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The PSSMs directed against China’s products are mainly contained in Article XVI of the Protocol on the Accession of the People''s Republic of China (Hereinafter referred to as the Accession Protocol) and Paragraphs242, 245 to 250 of the Report of the Working Party on the Accession of China (hereinafter referred to as the Working Party Report). According to Article XVI of the Accession Protocol, within the 12 years after China’s accession to the WTO, in cases where products of Chinese origin are being imported into the territory of any WTO Member in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products, the WTO Member so affected may request consultations with China with a view to seeking a mutually satisfactory solution, including whether the affected WTO Member should pursue application of a measure under the Agreement on Safeguards. If consultations do not lead to an agreement between China and the WTO Member concerned within 60 days of the receipt of a request for consultations, the WTO Member affected shall be free, in respect of such products, to withdraw concessions or otherwise to limit imports only to the extent necessary to prevent or remedy such market disruption. Paragraph 242 of the Working Party Report stipulates that a WTO member may restrict the import of textiles or textile products from China when imports of Chinese origin of textiles and apparel products cause market disruption and threaten to impede the orderly development of trade in these products. The application of the restrictive measures expires by December 31, 2008. Paragraphs 245 to 250 provide the procedure and rules for the application of PSSMs. Appendix 7 presents a list of products that the WTO members may adopt PSSMs against and what measures they can take.
II. The Nature and Features of PSSMs
I) The Nature of PSSMs
The provision of PSSMs violates the rule of non-discrimination of the WTO system and was adopted “under the circumstances where China had its will under strict limitation and coercion, therefore its declaration of will is defective.”(Han Xiuli, 2004a) Accordingly, PSSMs are as a matter of fact an unfair provision adopted by China under pressure and coercion to some extent and a set of discriminatory trade measures against the products from China. It is therefore “China-specific”, as even the Trade Representative of the United States admitted.It should be pointed out, however, that the acceptance of the provision was also a strategic option that China made in the process of trade negotiations in exchange for the concessions of other WTO members in other fields, like the intellectual property rights, where China met strong setbacks, and a result of combining strategic advancement and tactical compromise in tackling the balance of its trade conflicts with other trading countries.
II) Features of PSSMs
1. The application of the PSSMs is selective and discriminatory. In sharp contrast with the principle of non-discrimination of safeguards, the application of PSSMs features strong discrimination against China. The safeguards are the embodiment of the principle of change of circumstances applying to all the WTO members and are “a safety valve ensuring domestic economic security of the WTO members and trade liberalization”. (Cai Fang, 2004) The safeguards conform to and are themselves part of the set of WTO rules, thus are lawful and non-discriminatory. The PSSMs, however, were designed only to aim at the products originating in China. Any WTO member can initiate the application of limits to the import of Chinese products if it can show that the import has caused the existence or threat of market disruption. Worse than that, against what products and when PSSMs will be adopted are purely at the discretion of the importing country, thus it has a feature of selection and discrimination.
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