Trade and China

When we stopped treating mainland China like a pariah that should be isolated, and trade opened up, we had high hopes.

It was thought that with trade opening up for China would come a liberalization for the government.

China was admitted to the WTO in 2001 following lengthy negotiations, amid widespread expectations that membership in the world body would ease its transition from a state-run to a market-oriented economy.

Instead we have not had a fair trading partner. There is widespread theft of our intellectual property. Just the latest is the theft of the software that Tesla has spent millions in developing, and GE trade secrets.

Maybe we are starting to wake up.

WASHINGTON—President Trump ramped up his attacks on China and the world trading system, threatening Friday to have the U.S. unilaterally revoke the special breaks global rules grant to nations that call themselves developing countries.

The move, coming on the eve of a new round of U.S.-China trade talks in Shanghai, appears aimed at pressuring Beijing to commit to new specific measures to buy more U.S. goods and further liberalize its market for foreign companies.

“The WTO is BROKEN when the world’s RICHEST countries claim to be developing countries to avoid WTO rules and get special treatment. NO more!!!” Mr. Trump wrote in a tweet. “Today I directed the U.S. Trade Representative to take action so that countries stop CHEATING the system at the expense of the USA!”

…Mr. Trump, however, has contended that China shouldn’t qualify for the benefits that come with developing country status, which include export subsidies and procedural advantages for WTO disputes. Other developed countries have raised similar concerns.

Under current WTO rules, any member can decide to declare itself to be “developing” rather than “developed,” a status that allows it to avoid some of the market-opening measures adopted by other members, or to delay them.

The White House memo says that if the normally slow-moving WTO doesn’t change those longstanding rules in the next few months, the U.S. will, on its own, stop treating countries like China as developing.

 

It’s a start.