China joined rules-based trading system — then broke the rules

“It’s been 20 years since China entered the global trade body, the World Trade Organization, a move that gave it access to the international trade system.”

“China’s WTO accession has rendered the U.S. undeniable gains. Consumers have enjoyed two decades of relatively inexpensive imported consumer goods, which boosted their buying power and the economy. A 2019 analysis by the London School of Economics of the impact of China’s WTO entry on U.S. consumer prices concluded that “each US household saw its annual purchasing power increase by $1,500 thanks to lower prices caused by increased trade with China from 2000 to 2007.”

WTO-brokered access to the Chinese market for U.S. agricultural products has reaped an export boom for farmers and agribusiness. And the U.S.-China Business Council’s 2021 member survey revealed that “ninety-five percent of respondents report that their China operations were profitable over the last year.”

But there is compelling data that China’s WTO entry helped accelerate America’s deindustrialization. A 2020 analysis by the nonprofit Economic Policy Institute, a labor-oriented think tank, estimated in January 2020 that the U.S. trade deficit with China resulted in the loss of 3.7 million jobs from 2001-2018.

The Chinese government’s willingness to push its economy to a more market-oriented setting broadly ground to a halt by around 2008. And that may have been the plan.

“When we promised to adopt a market economy, we made it absolutely clear that it would be a socialist market economy,” Long Yongtu, China’s chief negotiator for WTO accession, said in an interview in May. That effectively meant that China exploited foreign market access while blocking the U.S. from the Chinese market through measures largely outside of the WTO’s supervision and enforcement mechanisms.”

“Practically..the WTO may be incapable of bringing China’s unfair trading practices to heel because all 164 member nations — including China itself — need to accede to any new agreements.

“I don’t think the WTO can adequately discipline Chinese government practices because the rules of the WTO are now old,” Barshefsky said.”

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