By Zhao Wei
The revisions to the Foreign Trade Law were passed on April 6 at
the 8th meeting of the 10th National People's Congress (NPC)
Standing Committee. Two years after China's accession to the World
Trade Organization (WTO), the amendments to the decade-old law were
essential.
Since the original Foreign Trade Law was promulgated on May 12,
1994, it has played a significant role in promoting China's foreign
trade development in a healthy and orderly way. However, with time
its inadequacies were exposed and the country's entry into the WTO
accelerated its obsolescence.
In order to fulfill its WTO commitments and duties, and fully
exercise its rights and benefits as a WTO member, China had to
amend the Foreign Trade Law. On December 22, 2003, the draft
amendments to the law were formally submitted to the NPC Standing
Committee for consideration and ratification.
The revised Foreign Trade Law includes 11 chapters and 70
clauses, three chapters and 26 clauses more than the original.
There were three main focuses to the amendments. First, any
content that was not in line with WTO rules was changed or deleted.
Material concerning implementation mechanisms and procedures
related to WTO was added. Finally, other changes necessary to
ensure the continued healthy development of foreign trade were
made.
Amendment highlights
For the first time, individuals are allowed to conduct foreign
trade. Under the old law this was forbidden, but legislators
recognize that it is a universal trend for individuals to conduct
foreign trade during technological trade, international service and
border trade activities. Furthermore, according to its WTO
commitments, China is required to provide all foreign individuals
and companies with treatment that is at least equal to that
afforded to their Chinese counterparts.
The requirement for administrative approval of foreign trade
operators engaged in goods or technology import and export has been
lifted. Therefore, the revised law states that all legally
registered foreign trade operators can now conduct goods and
technology import and export. The register serves only as a record
and listing on it does not require administrative approval.
Now, imports and exports may be restricted or prohibited under
certain conditions. The original law failed to address this issue
-- one that is necessary to safeguard China's economic interests
and which the WTO Pact allows. The new law specifies the conditions
under which such restrictions or prohibitions may be applied. The
addition of this section indicates that China intends to protect
national security and the public interest while simultaneously
developing foreign trade.
Intellectual property is an important component of foreign
trade, and protecting intellectual property rights (IPR) is a key
issue. A chapter on IPR protection is one of the major additions to
the Foreign Trade Law. The new section states that manufacturers or
sellers who import or export goods that violate IPR may be
suspended from doing business for a specified period. Overseas
trading partners that fail to provide adequate and effective IPR
protection may be subject to measures taken in response by the
authority responsible for foreign trade under the State
Council.
New sections have also been added to allow and provide guidance
for conducting investigations and seeking relief. The authority
responsible for foreign trade under the State Council is now
permitted, for example, to conduct investigations into the impact
of trade on domestic industries; trade barriers of other countries;
trade relief; and matters concerning national security related to
foreign trade. The law clearly defines investigative procedures, as
well as those for seeking relief.
The 54th clause in the new law requires the state to establish a
foreign trade public service system that will facilitate the
provision of information to the public. Although China has already
made significant progress in constructing a basic public databank,
an accompanying service system is lacking. This is an area that is
in urgent need of improvement.
Finally, the new law beefs up and clarifies enforcement
procedures. It regulates the setting up of early warning and
emergency systems and a foreign trade statistics system. While the
revision does address the issue of monopolies, because a new law
specifically on this subject is currently being drafted, the
Foreign Trade Law remains deliberately vague.
Zhao Wei is a professor from China Politics and Law
University.
(China.org.cn, translated by Wang Qian, April 16, 2004)