improved, including historical sediment, experience in handling complaints, talent
team, professional reserves, etc.; China still had a long way to go before reaching
the level of the EU.
Second, the EU exercised a certain amount of temperance towards China during
thefive-year transition period,^17 during which the EU supervised China’s fulfill-
ment of its WTO commitments mainly through a transitional review mechanism so
as to ensure, and even help, China’s smooth integration into the multilateral trade
system and world economy. The EU shifted to the dispute settlement mechanism
after the transition period.
Third, unlike the litigious USA, China and the EU tended more towards con-
structively settling trade disputes through bilateral negotiations. Both sides
expressed this view many times in trade policy reviews. Therefore, the highly
capable EU was less motivated tofile complaints against China and mainly got
involved in joint complaints.
With overall interaction among the above objective and subjective factors, at
present, basically the two sides are mutually on the offensive and defensive and
China is mainly on the defensive under the dispute settlement mechanism.
6.3 Review of the Other Side’s Trade Policy and Practice
China and the EU have undergone four regular reviews respectively according to
the trade policy review rules specified in WTO Agreements^18 since 2003 (see
Table6.2). Both sides have attached great importance to using this mechanism to
express their own concerns and make judgments about bilateral relations.
6.3.1 Review of China’s Trade Policy
China’s total import and export trade was ranked No. 6 in the world in the year
when China acceded to the WTO; thefirst regular review took place in April, 2006.
(^17) So did the USA.
(^18) The trade policy review mechanism, the trade negotiation mechanism and the trade dispute
settlement mechanism are three major WTO mechanisms, which are designed to conduct regular
collective reviews and evaluations of trade policies and practice of the WTO members and their
impact on the multilateral trade system, so as to encourage all members to better abide by the rules,
discipline and commitments specified in multilateral trade agreements and applicable plurilateral
agreements. In practice, review is not limited to the tradefield and is extended to other economic
fields even including macroeconomic policy, economic development policy, etc. According to this
mechanism, the top four members in terms of the proportion of total import and export trade in
world trade are subject to biennial review, while the following 16 members are subject to a
quadrennial review and the remaining members are subject to one review every six years (a longer
period may be arranged for least developed members).
6 China-EU Relations in the Context of Global Trade Governance 129