{"id":548,"date":"2018-08-22T17:15:00","date_gmt":"2018-08-22T17:15:00","guid":{"rendered":"http:\/\/thefreezoneblog.com\/blog\/2018\/08\/22\/for-us-to-stay-in-wto-china-may-have-to\/"},"modified":"2018-08-22T17:15:00","modified_gmt":"2018-08-22T17:15:00","slug":"for-us-to-stay-in-wto-china-may-have-to","status":"publish","type":"post","link":"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/","title":{"rendered":"For U.S. to Stay in WTO, China May Have to Leave"},"content":{"rendered":"
\n<\/div>\n

\nInstead of unilateral tariffs, the U.S. and its allies could use the World Trade Organization to force China to alter its trade-distorting behavior\u2014or leave<\/h2>\n
\n<\/div>\n\n\n\n\n
\"President<\/td>\n<\/tr>\n
Add captionPresident Trump and Chinese President Xi Jinping shake hands in Beijing in November 2017. The U.S. and China are in an intensifying trade fight. Photo: Qilai Shen<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

<\/p>\n

\n<\/div>\n\n\n\n
<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n<\/div>\n
\n<\/div>\n
\n
\nThe intensifying trade fight<\/a>
\n between the U.S. and China didn\u2019t come out of the blue. American
\nfrustration has long been building over China\u2019s failure to live up to
\nits commitments when it joined the World Trade Organization in 2001.<\/div>\n
\nBut President Trump\u2019s unilateral tariffs<\/a>
\n risk a Pyrrhic victory that damages global trading rules that have
\nbroadly served U.S. interests. There may be a more effective solution:
\nthreaten China with expulsion from the WTO.<\/div>\n
\nCalling this the nuclear option doesn\u2019t really do it justice
\nsince the nuclear weapons don\u2019t even exist. The WTO lacks a formal
\nmechanism to throw out a member. But its founding charter, the General
\nAgreement on Tariffs and Trade, includes a section, Article XXIII, that
\ncan achieve the same thing. It allows a case to be brought against a
\nmember for behavior that doesn\u2019t specifically violate the treaty but
\n\u201cnullifies or impairs\u201d the benefits every other country expects to
\nderive from the WTO.<\/div>\n
\n\u201cChina\u2019s economy is structured differently from any other major
\n economy\u2026in ways that were not anticipated by WTO negotiators,\u201d Jennifer
\n Hillman, a Georgetown University law professor told Congress\u2019s U.S.-China Economic and Security Review Commission<\/a> in June.<\/div>\n
\nWTO rules don\u2019t deal well with the extensive overlap between
\nChina\u2019s government, ruling Communist party and companies. Article XXIII,
\n she said, was designed \u201cexactly for this type of situation.\u201d<\/div>\n
\nChina is more open and market oriented today than before it joined the WTO<\/a>. It has generally adhered to the letter of WTO decisions, including when it loses cases there. And it argues much criticism aimed at it is unfounded<\/a>. For example, no formal laws force foreign companies to transfer technology to Chinese firms, it says.<\/div>\n
\nBut as Ms. Hillman, a former member of the WTO\u2019s top
\ndispute-settlement panel, shows, that misses the many ways China
\nviolates the commitments it undertook when it joined the WTO. In the
\n1994 Marrakesh declaration, which led to the WTO\u2019s creation, members
\nagreed to a trading system based on \u201copen, market-oriented policies.\u201d
\nYet market forces in China are retreating as the state expands.<\/div>\n
\nForeign companies report they are routinely compelled to
\ntransfer technology to Chinese companies to do business there, in
\nviolation of Beijing\u2019s commitments. Ms. Hillman notes that even
