Ex­perts ques­tion re­ports of trade threat

China Daily (Hong Kong) - - TOP NEWS - By CHEN WEIHUA in Wash­ing­ton and ZHONG NAN in Bei­jing

US and Chi­nese ex­perts are skep­ti­cal about news re­ports that the Trump ad­min­is­tra­tion may an­nounce the ini­ti­a­tion of a Sec­tion 301 probe against China.

News me­dia in the United States re­ported last week that the Trump ad­min­is­tra­tion was go­ing to an­nounce last Fri­day a broad in­quiry into China’s trade poli­cies, es­pe­cially on in­tel­lec­tual prop­erty rights.

Later re­ports sug­gested that it was post­poned.

Wayne Mor­ri­son, a spe­cial­ist in Asian trade and fi­nance at the Con­gres­sional Re­search Ser­vice, said if the US Trade Rep­re­sen­ta­tive be­gan a Sec­tion 301 case against China and then ini­ti­ated a World Trade Or­ga­ni­za­tion dis­pute set­tle­ment case against it, that would not be a big deal be­cause ev­ery WTO mem­ber can ini­ti­ate such a case.

“How­ever, if the United States did not use the WTO dis­pute set­tle­ment process and at some point im­posed sanc­tions against China, that might gen­er­ate con­cerns that the US was un­der­min­ing the very process it fought to cre­ate when the WTO was es­tab­lished,” he told China Daily on Mon­day.

“China could also chal­lenge the US use of uni­lat­eral sanc­tions in the WTO or might re­spond with its own sanc­tions against the United States, which could threaten to cause a trade war,” he said.

Chad Bown, a se­nior fel­low at the Peter­son In­sti­tute for In­ter­na­tional Eco­nomics, de­scribed the pos­si­ble ac­tion by the Trump ad­min­is­tra­tion as dusting off an out­dated US trade law that al­lows the US pres­i­dent to uni­lat­er­ally im­pose tar­iffs on an­other coun­try.

Sec­tion 301 of the US Trade Act of 1974 was used most by the Rea­gan ad­min­is­tra­tion.

Bown said Trump’s pro- posed so­lu­tion may only make mat­ters worse. He said the use of an ob­so­lete trade law is likely to shift at­ten­tion from China’s ac­tions to Trump’s poli­cies.

The US govern­ment con­ducted 122 such Sec­tion 301 in­ves­ti­ga­tions since 1974, but only once since 2001.

Bown noted that US trad­ing part­ners have be­come in­creas­ingly un­happy with such an “ag­gres­sively uni­lat­eral” ap­proach, with the US govern­ment act­ing as po­lice, prose­cu­tor, judge and jury.

Bown said trig­ger­ing a Sec­tion 301 case is prob­lem­atic be­cause it would pro­vide added fuel to the ar­gu­ment that the Trump ad­min­is­tra­tion is un­do­ing the US com­mit­ment to rules-based trade and decades of work to es­tab­lish in­ter­na­tional co­op­er­a­tion.

He said a Trump de­ci­sion to op­er­ate out­side the WTO rules would spur China to fol­low suit.

“The fall­out from Trump’s rogue use of yet an­other out­dated US trade law would be con­sid­er­able,” Bown wrote on Peter­son’s web­site.

Sang Baichuan, di­rec­tor of the In­sti­tute of In­ter­na­tional Busi­ness at the Univer­sity of In­ter­na­tional Busi­ness and Eco­nomics in Bei­jing, said the Trump ad­min­is­tra­tion has ad­dressed China dif­fer­ently than the US has in the past.

If their trade ties were to be pro­foundly al­tered or dam­aged, the out­come would pos­si­bly end the era of spread­ing global pros­per­ity, Sang said.

“US con­sumers should be aware that China has not only been pro­vid­ing them cheaper and in­creas­ingly higher qual­ity prod­ucts, and US man­u­fac­tur­ers an in­creas­ing mag­ni­tude of for­eign de­mand, but it has also been lead­ing much of its sur­plus sav­ing to the US, which has been derelict in sav­ing enough to sup­port its own econ­omy,” Sang said.

China could also chal­lenge the US use of uni­lat­eral sanc­tions in the WTO.” Wayne Mor­ri­son, spe­cial­ist in Asian trade and fi­nance

Con­tact the writ­ers at chen­wei­hua@chi­nadai­lyusa.com

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.