U.S. – China Trade Relations and the Presidential Campaign — Need for Restraint.


     U.S. – China trade relations are again becoming a political issue during this campaign season. Here are a few items concerning the recent exchange of comments by the presidential contenders, the recent complaints filed by the U.S. and China on the same day in the WTO, and a good editorial reminding us of the need for restraint.
… A lead Wall Street Journal editorial criticizes Romney’s trade statements as being protectionism and China-bashing. It argues he should know better since cheaper imports creates jobs in the U.S. and often “Chinese” goods represent only the final assembling of them. “Romney’s Trade Pessimism.” Wall Street Journal (Sept. 14, 2012).
… The Obama and Romney campaigns are arguing over who is softer on China and blaming China for outsourcing of U.S. jobs. “Politicize Issues of China and Manufacturing.” New York Times (Sept. 16, 2012).
… China filed an action against the U.S. in WTO concerning A / D duties placed on a wide variety of Chinese imports into the U.S. WTO News (Sept. 17, 2012). On the same the U.S. filed an action in the WTO against China for its subsidies on auto part exports to the U.S. “Obama Challenges China’s Export Subsidies. USTR News (Sept. 17, 2012) and USTR Fact Sheet (Sept. 17, 2012).
… The Obama administration previously filed an action in July against China in the WTO concerning its tariffs on import of U.S. autos. WTO News (July 2012).
     Here are three charts I’ve prepared concerning U.S. – China litigation in the WTO and one going back to the Clinton Administration. They clearly show that President Obama has brought more actions against China than President Bush and he has been much more focused in bringing them. But he has filed far fewer WTO actions against other countries and far less than President Bush or President Clinton.
…… “China in the WTO / DSU (2001-2012).” (Chart).
…… “China and U.S. WTO Litigation (2001-2012).” (Chart).
……  “U.S. – China WTO Cases — Bush, Obama & Clinton Administrations Compared.”
   To me it would be better if both countries emphasized the benefits of free trade and economic liberalization. That the import of cheaper products into the United States generates significant domestic employment and that the investment into China by U.S. multinationals assist in the rebalancing of the Chinese economy and meeting Chinese consumption demands. By the way, the Obama administration is to be congratulated on not naming China a “currency manipulator.” The yuan is in fact appreciating. There is simply nothing in the WTO agreements addressing in any manner the issue of currency rates and export subsidies.
     The rebalancing of China’s domestic economic objectives with the American rebalancing of our Asian relations should be mutually reinforcing. The exclusion of China from the Trans-Pacific Partnership (TPP) negotiations should be carefully reassessed. A more inclusive and multilateral approach to global trade should be our preferred policy option if possible when confronting geo-political and geo-economic transformative landscapes.
      Domestic politics that drive foreign trade policy in both countries  should be refocused on the long-term goals and not short-term debating points. We need a sustainable comprehensive relationship  encompassing our competitiveness involving trade, business, investment, politics and national security interests. Hopefully, after the selection of  new presidents in both countries better policies will prevail. This is what U.S. – China and global trade relations need.

About Stuart Malawer

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