Dan Drezner half-jokingly proposes the following:
It would be interesting for the U.S. Trade Representative and the EU Trade Directorate to make the following proposal:
Hey, Wen, you're right about the unfair tire tariffs and the like. Let's make a trade deal: you allow the yuan to appreciate, say, 20% against the dollar over the next twelve months. In return, we will announce a voluntary two-year moratorium on any new anti-dumping and escape clause measures targeted against Chinese imports. What do you say?
To be honest, I'm not sure if this is legal, but it would be an interesting gambit.
This might not work -- among other things, there would be MFN problems to a moratorium that covered only Chinese imports -- but I like the general concept. How about this instead: The U.S. and EU abandon the "non-market economy" classification in return for China allowing the yuan to appreciate?
