Trump administration calls China, Russia entry into WTO a mistake

The Trump administration said the United States made mistakes letting China and Russia join the World Trade Organization (WTO) because they have failed to shift to market-based economies.

China and Russia have made little progress to align their economies with the commitments they made when joining the WTO, the U.S. trade representative wrote in two reports sent to Congress on Friday. 

{mosads}“The United States is committed to working with all WTO members who share our goal of using the WTO to create and enforce rules that lead to more efficient markets, reciprocal benefits and greater wealth for our citizens,” wrote U.S. Trade Representative Robert Lighthizer.

“However, as these two reports show, the global trading system is threatened by major economies who do not intend to open their markets to trade and participate fairly.”

“This practice is incompatible with the market-based approach expressly envisioned by WTO members and contrary to the fundamental principles of the WTO,” he continued.

The China report says that despite 17 years in the WTO, the communist nation remains a state-led economy focused on promoting its domestic industries at the expense of the United States and other global trading partners while becoming “a dominant player in international trade.”

“Given these facts, it seems clear that the United States erred in supporting China’s entry into the WTO on terms that have proven to be ineffective in securing China’s embrace of an open, market-oriented trade regime,” the report says.

While the United States has worked tirelessly to convince China to comply, the report concludes that it is clear that the WTO’s rules aren’t enough to push Beijing’s economic path toward a market-oriented economy.

President Trump had touted his strong relationship with Chinese President Xi Jinping while criticizing Beijing’s unfair trade practices, raising tensions between the nations. 

The Commerce Department is lining up trade cases against imports from China ranging from steel to aluminum and solar panels.

“The United States will take all other steps necessary to rein in harmful state-led, mercantilist policies and practices pursued by China, even when they do not fall squarely within WTO disciplines,” the report said.

Trump has about three months to decide whether to slap additional tariffs on foreign steel — which comes mainly from China — over national security concerns, with more decisions to follow. 

The trade representative’s report on Russia said that country also had failed to follow WTO rules.

The report noted that importing into Russia “remains a difficult task.”

“So far, Russia’s actions strongly indicate that it has no intention of complying with many of the promises it made to the United States and other WTO members,” the report said. 

“It was a mistake to allow Russia to join the WTO if it is not fully prepared to live by WTO rules.”

China became a member of the WTO in 2001 and Russia joined in 2012.