\nunwritten measures can be challenged at the WTO.<\/div>\n
\nChina\u2019s discriminatory licensing treatment and its failure to
\nbetter police the theft of foreign intellectual property both violate
\nits obligations under the WTO\u2019s side agreement on intellectual property.<\/div>\n
\nChina, like all WTO members, is supposed to publish all of its
\n subsidies so that others can respond to them. It doesn\u2019t, because many
\ntake the form of low-cost loans, raw materials or other inputs to or
\nfrom state-owned enterprises.<\/div>\n
\nChina isn\u2019t sued more often for such transgressions, Ms.
\nHillman says, because such cases can be hard to win. Foreign companies
\nare reluctant to provide evidence because they see foreign competitors
\nas intertwined with the Chinese government, which can retaliate, for
\nexample by blocking their expansion. Many countries won\u2019t bring cases
\nagainst China on their own for the same reason, says Chad Bown, of the
\nPeterson Institute for International Economics. No such fear exists
\nabout suing the U.S.<\/div>\n
\nMs. Hillman says this is why other countries should bring a
\n\u201cbig, bold\u201d case based under Article XXIII; by addressing China\u2019s
\nsystemic violations, such a case would depend less on proving smaller,
\nspecific violations.<\/div>\n
\nIf the U.S., European Union, Japan, Canada, Australia, Mexico
\nand South Korea brought the case jointly and won, China would either
\nhave to change its policies, or face WTO-sanctioned penalties on almost
\nall of its exports. Ms. Hillman goes further: The findings could be used
\n to amend the WTO charter to explicitly prohibit the offending policies.
\n If China couldn\u2019t abide by amendments, it would effectively withdraw
\nfrom the WTO.<\/div>\n
\nOrdinarily the WTO acts by consensus, so China could just veto
\n the amendments. But Ms. Hillman notes that if consensus can\u2019t be
\nreached, the WTO allows amendments with a supermajority of members.<\/div>\n
\nAll of this is risky and unprecedented; only a handful of WTO
\ncases have been brought under Article XXIII. (Ms. Hillman says they were
\n much narrower and not relevant to the China situation.) No country has
\nleft the WTO, much less been expelled.<\/div>\n
\nPutting together a case would take a long time and require the
\n U.S. to work with allies it has alienated with tariffs. The Trump
\nadministration has little love for the WTO and has reportedly weighed
\nwithdrawal, while blocking appointments to its dispute settlement body.<\/div>\n
\nYet some administration officials are willing to entertain
\nthis strategy. Does China \u201cwant to be a part of the WTO and just behave
\nlike everybody else, or don\u2019t they?\u201d Kevin Hassett, chairman of the
\nWhite House Council of Economic Advisers, said on Fox Business Network
\nlast week. \u201cAnd if they don\u2019t, then we, the community of nations, are we
\n going to let them stay in the WTO?\u201d Before he became Mr. Trump\u2019s trade
\nambassador, Robert Lighthizer proposed bringing a case against China
\nunder Article XXIII.<\/div>\n
\n
\nJapanese and EU trade officials are meeting with their
\nAmerican counterparts in Washington Friday to discuss China. They
\nalready have their own reasons for wanting China to change, but now they
\n have another: forcing China to act like it belongs in the WTO may be
\nnecessary to keep the U.S. from leaving.<\/div>\n
\n
<\/div>\n<\/div>\n<\/div>\n\n\n\n
<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n<\/div>\n
\n<\/div>\n
\n<\/div>\n

