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  January 1st, 2017 | Written by

China Still Not Living Up to WTO Commitments

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  • It's been 15 years that China joined the WTO.
  • “Trade with China has been one step forward, two steps back.”
  • The WTO enforcement system has been ineffective at stopping China from violating WTO norms.

“Trade with China has been one step forward, two steps back for 15 years. Each time China claims to move toward opening up trade, it turns around and introduces another new mercantilist trade barrier to counteract it.”

So said Robert D. Atkinson, president of the Information Technology and Innovation Foundation (ITIF), a U.S. science and technology policy think tank, on the recent 15-year anniversary of China joining the World Trade Organization (WTO).

“The WTO enforcement system has been ineffective at stopping it,” Atkinson added. “In 2001, the pundits were nearly unanimous in saying that joining the WTO could change China as it bought into the same rules of the game for market-based trade that everyone else plays by. Now we know that what China really bought from Geneva was a get out of jail free card. President-elect Donald Trump’s pledge to get tougher on China’s mercantilism should be a top priority in January to turn China’s false promises into real ones.”

According to Atkinson, China has made little or no progress since the ITIF released a report last year detailing the country’s failure to live up to its WTO commitments.

Accrording to that report, “China’s economic and trade policies increasingly contravene fundamental principles of global trade, including national treatment, non-discrimination, and rules-governed, market-based trade in accordance with the theory of comparative advantage.” China’s abuse of the system, the report concluded, has become more aggressice since it joined the WTO.

Among China’s infractions documented in the report, it continues to require technology transfer as a condition of market access; its state-owned enterprises don’t make purchases based on commercial considerations; it has not opened the telecommunications market to foreign concerns; it has not substantially reduced export subsidies nor reduced intellectual property theft and violations; and it has failed to liberalize foreign film distribution.

The report urges a policy of “constructive confrontation” which emphasizes a results-oriented trade strategy pursued with a whole-of-government approach―“an approach, the report concludes, “that needs to be whole-heartedly embraced on both sides of the Atlantic.”