Thursday, 1 March 2012

Washington seeks to extend hegemony to trade

(Global Times)

US President Barack Obama signed an order Tuesday to create an interdepartmental task force to enforce trade agreements. Some commented that it is directly targeting "unfair trade practices" by its major trade partner China. On the same day, the Information Technology & Innovation Foundation, a Washington think tank, issued a report entitled Enough is Enough: Confronting Chinese Innovation Mercantilism. 

It accused Beijing of using various tricks like subsidies or export restrictions to gain an "absolute advantage" for its companies and urged Washington to "build a global free-trade coalition" with allies to push back against China.

The US has not made such endeavors before. China is facing serious trade frictions. The US deemed that their manufacturing industry is most effective, and "unfair trade practices" are an easy target.

US politicians have repeatedly instilled voters with such information: China is challenging the global trade rule with "national capitalism," and the US must strike back.

Actually, the US is challenging and damaging the rule. Perhaps Washington feels the WTO has become less and less helpful and it has to create a new alternative. The US government now integrates resources and attempts to deal a severe blow to "unfair trade practices" at any time.

However, no matter how strong the US is, it cannot expand and impose its will to a world which will not accept a trade power overriding the WTO. If anyone can freely create an enforcement unit to pursue personal interests, where can world trade order be found?

The world's largest importer cannot seek limitless power, especially since China is only years away from becoming the top importer itself.

This year will see presidential elections in the US and politicians are scoring cheap points on the back of foreign countries. The Democratic Party and Republican Party can always find unity against China.

China has to be clear. China's annual exports to the US were $320 billion last year, but US sanctions against Chinese exports were at no more than $10 billion. The US will not risk a major showdown.

Due to strategic mistrust, mutual precautions are increasing and the risks of politicalizing future trade frictions are intensifying.

US politicians like to exaggerate matters. China should ignore this, stick to WTO rules in the trade lawsuit against the US and protect the interests of Chinese companies.

We should not be intimidated by this so-called enforcement office. The US is not in a position to assess China's trade system. Only the WTO is qualified to assess and WTO Director-general Pascal Lamy has given an A+ to China's performance since its accession.

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