China Defend MFN in its WTO Reform Plan

[ABS News Service/15.09.2026]

Ahead of the next round of World Trade Organization reform meetings beginning September 20, China has put forward a comprehensive proposal outlining what it calls “a constructive approach” to exploring “ways to update the rules while upholding the WTO’s fundamental principles.”

The five-page proposal, “Further reflections and suggestions on WTO Reform” (WT/GC/Reform/W/12), reasserts what Beijing regards as the WTO’s core principles: “multilateralism, non-discrimination, predictability and transparency,” alongside the preservation of its basic institutional arrangements, including consensus-based decision-making, binding dispute settlement and special and differential treatment.

Without naming the United States, China warns against efforts by “some members” to make most-favored-nation treatment conditional. Such moves, it says, should be treated with “caution” because they risk reviving “power-based trade relations in the name of reciprocity.”

China also warns that “expanding exceptions to MFN treatment beyond those already provided for in the WTO agreements risks creating a fig leaf of protectionism.”

The same warning applies, Beijing says, to calls for “rebalancing rights and obligations” or “promoting reciprocity” when these are based on vague labels or predetermined outcomes rather than agreed rules.

The message is clear: WTO reform must update the rules without allowing powerful members to

rewrite them unilaterally, said a trade official, who asked not to be quoted.

On the “foundational issues” track, led by Malaysia’s trade envoy, Ambassador Sumathi Balakrishnan, China insists that “fundamental principles should not be compromised for the sake of expediency.”

“In reforming the WTO,” it urges members to “uphold a rules-based approach rather than a power-based one, advance shared interests rather than pursue zero-sum games, and ensure that reform outcome benefits all Members, particularly developing members.”

Beijing calls for concrete solutions to update WTO rules through the relevant reform tracks covering development, the level playing field and decision-making.

For China, the Development track “must remain at the front and centre of WTO reform.” Although China has given up its right to claim S&DT in current and future negotiations while retaining previous S&DT benefits from its accession agreements, it insists that S&DT remains vital for developing countries.

Otherwise, “developing Members, being left behind in the development process would represent a fundamental failure to achieve global fairness,” China argues.

Trade and Development

Trade, Beijing says, is “an important means for developing Members to advance structural economic transformation, integrate into global value chains and leverage their comparative advantages.” These considerations, it adds, “should inform the discussions of all tracks of WTO reform.”

China wants reform discussions to begin with the development opportunities and challenges identified by developing members as they integrate into the multilateral trading system.

It divides S&DT issues into “long-standing issues and emerging ones.” The former include the operation of S&DT provisions in individual agreements, technical assistance and capacity-building programmes. The latter encompass “the new dynamics that drive economic globalization of our time, such as artificial intelligence, digital trade and green transition.”

Yet China also acknowledges that economic globalization has not delivered its intended benefits to all members.

The proposal therefore calls for WTO “Reform” to address long-standing issues “from new perspectives” while approaching emerging issues through “a forward-looking and development-oriented lens.”

China brought its long-championed Investment Facilitation for Development Agreement into the Development track.

It points to “needs assessments” as an emerging tool in WTO negotiations involving the IFDA and the E-Commerce Agreement.

India has opposed incorporating the IFDA into Annex 4 of the plurilateral agreements, while several countries have opposed and not joined the ECA.

Development Tools

Against this backdrop, China suggests that “consideration could be given to mainstream such new development tools into WTO's technical assistance framework” to strengthen developing members’ negotiating capacity and domestic policymaking.

On S&DT, China calls for discussions aimed at making it “more precise, effective and operational.”

It rejects the “so-called criteria-based graduation approach to special and differential treatment” promoted by the US and EU, arguing that such an approach “oversimplifies the complexity and diversity of development needs across the WTO membership” and could divert attention from the real issues of development.

The most politically charged section concerns the “level playing field.”. Beijing said that a level playing field is essential for equitable participation in international trade and inclusive development. But China stresses that members have sharply different views on the “meaning, scope and purpose” of a level playing field. Those differences, it says, reflect both different challenges and different stages of development.

Hence, “WTO reform should promote equitable participation in trade and foster inclusive growth.”

China says it is ready for dialogue with other members and is open to exploring updates to the Agreement on Subsidies and Countervailing Measures, greater transparency and improved coordination on industrial policies.