A recent article in the American Lawyer (March 12, 2015) entitled “The U.S. Offensive in the China Trade War” argues the case that the U.S. WTO litigation and domestic actions are not justified. They amount to protectionism and are counter-productive. It makes a number of interesting points:
…. Foreign direct investors (U.S. multinationals in China) are caught in the crossfire between exporters in China and the U.S. fighting each other through WTO litigation;
…. There is a U.S. government trade offensive in the WTO and this is parallel to its domestic offensive against Chinese firms under U.S. antitrust laws concerning price-fixing and predatory pricing;
…. The trade offensive impacts a minute $1ob yearly of Chinese exports out of $591n in mutual trade;
… The use of trade and antitrust laws by the U.S. government now is mirrored by China’s use of its trade and antitrust regimes. Keep in mind that trade law is aimed at government action and antitrust is aimed at corporate action;
…. There is an inconsistency in the application by the U.S. in applying countervailing and antidumping duties. The U.S. treats China as a market economy in applying subsidies. It considers China a non-market when applying antidumping laws (by using third-party surrogate pricing for determining home market sales / cost of production);
…. The U.S. law applies a “dualism.” It does not consider WTO decisions as part of or recognized as U.S. domestic law. It is viewed as only international law, as presumably an international judicial decision, that is not incorporated into the domestic legal system under the ‘doctrine of incorporation‘ that applies to customary international law only. This is part of a general failure of U.S. courts (led by the Supreme Court) of not fully effectuating international law.
Without countering these arguments the general theme that emerges is a credible argument against the narrative that the U.S. is merely enforcing trade rules to ensure fairness. This argument is that there is a counter-narrative. That U.S. actions are not upholding WTO rulings and is often protectionism. That the Chinese use of WTO trade procedures and domestic Chinese antitrust legislation is a mirror-image of U.S. actions.
While I would generally conclude that this counter-narrative is not correct. Many specific points are very interesting and some quite persuasive. But a full counter to this counter-argument (that also needs to be more fully developed) is for another day.