Leading administration officials have referred to the WTO's "Abject failure to address emerging problems caused by unfair practices from countries like China"1 and its "Inability to resolve disputes, limit subsidies or draw China into the market status that was envisioned when China joined the WTO"2; and they have declared that the WTO "Is not equipped to deal with [the China] problem."3 Since Trump became president, the United States has pursued only one new WTO complaint against China.
According to the U.S. Trade Representative's Office, in a report issued in January of 2018, "The notion that our problems with China can be solved by bringing more cases at the WTO alone is naïve at best, and at its worst distracts policymakers from facing the gravity of the challenge presented by China's non-market policies."4 A recent report by the USTR has gone so far as to call China's entry into the WTO in 2001 under the terms adopted at that time a mistake.
While it is true that China's rise poses a unique challenge to the WTO-based world trading system, and there are limits to what can be done to counter China's mercantilist and protectionist practices under existing WTO rules through dispute settlement, this paper makes the case that WTO dispute settlement has considerably more potential than the Trump administration thinks, and it offers, over the long term, a far more effective means of responding to protectionist Chinese trade policies than the current Trump policy of applying illegal unilateral tariffs on billions of dollars' worth of Chinese products entering the U.S. market-and threatening hundreds of billions more.
As Mark Wu, despite his reservations about the efficacy of WTO dispute settlement with respect to China, has acknowledged, thus far the WTO "Has served its purpose effectively as a forum to enforce China's trade obligations. On the numerous occasions when the WTO has ruled against China, the Chinese government has willingly complied with the judgment and usually altered its laws or regulations to comply with WTO rules."11.
China cannot expect the United States and other WTO Members to continue to respect all their trade obligations to China if China does not respect all its trade obligations to the United States and other Members of the WTO. As it grows economically, China is growing as a force in world trade and thus in the WTO. China values its membership in the WTO, in part because China is aware of the considerable benefits it derives from membership.
Professing its ongoing commitment to the WTO and to international trade based on accepted international rules, China has also insisted, correctly, that, "Any trade measures that are taken by WTO Members must conform to WTO rules."36 But this admonition applies not only to measures taken in retaliation against perceived trade violations; it applies also to the measures that are taken that give rise to those retaliatory measures.
Evidently ignored so far by the United States is Article 39 of the TRIPS Agreement, which establishes a WTO obligation for the "Protection of Undisclosed Information."37 The United States was among the leaders in advocating the inclusion of Article 39 in the TRIPS Agreement, but the United States has, to date, not initiated an action in WTO dispute settlement claiming a violation by China of this WTO obligation.
https://www.cato.org/publications/policy-analysis/disciplining-chinas-trade-practices-wto-how-wto-complaints-can-help?utm_source=homepage_items&utm_medium=homepage&utm_campaign=homepage_title_1
According to the U.S. Trade Representative's Office, in a report issued in January of 2018, "The notion that our problems with China can be solved by bringing more cases at the WTO alone is naïve at best, and at its worst distracts policymakers from facing the gravity of the challenge presented by China's non-market policies."4 A recent report by the USTR has gone so far as to call China's entry into the WTO in 2001 under the terms adopted at that time a mistake.
While it is true that China's rise poses a unique challenge to the WTO-based world trading system, and there are limits to what can be done to counter China's mercantilist and protectionist practices under existing WTO rules through dispute settlement, this paper makes the case that WTO dispute settlement has considerably more potential than the Trump administration thinks, and it offers, over the long term, a far more effective means of responding to protectionist Chinese trade policies than the current Trump policy of applying illegal unilateral tariffs on billions of dollars' worth of Chinese products entering the U.S. market-and threatening hundreds of billions more.
As Mark Wu, despite his reservations about the efficacy of WTO dispute settlement with respect to China, has acknowledged, thus far the WTO "Has served its purpose effectively as a forum to enforce China's trade obligations. On the numerous occasions when the WTO has ruled against China, the Chinese government has willingly complied with the judgment and usually altered its laws or regulations to comply with WTO rules."11.
China cannot expect the United States and other WTO Members to continue to respect all their trade obligations to China if China does not respect all its trade obligations to the United States and other Members of the WTO. As it grows economically, China is growing as a force in world trade and thus in the WTO. China values its membership in the WTO, in part because China is aware of the considerable benefits it derives from membership.
Professing its ongoing commitment to the WTO and to international trade based on accepted international rules, China has also insisted, correctly, that, "Any trade measures that are taken by WTO Members must conform to WTO rules."36 But this admonition applies not only to measures taken in retaliation against perceived trade violations; it applies also to the measures that are taken that give rise to those retaliatory measures.
Evidently ignored so far by the United States is Article 39 of the TRIPS Agreement, which establishes a WTO obligation for the "Protection of Undisclosed Information."37 The United States was among the leaders in advocating the inclusion of Article 39 in the TRIPS Agreement, but the United States has, to date, not initiated an action in WTO dispute settlement claiming a violation by China of this WTO obligation.
https://www.cato.org/publications/policy-analysis/disciplining-chinas-trade-practices-wto-how-wto-complaints-can-help?utm_source=homepage_items&utm_medium=homepage&utm_campaign=homepage_title_1
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