<\/p>\n

\n<\/div>\n
\n<\/div>\n
\n<\/div>\n
\n<\/div>\n

\n
<\/h2>\n","protected":false},"excerpt":{"rendered":"

Instead of unilateral tariffs, the U.S. and its allies could use the World Trade Organization to force China to alter its trade-distorting behavior\u2014or leave Add captionPresident Trump and Chinese President Xi Jinping shake hands in Beijing in November 2017. The U.S. and China are in an intensifying trade fight. Photo: Qilai Shen The intensifying trade fight between […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[41],"class_list":["post-548","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-free-zones","has-post-title","has-post-date","has-post-category","has-post-tag","has-post-comment","has-post-author",""],"yoast_head":"\nFor U.S. to Stay in WTO, China May Have to Leave - The Freezone Channel<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"For U.S. to Stay in WTO, China May Have to Leave - The Freezone Channel\" \/>\n<meta property=\"og:description\" content=\"Instead of unilateral tariffs, the U.S. and its allies could use the World Trade Organization to force China to alter its trade-distorting behavior\u2014or leave Add captionPresident Trump and Chinese President Xi Jinping shake hands in Beijing in November 2017. The U.S. and China are in an intensifying trade fight. Photo: Qilai Shen The intensifying trade fight between […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/\" \/>\n<meta property=\"og:site_name\" content=\"The Freezone Channel\" \/>\n<meta property=\"article:published_time\" content=\"2018-08-22T17:15:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/ci6.googleusercontent.com\/proxy\/SmKKQaSnEcscwO4708LZn31p-8IjO49lfTI2TYv2EIApab-B-aMLOE6zsGv_Ti_qnh8s_lVPSWDBWAtNLPVjOEDpXYIzk3ARs8bN-qyDeYI=s0-d-e1-ft#https:\/\/images.wsj.net\/im-20109?width=620&aspect_ratio=1.5\" \/>\n<meta name=\"author\" content=\"The Freezone Channel\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"The Freezone Channel\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/\",\"url\":\"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/\",\"name\":\"For U.S. to Stay in WTO, China May Have to Leave - The Freezone Channel\",\"isPartOf\":{\"@id\":\"https:\/\/thefreezonechannel.com\/old\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/ci6.googleusercontent.com\/proxy\/SmKKQaSnEcscwO4708LZn31p-8IjO49lfTI2TYv2EIApab-B-aMLOE6zsGv_Ti_qnh8s_lVPSWDBWAtNLPVjOEDpXYIzk3ARs8bN-qyDeYI=s0-d-e1-ft#https:\/\/images.wsj.net\/im-20109?width=620&aspect_ratio=1.5\",\"datePublished\":\"2018-08-22T17:15:00+00:00\",\"dateModified\":\"2018-08-22T17:15:00+00:00\",\"author\":{\"@id\":\"https:\/\/thefreezonechannel.com\/old\/#\/schema\/person\/96bf776ac18c24b9af3209b53d6372d3\"},\"breadcrumb\":{\"@id\":\"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/#primaryimage\",\"url\":\"https:\/\/ci6.googleusercontent.com\/proxy\/SmKKQaSnEcscwO4708LZn31p-8IjO49lfTI2TYv2EIApab-B-aMLOE6zsGv_Ti_qnh8s_lVPSWDBWAtNLPVjOEDpXYIzk3ARs8bN-qyDeYI=s0-d-e1-ft#https:\/\/images.wsj.net\/im-20109?width=620&aspect_ratio=1.5\",\"contentUrl\":\"https:\/\/ci6.googleusercontent.com\/proxy\/SmKKQaSnEcscwO4708LZn31p-8IjO49lfTI2TYv2EIApab-B-aMLOE6zsGv_Ti_qnh8s_lVPSWDBWAtNLPVjOEDpXYIzk3ARs8bN-qyDeYI=s0-d-e1-ft#https:\/\/images.wsj.net\/im-20109?width=620&aspect_ratio=1.5\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/thefreezonechannel.com\/old\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"For U.S. to Stay in WTO, China May Have to Leave\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/thefreezonechannel.com\/old\/#website\",\"url\":\"https:\/\/thefreezonechannel.com\/old\/\",\"name\":\"The Freezone Channel\",\"description\":\"The Freezone Channel\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/thefreezonechannel.com\/old\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/thefreezonechannel.com\/old\/#\/schema\/person\/96bf776ac18c24b9af3209b53d6372d3\",\"name\":\"The Freezone Channel\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/thefreezonechannel.com\/old\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/3f4e6030bdb5805ae43cd1d477fe145bf335374d0d4cf5fc6df5a21a74c2c20f?