China facing rising US trade protectionism
Updated: 2007-10-11 14:11
[The author Miao Yingchun is a researcher with the Department of World Economics, Wuhan University.]
On September 14, China requested the World Trade Organization (WTO) to settle its dispute with the United States over Chinese coated paper after negotiations with the US failed.
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It is the first time that China has filed a WTO case against the US since the country's entry to the world trade body in 2001.
The frequent usage of trade protective tools, like anti-dumping, anti-subsidy duties, guarantee measures and special guarantee measures, has become a source of trade conflicts between China and the US.
According to WTO statistics, China is the most targeted country in US anti-dumping investigations. Since the first anti-dumping case involving menthol produced in China in 1980, Chinese exports have been subject to 10.2 percent of all anti-dumping cases investigated in the US. The antidumping cases involving Chinese exports have significant values, some more than $100 million.
On March 30 this year, the US Department of Commerce decided to impose an anti-subsidy tax on coated paper produced in China. This is a significant change in US anti-subsidy tax policies. Before that, this tax was only imposed on products from market economies and China had always been treated as a "non-market economy" by the US authorities in nearly all trade-related issues.
The Chinese products involved in the anti-dumping cases are mostly in the light and chemical industries, and machinery and electronic products such as bicycles, color TV sets and steel pipes.
The products have helped China gain a considerable position in global trade, and has led to more jobs in the country. A conservative calculation shows that the light and textile industries employ 50 million people a year.
In the anti-dumping cases initiated by the US, China is the victim of a high proportion of confirmed dumping. Between 1980 and 2006, the US International Trade Committee (ITC), the institute authorized to give decisions on the anti-dumping litigations, concluded that 70 out of 111 Chinese commodities had been dumped. This rate is much higher than other trade partners of the US.
The US authorities are also using more diversified means to protect its domestic market from Chinese products after China became a WTO member. The frequent use of antidumping measures toward Chinese exports by the US is primarily due to economic pressure.
With its huge trade deficit, the US has undergone an industrial restructure. The government has to protect its domestic industries from foreign competitors. As one of the biggest trade partners of the US, China has not only increased its export volume to the US but has also added value to its commodities in recent years thanks to the development of Chinese manufacturing.
Thus, competition between Chinese exports and US domestic products have become more intensive.
It is, therefore, natural for US authorities to resort to antidumping measures to protect their domestic industries.
Another motive is the strategic interests of the US. Researchers from the US National Bureau of Economic Research, Thomas J. Prusa and Susan Skeath, found that US antidumping cases were often driven by political pressure, national security interests, and historical economic relations. And these considerations are sometimes more important than economic interests.
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