context: President Trump has repeatedly accused the WTO of treating the US ‘unfairly’ and has threatened to pull the US out of the organisation. It has been suggested that China prepare for uncertainty and seek to solve trade tensions with the US bilaterally.
As US–China trade tensions escalate, an article published by Shanghai WTO Affairs Consultation Centre suggests ways in which the two countries can improve trade relations and reduce current investment control.
In summer 2017, the two countries signed the 100 Day Action Plan and agreed to relax market access restrictions for certain industries. Similar measures can be taken now to normalise US–China trade relations and direct them towards a positive end, says the Centre.
The two countries should also formulate their own bilateral trade rules. The multilateral trade rules issued by the WTO are insufficient to solve US–China tensions. On the other hand, bilateral rules are virtually non-existent.
Current WTO agreements can only maintain the overall international trade order. If China and the US start disobeying relevant rules in these agreements, other countries might follow suit. Therefore, China and the US should make sure they observe WTO rules and resort to the dispute settlement mechanism to resolve disputes instead of taking unilateral action.
In terms of intellectual property theft, some of China’s actions have indeed crossed boundaries, especially certain clauses in the Made in China 2025 initiative. China should be aware that its government will disturb market order by interfering with sales and purchases. On the other hand, other countries should make unified complaints against China’s actions through the right channels.
In response to Trump’s stubbornness, Beijing should put forward its own terms and respond to complaints related to regulatory barriers, subsidies and opaque administrative environment, argues the Centre.