The US needs to pursue new strategies and update its domestic trade tools to deal with China’s “state-led, non-market policies and practices,” the US Trade Representative’s (USTR) office said on Wednesday in a new assessment report.
The USTR said in its annual report on China’s compliance with WTO rules that the “Phase 1” trade agreement signed by former US president Donald Trump’s administration two years ago failed to address fundamental US concerns with China’s industrial policies and supportive policies, including “massive financial resources.”
It said such support, which includes favorable regulatory support to Chinese industry and limited market access for imported goods and services, is often aimed at specific targets for capacity, production and market share.
Photo: AFP
The report, issued annually to the US Congress since China joined the WTO in 2001, is the first issued under US Trade Representative Katherine Tai (戴琪) and reflects her China trade strategy.
It follows last year’s trade data showing Beijing’s failure to meet promised two-year targets for purchasing US goods, services and energy under the Phase 1 deal, which eased a tariff dispute between the world’s two largest economies.
“China has not moved to embrace the market-oriented principles on which the WTO and its rules are based, despite the representations that it made when it joined 20 years ago,” Tai said in a statement. “China has instead retained and expanded its state-led, non-market approach to the economy and trade.”
The USTR report said that the US needs to update its domestic trade law tools to reflect the current realities of China’s trade policies, “to secure a more level playing field for US workers and businesses.”
COMPETITION BILL
A sweeping China competition bill passed by the US House of Representatives and under consideration in the Senate would expand the use of anti-subsidy tariffs to target cross-border subsidies for Chinese companies that invest in offshore production to skirt US duties.
“It is also apparent that existing trade tools need to be strengthened, and new trade tools need to be forged,” the USTR said in the report. “China pursues unfair policies and practices that were not contemplated when many of the US trade statutes were drafted decades ago, and we are therefore exploring ways in which to update our trade tools to counter them.”
The report said the US was still pursuing bilateral engagement “to hold China accountable for its existing commitments,” including under the Phase 1 agreement.
It also said that China had failed to make good on other Phase 1 commitments. Those include regulatory approvals for US agricultural biotechnology and a risk assessment on the use of ractopamine, a feed additive used to produce leaner pork and beef in the US.
‘LABELING’
Chinese Ministry of Commerce spokesman Gao Feng (高峰) yesterday urged the US to adopt a reasonable and practical approach to trade with China, so that bilateral ties could return to the right track.
“US labeling China as non-market oriented does not have any proof in international economic and trade rules, nor is it consistent with the facts,” Gao said.
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