WASHINGTON DC – United States Trade Representative Susan
C. Schwab announced today that China has agreed to eliminate discriminatory
restrictions on how U.S. and
other foreign suppliers of financial information services do business in
China, which the
United
States had challenged in a World Trade
Organization (WTO) dispute brought earlier this year.
“I am very pleased we have been able to sign an agreement
with China today to allow
financial information suppliers like Bloomberg, Dow Jones and Thomson Reuters to
operate in China free of unfair restrictions
that threatened to place them at a serious competitive disadvantage,” said
Ambassador Schwab. “China’s commitment to establish an
independent regulator in this sector is especially important. The
independence of the regulator is critical to ensuring a legal environment that
is free of damaging potential conflicts of interest.”
“We had attempted to resolve this issue with
China through dialogue, but when that
did not succeed, we took swift action at the WTO.” Schwab explained. “We
are pleased that the WTO dispute settlement mechanism has worked as intended,
enabling the parties to reach a satisfactory resolution.”
“This outcome is particularly significant in these
volatile financial times. It shows that the WTO and the rules of the
multilateral trading system are successfully resolving major international trade
problems. Removing these barriers not only gives our companies a level
playing field, it also gives actors in China access to the high-quality,
comprehensive and timely financial information from multiple sources needed to
make effective business decisions,” Schwab added.
The United
States and China signed a memorandum of understanding (MOU)
today that is designed to resolve a WTO case initiated by the
United
States and the European Communities (EC) in
March of this year. Canada later initiated its own case
in June. The EC and Canada also signed MOUs with China
today.
China’s
commitments under the MOU address all the issues under the General Agreement on
Trade in Services (GATS) and China’s WTO Accession Protocol that the
United
States had raised at the WTO.
China will:
• designate an independent regulator that will have no
conflicts of interest with the companies it is regulating and will use a fair
and transparent approach to licensing, as required under China’s WTO Protocol
obligations. This is critical to providing a level playing field for our
businesses in China;
• eliminate the requirement that U.S. companies
must use an agent to do business, allowing them to make their own independent
business decisions on how they want to structure their
operations;
• limit the regulator to requesting information from
financial information suppliers only if that information is relevant to the
regulatory function, ensure the confidentiality of that information, and protect
against its misuse;
• confirm the rights of U.S. companies to set up local operations in
China; and
• treat U.S. companies at least as well as it
treats Chinese companies, as required by GATS rules.
• In addition, as China develops new legal measures to implement
its MOU commitments, the United States will have the right to
comment on the proposed measures.
The United
States and the EC initiated this dispute at the WTO by
requesting consultations with China on March 3, 2008, and the parties held
joint consultations in Geneva on April 22 and 23, 2008.
Canada initiated its dispute at the
WTO by requesting consultations on June 20, 2008.
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