context: The US-Mexico-Canada Agreement includes a provision that allows the US to terminate the deal if other members initiate trade negotiations with China without prior notice, as a 'non-market economy' by the agreement standard. If it becomes a prototype of other US trade deals with the EU or Japan, it may undermine China's trade expansion efforts.
China has stressed on multiple occasions that there is no ‘non-market economy country’ clause in the WTO multilateral trading rules, says Gao Feng 高峰 MofCOM spokesperson. Clauses of this type only exist in domestic laws of certain member countries, he says. Gao maintains that the goal of establishing free trade zones is to facilitate trade instead of sidelining other countries.
The practical impacts of the clause are limited, because other countries may not accept US demands to sever trade relations with China, says Tu Xinquan 屠新泉 UIBE China Institute for WTO Studies dean, adding that China can promote trade with Mexico and Canada in ways that do not involve a free trade agreement.
A consensus has yet to be reached within the EU regarding provisions on reduced tariffs and other issues in the US-EU trade deal. Due to competing demands of different countries within the EU, a consensus will not be easy, says Dong Yan 东艳 Chinese Academy of Social Sciences researcher.
China opposes the concept of domestic laws overriding international law, says Gao, stating that countries should attract trading partners based on market potential and policy environment.
Regarding the US-China trade war, Gao says that as the world’s two largest economies, a certain degree of competition between the two is natural. However, both past precedents and the current environment both suggest a larger demand for bilateral cooperation, concludes Gao.