The U.S. Trade Representative is responsible for presenting an annual report to Congress regarding the progress China is making in complying with its WTO accession commitments.

This annual report, which will be presented to Congress and the public in early December, describes China’s implementation of specific WTO accession commitments.  Among these commitments are:  Tariff reductions, the removal of non-tariff barriers, agriculture, intellectual property rights enforcement, and the issuance of regulations to increase market access for foreign firms in a variety of services and distribution sectors.  

As part of the report process, the USTR placed a Federal Register Notice requesting comment and testimony from private sector and non-governmental organization on the status of China’s WTO compliance.  A hearing was held on October 3, 2003.  Testimony was taken from the U.S. Chamber of Commerce, the National Association of Manufacturers, the International Intellectual Property Alliance, and several other business interest groups, whose members are doing business in China.

Although the hearing was limited to China’s WTO compliance, many of the comments are relevant to the general issues that small businesses face in entering the China market. 

The consensus was that China is opening its market and is providing opportunities to U.S. firms that were not present before the accession process.  Chinese consumers and corporations are beginning to have the resources to purchase U.S. products and the demand for U.S. goods is rising.  The testimonies all indicated that China has made progress in changing thousands of its laws to create a better environment for foreign businesses to succeed in China.  All agreed that U.S. exports to China have grown as a result of China’s accession.

However, many concerns were expressed with regard to the commitments China made to improve protection of Intellectual Property Rights, transfer of technology requirements, the publication and clarity of administrative rules and procedures regarding customs, the value of the Chinese Yuan and China’s rebate of its value added tax.  All of these concerns have been expressed by various U.S. small businesses.