The U.S. decision to support the terms of China’s accession to the World Trade Organization more than 20 years ago was a mistake, the Office of the U.S. Trade Representative says in its annual report on China’s compliance with its WTO commitments.
[Jack Caporal | January 18. 2018 | Inside US Trade]
The report blasts China for maintaining a state-led economy that embraces policies at odds with fundamental WTO commitments and principles.
“China largely remains a state-led economy today, and the United States and other trading partners continue to encounter serious problems with China’s trade regime,” states the 161-page annual report to Congress. “Meanwhile, China has used the imprimatur of WTO membership to become a dominant player in international trade."
“Given these facts, it seems clear that the United States erred in supporting China’s entry into the WTO on terms that have proven to be ineffective in securing China’s embrace of an open, market-oriented trade regime,” the report states.
The report, published on Jan. 19, largely tracks with what USTR Robert Lighthizer said about China last September, in remarks at the Center for Strategic and International Studies. The USTR said then that the WTO cannot handle the scale of Beijing’s mercantilist economic and industrial policy, so the U.S. must use every tool available to it to defend itself.
“Furthermore, it is now clear that the WTO rules are not sufficient to constrain China’s market-distorting behavior,” the report states. “While some problematic policies and practices being pursued by the Chinese government have been found by WTO panels or the Appellate Body to run afoul of China’s WTO obligations, many of the most troubling ones are not directly disciplined by WTO rules or the additional commitments that China made in its Protocol of Accession.”