.png)
WASHINGTON—To paraphrase English poet P.B. Shelley—If election season comes to the United States, can complaints about China be far behind?
U.S. Trade Rep. Ron Kirk (L), U.S. Secretary of Commerce John Bryson (C) and U.S. Secretary of Agriculture Tom Vilsack (R) attended China-U.S. Joint Commission on Commerce and Trade talks in Chengdu, China, on Nov. 21, 2011. The United States demanded “concrete results” from Beijing on the yuan, market access, and intellectual property rights. (Liu Jin/AFP/Getty Images)
It’s a familiar pattern in the United States: The party out of power runs against the China relationship, with an administration in power playing defense, making the best of an imperfect situation.
Whichever side wins, after the inaugural, U.S. policy remains essentially the same. Most dramatically, Ronald Reagan promised official relations with Taiwan after Jimmy Carter’s normalization of diplomatic relations with mainland China in 1979, and Bill Clinton proposed linking most-favored-nation tariffs to human rights in 1992.
Once in office, both presidents concluded that the big changes they had advocated would likely do more harm than good.
Romney’s Plan
Mitt Romney, the likely Republican challenger to President Barack Obama, proposes a similar big shift in trade policy. Should Romney win, could this be the year a long-sparking fuse ignites? Probably not.
Click this tag to read The Epoch Times’ collection of articles on the Chinese Regime in Crisis. Intra-CCP politics are a challenge to make sense of, even for veteran China watchers. Here we attempt to provide readers with the necessary context to understand the situation.
The China relationship for U.S. presidents is a predictable challenge. The two countries are world powers with different views of world order. Both are deeply involved in Asia’s two “frozen conflicts” in the Taiwan Strait and the Korean Peninsula in ways that in unlikely, but well-understood circumstances could bring them into confrontation.
The economic relationship is gigantic and often stressful. Such characteristics have long made the relationship a focus for debate and target for criticism. Interestingly for a Republican candidate, Romney has chosen trade and international economics rather than human rights or military affairs as the focus for his challenge. Here’s just part of his list of Chinese abuses, drawn from his campaign economic blueprint under a section headlined “Confronting China”:
On many occasions Chinese companies, have simply reverse-engineered American products, with no regard for the patents and other protections of intellectual property rights that are crucial to our own economic well-being. The Chinese government facilitates this behavior by forcing American companies to share proprietary technology as a condition of their doing business in China.
A recent study by the U.S. Chamber of Commerce reports that international technology companies consider these practices to be “a blueprint for technology theft on a scale that the world has never seen before.” China’s unfair trade practices extend to the country’s manipulation of its currency to reduce the price of its products relative to those of competing nations such as ours.
After castigating the Obama administration, Romney’s plan makes a series of hawkish-sounding, but actually modest promises—more trade cases at the World Trade Organization, intense border inspections, encouragement of China joining the World Trade Organization’s Government Procurement Agreement, and so on.
Romney’s displeasure will likely find an audience—America’s economic relationship with China offers much to complain about.
The plan does, however, include one very ambitious promise of the sort Reagan and Clinton rethought in 1981 and 1993. This is to go beyond citing China as a “currency manipulator” to impose “countervailing duties” on Chinese products should China not quickly raise the value of the yuan. Romney doesn’t say how high these duties would be, but even a modest extra 10 percent would be a whopping $40 billion—much larger than today’s entire $29 billion U.S. tariff system—in taxation of phones, computers, clothes, shoes, and other home goods.
Romney’s displeasure is likely to find an audience, as America’s economic relationship with China offers much to complain about. Longstanding unhappiness over currency values, import pressures, and intellectual property piracy have chilled the business mood.
These complaints have been joined more recently by a report from the National Counterintelligence Executive, a White House intelligence office, suggesting directed cyber-attacks from China, designed to extract the intellectual property of companies—a more sinister development than anything described in Romney’s litany of complaints. As the U.S. ambassador to the WTO has noted, China has also apparently developed a pattern of using “dumping” tariffs against foreign countries as retaliatory measures, a policy outside WTO rules.
Continued on the next page: Trade Analysis
