In my last post, I said this about trade enforcement at the WTO and under the U.S.-China Phase One deal:
... if the U.S. wants to enforce the WTO agreements in relation to the foreign trade barriers it has identified to the same extent other governments -- such as those signing on to the MPIA -- are able to, it would be good to embrace the possible solutions [to the Appellate Body crisis]. Raising these issues in WTO committees can be helpful in a few cases, but sometimes you need to invoke formal dispute settlement to have an impact.
And what about China? The WTO is the best place to go for trade enforcement against China (broad obligations, formal adjudication mechanism), but if the U.S. doesn't want to enforce obligations at the WTO right now, there is also the Phase One deal. That agreement doesn't have an adjudication system, so I don't think it will be very effective, but it does at least have a mechanism to raise complaints. As far as I can tell based on public information, this mechanism has not been used, but it would be nice to hear more from USTR about any enforcement activity taking place under this agreement.
Related to these issues, I noticed these recommendations of the U.S. House Select Committee on Strategic Competition between the United States and the Chinese Communist Party in a report it issued on Tuesday:
6. Direct USTR to bring a comprehensive WTO dispute against the PRC’s subsidization, support for state-owned enterprises, and non-market economy policies and practices with a broad coalition of countries documenting how the PRC has undermined a world trading system “based upon open, market-oriented policies” and impaired the benefits that many Members expected to receive from expanded trade relations with the PRC.
7. Direct USTR to publish a full assessment of the PRC’s compliance with the “Phase One” agreement and remedies necessary to address any areas of non-compliance.
There are things I disagree with in this House report, but I think both of these recommendations are sensible. It has always seemed to me that this sort of WTO complaint (or complaints) against China is the right path forward to deal with the various concerns people have expressed over the years, and I don't find the objections I've heard to filing such a case -- difficulty gathering evidence, retaliation -- to be persuasive. (The report states that "[t]he PRC’s economic system is incompatible with the WTO," but until we've tried enforcing the broad obligations China agreed to when joining the WTO, I don't think we know the answer to whether China's economy can fit within the WTO system.)
On the assessment of the Phase One deal, as I noted in my earlier post, we don't have much information on what has been happening here, so publishing an assessment of this sort would be helpful.
