Lighthizer needs more trade common sense
US top trade negotiator Robert Lighthizer said Monday that China’s economic model represents an “unprecedented” threat to the world trade system that can’t be addressed under current global rules. His wording was no less sensational than US President Donald Trump. It seems that playing up the China threat theory has become a kind of widely accepted political manifesto in Washington. China appears to be pictured as a super bully in the harsh words of senior US officials. But is it really the case?
As US trade representative, Lighthizer should exhibit more common sense knowing that trade isn’t sustainable if one side keeps profiting from the other. Washington doesn’t need to act as if it has been taken for a ride.
Lighthizer should realize China increased its purchases of US Treasuries for a sixth straight month in July, according to the Treasury Department on Monday. China again became the biggest US debt holder in June, the epitome of mutually beneficial trade relations. Many US products are not favored by Chinese. But China still imports them for its trade balance. Some terribly produced Hollywood movies have profited handsomely on the Chinese market. If China and the US only help themselves, how come bilateral trade rose from $2.5 billion in 1979 to $519.6 billion last year?
Lighthizer also accused China of subsidizing companies to create national champions, suggesting discontent with Chinese firms’ global rankings. The word “champion” echoes Trump’s “America First” slogan. Chinese companies referred to by Lighthizer are characterized by hard work, innovation and active adaptation to the global market economy. They have grown to what they are through the harsh tests of the market. What they can get from the Chinese government is mostly policy support, like US companies from Washington. But Chinese companies have walked a more arduous path to champion than their US rivals due to strict US high-tech controls.
Calling China a threat to the world trade system is untenable. China has made economic progress through towing the line of current international trade rules and always objects to unilateral action. It’s actually the US that acts unilaterally. The US was defendant in 129 out of 520 cases filed to the WTO dispute settlement mechanism. It even abandons multilateral and bilateral deals. It is the US’ degeneration from leader of the international trade system to destroyer-in-chief that represents an unprecedented threat to global trade.
After Trump took office, many in Washington played up unfair US trade with China. Trump picked Lighthizer as trade representative exactly for his hardball stance on China. But the tough guy has made it harder for the White House to make its China policy.
Prior to Trump’s visit to China, the US wants to create some levers to force more concessions out of China. Lighthizer better not think he can make China yield just because he leads a probe into alleged intellectual property violations. China won’t easily fall victim to US bullying. Beijing also has sticks behind the door.