Here are two questions/answers related to China's place in the global trading system and how the United States should deal with China, from today's House Ways and Means committee hearing on the Biden administration's trade agenda:
Chairman Neal:
Ambassador, when China joined the WTO in 2001, the expectation was that WTO membership would lead China to become more democratic, embrace a greater respect for human rights and develop a market based economy. China clearly has not met that expectation. Do you think the global trading system itself needs to develop new tools to address the challenges posed by China, and how would you envision working with our allies to help confront some of these acute challenges in China, namely forced labor, and human rights abuses?
Ambassador Tai:
Chairman Neal, I agree with you that when China joined the WTO, there was a lot of hope and expectation that membership in the WTO would really lead to China internalizing a lot of the norms, economically and politically, that are represented by the members of the WTO. Over time we have seen that we all make choices, countries make choices, governments make choices, and along the way we see that the choices that China has made has not led it to the results that many of those supportive of its accession to the WTO had hoped for.
So, let me take your question in a couple parts. One is, it is critical to work with others to confront, to work on, to communicate with China in all the ways where its policies are really powerfully impactful on the rest of the world, that are not impactful in a positive way. At the WTO, yes, we need new rules, but I also want to emphasize that some of the foundational rules at the WTO need to be reshored and reformed in order for the WTO to become relevant to address the challenges that we have, given the changes in the global economy, and the changes in the relationships between WTO members that have happened in the past 25 years.
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Congressman Blumenauer:
... Would you like to comment for a moment on your thoughts about going forward, dealing with China, intellectual property, and the trade disruptions that we've had in the course of the last four years?
Ambassador Tai:
Absolutely, thank you Mr. Blumenauer. In terms of the China challenge, I think this is probably one of the most consequential, if not the most consequential, issue that we have to confront as we are looking at the future of the US economy in the global marketplace. The China challenge is large, China moves fast. China has a very clear vision of where it wants to go. We need to match the competition that we are getting from China by having a clear vision about what kind of economy we want to have, what kind of strengths we have, that we are going to build on, what kind of strengths we have that we still need to build on, and how we are going to relate to China. First, if China can make changes; second, if China cannot make changes. On the question that you've asked regarding forced labor, and the anti- competitive practices from China, whether it's subsidies or other types of practices that really create global market domination that drives out competition in economies like ours.
What I would say is this, that the US-China Trade and Economic Agreement, this Phase One agreement that we have, is the agreement that we have right now, and it does have certain mechanisms that we will need to test out, but in terms of building on, building out where we need to be with respect to China, I am looking forward to working with you, the members of this committee, in the Senate, and across the Administration on how we best position the US economy to be strong, to run fast, and to really come out ahead, after we come out of this pandemic and into the future.
