context: United Nations Conference on Trade and Development defines 'behind-the-border measures' as non-tariff measures 'such as competition, trade-related investment measures, government procurement or distribution restrictions'. As tariffs are lowered, behind-the-border measures are becoming the next trade battleground.
Behind-the-border measures will have a bigger effect on China’s next steps in opening up than traditional border measures, says Ye Fujing 叶辅靖 National Development and Reform Commission Foreign Economic Research Institute director.
Ye notes a global shift of focus from border measures to behind-the-border measures
- negotiations over regional and multilateral trade treaties as well as bilateral FTAs are paying more attention to behind-the-border trade barriers
- in the US–China trade war, the US points out China’s many behind-the-border policies, particularly relating to IPR, cyber security, information security, advanced manufacturing and independent technological innovation; the US (and some EU countries) claims that China has failed to provide national treatment by not addressing these behind-the-border issues
These complaints should be put in perspective, says Ye, noting
- China is not alone in this; the US and European countries all have behind-the-border barriers to various degrees
- in many cases, China’s domestic enterprises also face such barriers
To reform behind-the-border measures, Ye suggests that China should
- make industrial policies more supportive on the supply side and more favourable to basic industries
- borrow from developed countries when drafting policies regarding compliance, competition, IPR, investment, customs clearance and government procurement
- deliver on its promise of financial opening up and address restrictive factors that affect the growth of foreign financial institutions in China
- replace ex ante approval with stricter interim and ex post supervision for the safety and environmental requirements of projects
- keep up with international standards for professional services, such as medical care, education, culture, architectural design and industrial design
- promote China’s practices and standards in fields where it leads globally, including cross-border e-commerce and mobile payments