Cape Times

Use WTO rules with China, US urged


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. Xinhua

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