Japan to drag China to the WTO Court!

Japan, like many of China’s other trading partners is peeved by China’s insistence of only buying from companies that have “indigenous innovation”. It is considering going into negotiation with China to trash out the issue, but in case it fails, then Japan would want the option to drag its erstwhile partner to the WTO Court in Geneva. However, like everything China does, there have so far been no clarifications of what constitutes as indigenous innovation. At issue is China’s government procurement of product and services which according to a report reached 90 billion dollars a year, and China’s insistence of foreign suppliers to register their intellectual property in China and also to have at least one of the inventors a Chinese citizen. Most suppliers see it as China unjust shifting its goal post and creating trade barriers in a time of economic uncertainties.

In reality, it is not only China that has created trade barriers, but almost every country has some sort of wall created. Take the case of the US. It is reported that the US is seriously taking up the suggestion by Nobel Laureate Paul Krugman’s call to put a twenty percent tariff on all Chinese imports besides the imposition of tax on Chinese steel products. So have Japan’s barrier to rice imports and the EU’s slapping of tax on Chinese nuts and bolts. China could have remained silent on the issue of state procurements but instead choose to make it known. Perhaps, it is China’s way of diverting Washington’s attention away from its insistence of China revaluing upwards its currency? Or maybe China is preparing to face the consequence of withdrawing its economic stimulus? But seriously, what can Japan achieve if it succeeds in bringing China to the WTO Court? It might loose more than it can gain!