Trump’s trade pick knows we have a China problem
By Editorial Board,
GIVE PRESIDENT-ELECT Donald Trump’s pick to be the next U.S. trade representative his due: In 2010, trade attorney Robert Lighthizer told a congressional committee that optimistic Clinton administration forecasts for China’s inclusion in the World Trade Organization in 2001 had not panned out. There was more than a little truth in that, and still is.
China’s exports to the United States grew much faster than U.S. exports to China, contributing to a whopping trade deficit. Many U.S. manufacturing jobs were lost, only partially offset by gains in other sectors. WTO membership did not lead to China’s development along more market-oriented, democratic lines. Rather, the Communist Party rules more dictatorially and as corruptly. As for international law, China seems more intent on testing its limits, in the South China Sea and elsewhere, including in the economic sphere, than on respecting them.
The question is what the U.S. government ought to do about all of this. As trade representative, Mr. Lighthizer would have responsibility both for negotiating new trade agreements — not a priority for the president-elect — and for pressing U.S. complaints against China (and others) at the WTO — a bigger priority, it would seem. In that same 2010 statement, he advocated an “aggressive” posture in such matters and, again, that’s not inherently wrong. The Obama administration itself has brought 24 WTO cases since 2009; of those, 15 were against China, for such alleged offenses as subsidizing tire exports. In reaction to China’s failure to curb its destabilizing overproduction of steel, the Obama administration, in cooperation with Europe, has quite properly resisted China’s unwarranted demands for recognition as a “market economy,” which would add to China’s legal rights within the WTO.
Mr. Lighthizer can be expected to continue that sound policy. More questionably, though, in 2010 he advocated imposing unilateral tariffs on China, even if that meant what he politely called “derogation” of U.S. commitments to the WTO, and even if it might risk a trade war — “heightened trade frictions” — that could involve not only China but third parties. The risk could be worth taking, he wrote, to “force change in the system.” We assume that’s still Mr. Lighthizer’s view, because the U.S. trade deficit with China is larger than it was in 2010 — even if one of the factors he blamed for it, systematic currency devaluation by Beijing, has given way to more recent efforts to strengthen the renminbi.
The Senate should challenge Mr. Lighthizer on how, and whether, his current views reflect current realities, and ask him this crucial question: Shouldn’t the United States exhaust all legal remedies and policy alternatives before reaching for the blunt instrument of retaliatory tariffs? And aren’t we still a long way from that point? Come to think of it, a pretty good way to push back against China would be to establish a broad free-trade coalition in the Asia-Pacific region under U.S. leadership, with high standards for international commerce that the United States itself helps write. That is exactly why the Obama administration, with considerable Republican support, worked so hard to bring about the Trans-Pacific Partnership.
Read more here: Joshua Kurlantzick: Let China win. It’s good for America. John Pomfret: China wanted President Trump. It should be careful what it wished for. David Ignatius: Could Trump’s freewheeling foreign policy have its benefits?