U.S.-China Economic & Security Review Commission
Hearing on “China and the WTO: Compliance and Monitoring”
Washington, DC
I thank Chairman Robinson and the co-Chairs of this hearing for putting together an excellent agenda, and appreciate Senator Dorgan’s support and guidance.
I would like to add just a
few words about the purpose of this hearing. It is important that our
Government do all it can to ensure that China is living up to its end of the
WTO bargain. The whole point of granting China Permanent Normal Trade
Relations status back in the year 2000 was so that the US could conduct its trade relations with China through the WTO. Among other things, the WTO
offered us a venue for dispute resolution. (We are
surprised no country yet has brought a dispute settlement case against China –
and I don’t think we are the only ones who are surprised.) Furthermore,
in its WTO accession agreement China was obliged to accept certain special
provisions – such as the Transitional
Review Mechanism and special safeguards on import surges and textiles – that
were key conditions for our country to be able to sign the deal.
We need to know how these and other htmects of China’s accession agreement are working. We need to keep track of whether the promised opportunities afforded by China’s entry into the WTO have been realized by American exporters and producers of agricultural and industrial products and the providers of services in our high-tech, information-intensive service economy. If in fact Chinese import barriers have been lowered by adherence to WTO norms, our exporters ought to be seeing the benefits now.
There is now enough of a
track record to give us a picture of where China is doing well and where it is
not; and where our companies and workers and farmers are benefiting – or not.
We as a Government need to determine – and this Commission wants to know, as it
advises the Congress -- whether, after two years of phased-in commitments,
there are things China is doing that are WTO-inconsistent and need to be
challenged in the Geneva dispute settlement process or under American trade
laws. This might include such actions as: direct
subsidies to exporters, discriminatory import licensing procedures, or
continuing to give Value-Added Tax rebates to domestically-manufactured
products but not to imports. As
we heard in Columbia, South Carolina last week, the enforcement of our trade
laws is a high priority for several members of Congress, including Senator
Hollings, who spoke eloquently on the subject and previewed for us his plan to
introduce legislation in this regard.
I am surprised that no country yet has brought a dispute settlement case against China in the WTO. Certainly it is not for lack of compliance concerns. For the U.S., ripe cases might include such actions as: direct subsidies to exporters, discriminatory import licensing procedures, or continuing to give Value-Added Tax rebates to domestically-manufactured products but not to imports. It appears that other members of the WTO are waiting for the U.S. to break the ice, and we should do so soon to ensure that the WTO is the hoped-for robust forum for enforcing China’s trade commitments.
We look forward to hearing from our expert panelists on these and other questions that are key to the health of the US economy and to the US-China relationship.