Importance of Trade Remedies to the U.S. Trade Relationship with China. Challenges Facing the Use of Antidumping Law: A Critical Period for the Administration and Congressional Action

摘要

The U.S.-China trade relationship has grown to be an important one for both countries over the past 25 years. China is now the U.S. third largest trading partner (after Canada and Mexico) and the U.S. is Chinas second largest trading partner overall. The most significant fact about U.S.-China trade, however, is that it is seriously out of balance and not sustainable at its present pace. The U.S. trade deficit with China has increased from $600 million in 1985 to $162 billion in 2004. While U.S. exports to China have increased in recent years, the U.S. export base is much smaller than imports from China so that growth in U.S. exports to China is dwarfed by the growth in U.S. imports from China. The trade deficit with China is the result, in part, of various factors that are not market-driven, such as Chinas WTO compliance deficiencies, undervalued currency, and rampant infringement of intellectual property rights, among other reasons. The Chinese economy is still characterized to a significant degree by continued state control of economic factors, which result in false market signals and distorted trade flows. In particular, Chinas undervalued currency encourages undervalued Chinese exports to the U.S. and discourages U.S. exports because U.S. exports are artificially overvalued. As a result, undervalued Chinese exports have been highly disruptive to the U.S. and to other countries as well, as evidenced by trade remedy statistics. In the past 10 years, China has been the number one target country of antidumping investigations brought by other countries. Thus, it is important that the U.S. and other countries maintain the right to protect their economic interests consistent with WTO rules, including the right to use trade remedies such as antidumping laws. U.S. manufacturers need strong and effective trade remedies to address the trade distortions caused by undervalued Chinese exports and state control in China and to prevent the loss of jobs and industries due to such distortions.