The RMB Exchange Rate Issue Under The WTO Framework

The pressure of RMB’s appreciation increased suddenly after2009. The United States, as the majorone of the developed countries that call for the appreciation, has been aggressively pushed the RMBexchange rate policy as a measure into the WTO for settlement, in order to “offset” the tremendousexport products caused by the RMB’s devaluation. As the specific forum is the IMF, it is importantfor those countries to prove the legitimacy of WTO’s jurisdiction the transferring paths of forums.The first part introduces how the problem arises and where does it goes now. It then brings thatwhen facing the possibility of the RMB exchange rate under the WTO system, we could be lookedback to the experience of the IPR issue forum transferring from WIPO to WTO. Further, the similaritybetween the IPR issue and RMB exchange rate in competition course of international trade providesnecessary experience for the latter. Relating to China’s history and current situation, it is meaningfulto compare the two issues to explore the RMB exchange rate issue.The second part introduces the history that the IPR issue main forum transferring from WIPO toWTO due to WIPO’s ineffectiveness of enforcement. During the Uruguay Round negotiation of theGeneral Agreement on Tariffs and Trade, the Agreement on Trade-Related Aspects of IntellectualProperty Rights comes out, covering more intellectual property right types, higher minimum standardof protection, and new dispute settlement to solve IPR disputes.The third part compares the RMB exchange rate issue with the IPR issue, concentrating on thesimilarities of distributed governance between specific international organizations and WTO, andtrade effects of the two topics; and the differences of selection of forum, nature of issue, industriesand states affected, and decision making methods of specific international organizations. Through thecomparison it becomes clear to be aware of the generalities and particularities of the RMB exchangerate issue.The fourth part discusses the possibility of the RMB exchange rate issue governed by DisputeSettlement Body of WTO. It studied the IMF’s attitude towards exchange rate policy and WTO’sdiscussion of it. Therefore the United States could choose either domestic measure to imposeanti-dumping duty or countervailing duty, or WTO measure to bring the dispute to DSB. Forconclusion, China has already faced difficulty of two bad choices, but the latter one is less bad; theUnited States otherwise might choose to the former one, for its less cost and sooner effect.The fifth draws conclusion that the RMB exchange rate issue is the developed countries’ legalaction to protect their industries and economic status with China’s economy speeding in the pastdecades, especially the developed countries severely damaged after the crisis, which is exactly whatthe developed countries have done with IPR issue. As one of the most important developing countries,China is seriously threatened considering its biggest foreign exchange reserves. It is important to learn the lesson of the IPR issue, participate in the rule-oriented international organizations ruling to makethe rules.