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/3f4e6030bdb5805ae43cd1d477fe145bf335374d0d4cf5fc6df5a21a74c2c20f?s=96&d=mm&r=g\",\"caption\":\"The Freezone Channel\"},\"sameAs\":[\"https:\/\/thefreezonechannel.com\"],\"url\":\"https:\/\/thefreezonechannel.com\/old\/author\/fzmainadmin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"For U.S. to Stay in WTO, China May Have to Leave - The Freezone Channel","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/","og_locale":"en_US","og_type":"article","og_title":"For U.S. to Stay in WTO, China May Have to Leave - The Freezone Channel","og_description":"Instead of unilateral tariffs, the U.S. and its allies could use the World Trade Organization to force China to alter its trade-distorting behavior\u2014or leave Add captionPresident Trump and Chinese President Xi Jinping shake hands in Beijing in November 2017. The U.S. and China are in an intensifying trade fight. Photo: Qilai Shen The intensifying trade fight between […]","og_url":"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/","og_site_name":"The Freezone Channel","article_published_time":"2018-08-22T17:15:00+00:00","og_image":[{"url":"https:\/\/ci6.googleusercontent.com\/proxy\/SmKKQaSnEcscwO4708LZn31p-8IjO49lfTI2TYv2EIApab-B-aMLOE6zsGv_Ti_qnh8s_lVPSWDBWAtNLPVjOEDpXYIzk3ARs8bN-qyDeYI=s0-d-e1-ft#https:\/\/images.wsj.net\/im-20109?width=620&aspect_ratio=1.5"}],"author":"The Freezone Channel","twitter_card":"summary_large_image","twitter_misc":{"Written by":"The Freezone Channel","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/","url":"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/","name":"For U.S. to Stay in WTO, China May Have to Leave - The Freezone Channel","isPartOf":{"@id":"https:\/\/thefreezonechannel.com\/old\/#website"},"primaryImageOfPage":{"@id":"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/#primaryimage"},"image":{"@id":"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/#primaryimage"},"thumbnailUrl":"https:\/\/ci6.googleusercontent.com\/proxy\/SmKKQaSnEcscwO4708LZn31p-8IjO49lfTI2TYv2EIApab-B-aMLOE6zsGv_Ti_qnh8s_lVPSWDBWAtNLPVjOEDpXYIzk3ARs8bN-qyDeYI=s0-d-e1-ft#https:\/\/images.wsj.net\/im-20109?width=620&aspect_ratio=1.5","datePublished":"2018-08-22T17:15:00+00:00","dateModified":"2018-08-22T17:15:00+00:00","author":{"@id":"https:\/\/thefreezonechannel.com\/old\/#\/schema\/person\/96bf776ac18c24b9af3209b53d6372d3"},"breadcrumb":{"@id":"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/#primaryimage","url":"https:\/\/ci6.googleusercontent.com\/proxy\/SmKKQaSnEcscwO4708LZn31p-8IjO49lfTI2TYv2EIApab-B-aMLOE6zsGv_Ti_qnh8s_lVPSWDBWAtNLPVjOEDpXYIzk3ARs8bN-qyDeYI=s0-d-e1-ft#https:\/\/images.wsj.net\/im-20109?width=620&aspect_ratio=1.5","contentUrl":"https:\/\/ci6.googleusercontent.com\/proxy\/SmKKQaSnEcscwO4708LZn31p-8IjO49lfTI2TYv2EIApab-B-aMLOE6zsGv_Ti_qnh8s_lVPSWDBWAtNLPVjOEDpXYIzk3ARs8bN-qyDeYI=s0-d-e1-ft#https:\/\/images.wsj.net\/im-20109?width=620&aspect_ratio=1.5"},{"@type":"BreadcrumbList","@id":"https:\/\/thefreezonechannel.com\/old\/for-us-to-stay-in-wto-china-may-have-to\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/thefreezonechannel.com\/old\/"},{"@type":"ListItem","position":2,"name":"For U.S. to Stay in WTO, China May Have to Leave"}]},{"@type":"WebSite","@id":"https:\/\/thefreezonechannel.com\/old\/#website","url":"https:\/\/thefreezonechannel.com\/old\/","name":"The Freezone Channel","description":"The Freezone Channel","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/thefreezonechannel.com\/old\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/thefreezonechannel.com\/old\/#\/schema\/person\/96bf776ac18c24b9af3209b53d6372d3","name":"The Freezone Channel","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/thefreezonechannel.com\/old\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/3f4e6030bdb5805ae43cd1d477fe145bf335374d0d4cf5fc6df5a21a74c2c20f?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/3f4e6030bdb5805ae43cd1d477fe145bf335374d0d4cf5fc6df5a21a74c2c20f?s=96&d=mm&r=g","caption":"The Freezone Channel"},"sameAs":["https:\/\/thefreezonechannel.com"],"url":"https:\/\/thefreezonechannel.com\/old\/author\/fzmainadmin\/"}]}},"builder_content":"","_links":{"self":[{"href":"https:\/\/thefreezonechannel.com\/old\/wp-json\/wp\/v2\/posts\/548","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thefreezonechannel.com\/old\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thefreezonechannel.com\/old\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thefreezonechannel.com\/old\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thefreezonechannel.com\/old\/wp-json\/wp\/v2\/comments?post=548"}],"version-history":[{"count":0,"href":"https:\/\/thefreezonechannel.com\/old\/wp-json\/wp\/v2\/posts\/548\/revisions"}],"wp:attachment":[{"href":"https:\/\/thefreezonechannel.com\/old\/wp-json\/wp\/v2\/media?parent=548"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thefreezonechannel.com\/old\/wp-json\/wp\/v2\/categories?post=548"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thefreezonechannel.com\/old\/wp-json\/wp\/v2\/tags?post=548"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}