U.S. Wins New WTO Case Against China — Electronic Payments Case — Good Domestic Politics, but Good Trade Policy?

A WTO panel has just ruled in favor of the United States in its action against China for violating the WTO services agreement (GATS) concerning China’s restrictions on electronic payment services (EPS) via credit card transactions.
While this was a mixed decision China was found to violate its trade obligations allowing market access to foreign credit card providers. RMB transactions were monopolized by China and foreign providers were not allowed to participate in them. U.S. – China WTO Case Concerning Electronic Payment Services. WTO News (July 16, 2012).
This is an important case for several reasons:
 …. (i) This case is in the context of a long list of cases the Obama administration has aggressively brought against China in the WTO;
 …. (ii) Increasingly regulatory measures (non-tariff measures) are being utilized by China and other countries to restrict trade;
…. (iii) Voters in the United States are increasingly calling for  stronger measures against China.
During this election season it is clear that anxiety over the economy, globalization, China, and outsourcing of jobs will be driving the presidential election.
Actions against China in the WTO makes good sense for domestic politics but unfortunately hold the potential of overshadowing other significant causes of our distress. Those causes need to be seriously confronted in order to be able to fashion effective public policy remedies — impacting both our domestic economy and our global trade relations.
For this presidential election issues of global trade seem to be at the heart of domestic politics. For better or for worse.

About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
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