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Public Comments Regarding the Administration’s reviews and report to the President on trade agreement violations and abuses.

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Cato Institute filed 1 comment on this docket between Aug 6, 2017 and Aug 6, 2017. 63 other organizations filed here. The comment window closed 3284d ago.

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Aug 6, 2017· Huan Zhu, Herbert A. Stiefel Center for Trade Policy Studies Cato Institute· USTR-2017-0010-0056

Dear Mr. Gresser: We write in response to your request for public comments on the performance of multilateral trade agreements. In particular, we would like to focus on the U.S. trade relationship with China under the World Trade Organization (WTO). China's entry into the WTO in 2001 fundamentally reshaped China's trading relationship with the U.S. and the rest of the world. China agreed to lower its tariffs and to abide by a wide range of other rules, with its behavior now subject to WTO dispute procedures. It is important to objectively evaluate the benefits and challenges brought by China's WTO accession, in order to devise an appropriate approach and strategy for U.S. trade relations with China in coming years. The U.S. economy as a whole, and consumers and businesses in particular, have significantly benefited from trading with China. To begin, as part of its WTO accession, China agreed to reduce tariff rates. Its simple average tariff rate fell from 15.9% in 2001 to 9.7% in 2015. Beyond tariffs, the WTO imposes constraints on disguised protectionism, including through domestic taxes, product regulations, and food safety standards. The WTO also has rules on subsidies, intellectual property protection, and trade remedy measures with which China must comply as a WTO Member. All of these rules have helped reduced some trade barriers in China's market and have brought China's practices in line with international norms, and have facilitated trade and investment between the U.S. and China. As a result, trade between the U.S. and China dramatically increased. In 2015, the total bilateral trade between the U.S. and China reached $664.4 billion; $600.8 billion for trade in goods and $63.6 billion for trade in services. Compared to the year before China joined the WTO, bilateral trade in goods has grown over 400% while bilateral trade in services has grown over 600%. In addition, investment between the U.S. and China has also grown rapidly. By the end of 2016, total U.S. investment in China passed $240 billion. China's cumulative investment in the U.S. has reached $110 billion since 1990. Such an increase in trade and investment translates to a large number of new job opportunities for American workers. The US-China Business Council estimated that approximately 2.6 million jobs were created by US-China trade and investment relations. Meanwhile, according to a NBER working paper, trade with China benefited American consumers by reducing the manufacturing price index by 7.6%. While there have been benefits, challenges remain. These challenges include high tariffs on some goods, various non-trade barriers, China's subsidies to certain industries, restrictions on foreign investment in many industries, indigenous innovation policies that give preferential treatment to domestic businesses, forced technology transfer requirements, insufficient enforcement of intellectual property rights and other practices that may discriminate against foreign competitors. Some of the issues can and have been handled in the WTO system. One special strength of the WTO is its dispute settlement mechanism. If China violates its obligations under the WTO, other nations can challenge its practices through the WTO dispute settlement body. So far, the U.S. has filed 21 WTO complaints against China. Nine were ruled in favor of the U.S., eight cases are still in progress, and the rest were resolved through settlement. While some issues can be resolved by the WTO dispute system, the WTO does not cover all U.S.-China trade issues. This could be because China did not make commitments in particular areas when it joined the WTO, such as the Government Procurement Agreement and FDI access in finance sectors, or because the WTO left some areas untouched, such as state-owned enterprises, cybersecurity, and information communication technology regulations. China's practices in these areas have presented big challenges to the U.S. business community. The Trump…

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