Use WTO rules with China, US urged

The Star Early Edition - - WORLD -

The US should re­sort to rules of the World Trade Or­gan­i­sa­tion (WTO), not uni­lat­eral trade tools such as Sec­tion 301, to re­solve trade dis­putes with China, a for­mer White House econ­o­mist has said in Wash­ing­ton.

US Pres­i­dent Don­ald Trump was set to di­rect the US Trade Rep­re­sen­ta­tive to­day to de­ter­mine whether to in­ves­ti­gate China’s trade prac­tices un­der Sec­tion 301 of the Trade Act of 1974, se­nior ad­min­is­tra­tion of­fi­cials said on Sat­ur­day.

Sec­tion 301, once heav­ily used in the 1980s and the early 1990s, al­lows the US pres­i­dent to uni­lat­er­ally im­pose tar­iffs or other trade re­stric­tions against for­eign coun­tries.

But the US has rarely used the trade tool since the WTO was cre­ated in 1995. “It be­came no longer nec­es­sary re­ally for the US to use that law, be­cause now we have an ef­fec­tive dis­pute set­tle­ment sys­tem un­der the WTO,” said Chad Bown, a se­nior fel­low at the Wash­ing­ton DC-based Peter­son In­sti­tute for In­ter­na­tional Eco­nom­ics.

It will be­come dif­fi­cult for the Trump ad­min­is­tra­tion to de­fend the use of Sec­tion 301 to­day as the US gov­ern­ment “acted as a po­lice force, pros­e­cu­tor, jury and judge” in the process, ac­cord­ing to the trade ex­pert.

“A de­ci­sion to trig­ger Sec­tion 301 is prob­lem­atic be­cause it would pro­vide ad­di­tional fuel to the al­ready sim­mer­ing ar­gu­ment that the Trump ad­min­is­tra­tion is un­do­ing the Amer­i­can com­mit­ment to rules­based trade and decades of work to es­tab­lish in­ter­na­tional co-op­er­a­tion,” he said.

If the Trump ad­min­is­tra­tion moves away from re­solv­ing trade dis­putes through the WTO and in­stead starts tak­ing uni­lat­eral ac­tions, the US could face re­tal­i­a­tion by other trad­ing part­ners.

The Chi­nese Min­istry of Com­merce has urged US au­thor­i­ties to abide by WTO rules in its trade mea­sures and to re­solve dif­fer­ences with China through di­a­logue.

Not­with­stand­ing the lat­est move by Wash­ing­ton, the US and China need to ne­go­ti­ate a new trade deal, on is­sues such as the steel and alu­minium in­dus­tries, in­vest­ment, sta­te­owned en­ter­prises and in­tel­lec­tual prop­erty rights, said Bown.

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