Nov. 17, 2006 — The just-released 2006 annual report of the U.S.-China Economic and Security Review Commission provides further evidence that China has been seriously inconsistent in meeting the obligations it incurred upon its entry into the World Trade Organization.
“Anywhere you look, by almost any measure, the U.S.-China relationship is moving in the wrong direction,” said United Steelworkers President Leo. W. Gerard.
The Commission, charged by Congress to evaluate the national security implications of bilateral trade between the U.S. and China, found that China’s adherence to its many WTO obligations is spotty at best. According to the Commission, China, as part of its centralized industrial policy, continues to use a wide range of subsidies to encourage the manufacture of goods for export and to secure foreign investment in its manufacturing sector, the report found.
Failure to enforce intellectual property rights is another particularly egregious example of China’s noncompliance with WTO rules, according to the report. China fails to protect copyrights, inventions, brands, and trade secrets.
Gerard applauded a Commission recommendation that Congress urge the U.S. Trade Representative to press ahead aggressively with a WTO case against China for its failures to enforce property rights. “Our manufacturers here at home are finding it harder and harder to compete against an economic system in China that is built on oppressed workers, subsidized inputs and capital, stolen intellectual property and other unfair advantages,” Gerard said.
China’s trade relationship with the United States is becoming increasingly imbalanced. This year, China is expected to export $284.9 billion worth of goods to the United States, up from $243.4 billion in 2005. Total U.S. exports to China were $41.8 billion in 2005 and an estimated $56 billion this year.
China, meanwhile, has not accepted the mantle of responsible leadership that Congress expected when it ended the annual Most Favored Nation debate by awarding China PNTR status, allowing entry into the WTO, the report found.
It was expected that China would, among other things, adhere to the rules of a rules-based trading system by opening its markets to American exporters, investors, businesses and farmers, and become a member of the community of nations that promotes democratic government and human dignity as well as peace and stability in the world.
“Ending the annual Most Favored Nation debate was touted as a path to greater openness, democracy and freedom in China. The record proves the emptiness of these claims,” said Commission member George Becker, a retired USW International President.
The complete U.S.-China commission 2006 annual report can be accessed at www.uscc.gov/.