. As a matter of fact, commerce is one of the primary means by which you build the bonds of common trust in society and a foundation for the rule of law.

Of course, as every one knows, the WTO is designed to promote continued progress in the development of the commercial rule of law in China. But this will also accelerate changes in the way China is governed, including in non-commercial areas. Most notably, many people believe that rule of law, spurred by the WTO, will eventually lead to greats respect for human rights and larger political liberalization in China.
Turning to rule of law of again, in a narrow sense, there are two basic elements of rule of one, namely, transparency and consistency. China's compliance with its WTO commitments will contribute significantly to realization of these elements. It is widely recognized that accession to the WTO will further the development of an impartial judiciary, neutral regulatory bodies, transparent legal process, and regularity in the administration of law in China.

For example, China is required to establish and maintain independent, fair judicial and administrative mechanisms to review trade-related disputes. Obviously, if established, it would be unlikely that the jurisdiction and capacity of those independent agencies to be confined to commercial areas. This will be bound to contribute to the development of a more open, market-oriented society. Furthermore, historical record shows that market economies are better at protecting human rights than non-market economies (using Mexico as an example). The conclusion of the chairman of United Stated Congressional-Executive Commission on China is that "human rights can only be protected when there is a rule-based legal system that includes transparency and accountability. Similarly, for all other rights, Chinese citizens need legal institutions and mechanisms through which they can enforce their constitutionally prescribed rights and others rights and protections established under law. Experience has shown that the development of the structural rule of law elements has contributed to the expansion of substantive rights and freedom in some political transitions, such as those experienced in South Korea and Taiwan.

So we already know the importance and significance of China's compliance with the WTO regime. The No.1 question then is, how has the WTO agreements been applied in China? This is a fundamental question because of some fundamental reasons. Firstly, the way WTO agreements is applied is directly linked to the effect of those agreements in domestic law. In this respect, the related questions include, inter alia, what is the WTO treaty's relationship with domestic law? Is it superior or inferior to domestic law? How are WTO agreements treated by domestic courts? Needless to say, this will definitely influence the rights and interests of companies of China's trading partners, as well as that of Chinese citizens. Secondly, the issue is important for China simply because the existing Chinese law does not give a clear and definite answer as to the effect of WTO treaty in domestic legal system, leaving certain important issues unresolved. Even worse, senior Chinese judicial officials (such as justice in the Supreme Court of China) and prominent legal scholars have given conflicting views regarding this issue. For example, Grand Justice Li Guoguang, who is also the Vice President of the Supreme Court, once said that Chinese courts should directly apply WTO rules to adjudicate relevant disputes. But another Grand Justice and Vice President of the Supreme Court, Mr. Cao Jianming, personally told me that there was no much chance for direct application of WTO law in China, in his visit to Philadelphia a year before. And the opinions of Chinese scholars also varied dramatically. So whom to listen? And what should be the correct answer for this question in light of the existing Chinese law, or if there is no such law in China, the spirit of Chinese law?

(* Footnote Omitted)