Why Not Use the Phase One Deal's Enforcement Mechanism?

On Friday, USTR initiated a Section 301 investigation of "China’s implementation of the Economic and Trade Agreement Between the Government of the United States of America and the Government of the People’s Republic of China ('Phase One Agreement')." According to USTR, "[f]ive years following entry into force, despite repeated U.S. engagement with China to address implementation concerns, China appears not to have lived up to its commitments under the Phase One Agreement with respect to non-tariff barriers, market access issues, and purchases of U.S. goods and services." USTR says that it will now examine "whether China has fully implemented its commitments under the Phase One Agreement, the burden or restriction on U.S. commerce resulting from any non-implementation by China of its commitments, and what action, if any, should be taken in response."

I'm not sure I understand why the Trump administration is starting a new Section 301 investigation, rather than taking action under the Phase One deal itself. Back in 2020, during Trump's first term, U.S. trade officials were touting the Phase One deal's dispute resolution chapter as being more effective than the dispute provisions of other trade agreements. On this point, then-U.S. Trade Rep. Bob Lighthizer said the following (in response to a question from Senator Wyden):

For the first time we have in a written agreement, for the first time we have a really, really good enforcement mechanism. One which escalates and then the United States can take an action if we don't get a satisfactory resolution. And we won't be retaliated against. So this is like a historic thing and I want to point that out.

While I have been skeptical of this approach to dispute settlement, it's the one they chose, and they then argued that it would be very effective. So, if they are concerned with China's compliance with the Phase One deal obligations, why not use the Phase One deal dispute resolution chapter to address the problem? This would be a useful question for someone to ask the administration. (I've speculated elsewhere on some possible reasons for launching a new Section 301 investigation, but here I'm just trying to push someone to ask the administration for their explanation of why they didn't use the Phase One deal's dispute mechanism.)

As far as I can tell, there is no public information about this mechanism ever having been used, either at the end of Trump's first term, during Biden's term, or so far in Trump's second term. On that point, a concern raised by Senator Wyden in the exchange with Lighthizer, which focused on transparency, seems relevant: "my question here is does this confidentiality arrangement in the China deal phase one mean that nobody including members of this committee will know if the United States is taking enforcement action against China?"

The next time someone from USTR is testifying before Congress, a good issue to raise would be whether the Phase One deal dispute mechanism has ever been used, and if not, why not. (When asked about this in April 2024, I think then-U.S. Trade Rep. Katherine Tai's answer was no, as she talked only about "advancing in terms of raising the issues with China," but it was a little unclear.)

It's worth noting in this context that in its announcement of the new Section 301 investigation, USTR makes reference to "repeated U.S. engagement with China to address implementation concerns." But what exactly was that engagement? Was it through the dispute resolution chapter, or something else? If it was through the dispute resolution chapter, it would be helpful to understand how that played out. Whatever happened, it seems not to have worked, so if this was action taken through the dispute resolution chapter, apparently it was not as effective as originally claimed. And if it was not through the dispute resolution chapter, we come back to the question of why that chapter was not used.