USTR says new trade tools needed to fight China state-led trade
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[February 16, 2022] By
David Lawder
WASHINGTON (Reuters) - The United States
needs to pursue new strategies and update its domestic trade tools to
deal with China's "state-led, non-market policies and practices", the
U.S. Trade Representative's office said on Wednesday in a new assessment
report.
USTR said in its annual report on China's compliance
https://ustr.gov/sites/default/files/
enforcement/
WTO/2021%20USTR%20Report%20to%20Congress%20on%20China's%20WTO%20Compliance.pdf
with World Trade Organization rules that the "Phase 1" trade agreement
signed by the Trump administration two years ago failed to address
fundamental U.S. concerns with China's industrial policies and
supporting policies, including "massive financial resources."
It said such support, which includes favorable regulatory support to
Chinese industry and limited market access for imported goods and
services, is often aimed at specific targets for capacity, production
and market share.
The report, issued annually to Congress since China joined the WTO in
2001, is the first issued under U.S. Trade Representative Katherine Tai
and reflects her China trade strategy.
It follows final 2021 trade data showing Beijing's failure to meet
promised two-year targets for purchasing U.S. goods, services and energy
under the Phase 1 deal, which eased a tariff war between the world's two
largest economies.
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"China has not moved to embrace the market-oriented principles on which
the WTO and its rules are based, despite the representations that it
made when it joined 20 years ago," Tai said in a statement. "China has
instead retained and expanded its state-led, non-market approach to the
economy and trade."
The USTR report said the United States needs to update its domestic
trade law tools to reflect the current realities of China's trade
policies "to secure a more level playing field for U.S. workers and
businesses."
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![](../images/021622pics/busine49.jpg)
U.S. Trade Representative Katherine Tai testifies before the Senate
Appropriations Subcommittee on Commerce, Justice, Science, and
Related Agencies during a hearing on the proposed budget for fiscal
year 2022 for the Office of the U.S. Trade Representative on Capitol
Hill, in Washington, U.S., April 28, 2021. Bill O'Leary/Pool via
REUTERS/File Photo
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A sweeping China competition bill passed by the U.S. House of
Representatives and under consideration in the Senate would expand the
use of anti-subsidy tariffs to target cross-border subsidies for Chinese
companies that invest in offshore production to skirt U.S. duties.
"It is also apparent that existing trade tools need to be strengthened,
and new trade tools need to be forged," USTR said in the report. "China
pursues unfair policies and practices that were not contemplated when
many of the U.S. trade statutes were drafted decades ago, and we are
therefore exploring ways in which to update our trade tools to counter
them."
The report said the United States was still pursuing bilateral
engagement "to hold China accountable for its existing commitments",
including under the Phase 1 agreement.
It also said China had failed to make good on other Phase 1 commitments.
These include regulatory approvals for American agricultural
biotechnology and a risk assessment on the use of ractopamine, a feed
additive used to produce leaner pork and beef in the United States.
(Reporting by David Lawder; Editing by Edwina Gibbs)
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