The Obama administration closed the book on engagement with China last week with the annual meetings of the Joint Commission on Commerce and Trade (JCCT). These meetings, which ran from November 21 to 23 in Washington, D.C., pushed for full implementation of previous commitments and some new language on manufacturing-relevant issues, such as new commitments on China’s trade secrets and online anti-counterfeiting efforts, industrial policy issues in cybersecurity and competition and specific policy concerns in sectors like semiconductors, medical devices, pharmaceuticals and food processing. However, the session still focused more on statements of broad principle and extended dialogue, such as on overcapacity, versus the types of specific, concrete policy changes that are needed to address significantly the many longstanding issues facing the U.S. manufacturing sector in China.
At the end of the day, manufacturers need to see progress on these issues, and it is that concrete progress that manufacturers view as the benchmark for the U.S. approach to China. China stands as one of the United States’ largest commercial relationships, with more than $560 billion in bilateral trade and $3 billion in bilateral investment. While the third largest market for U.S.-manufactured goods exports, China also persistently ranks as one of the most frequently cited trouble spots for manufacturers in the United States, with a range of market-distorting policies and practices, such as industrial overcapacity, insufficient intellectual property infringement and protectionist industrial policies. All of these policies harm the ability of manufacturers to open new or expand U.S. factories, sell more at home and abroad and provide good-paying manufacturing jobs here in the United States.
Heading into the next administration, the U.S. government must strengthen U.S. efforts, working with the industry and global trading partners, to hold China accountable to both global trading rules and China’s own trade commitments so that China does not continue to advance its domestic industry at the expense of ours. Such efforts must produce smart, practical outcomes that hold China accountable, while also ensuring that manufacturers in the United States and their workers that depend on a rules-based trading relationship with China are not put at risk. Commercial dialogues like the JCCT are an important part of the toolkit to address those barriers alongside other bilateral and multilateral dialogues, work within the World Trade Organization and the robust use of trade enforcement tools both domestic and international as well as trade and investment negotiations that address additional market-distorting activities.
Manufacturers in the United States are committed to building a robust trading relationship with China but will not settle for anything less than a free and fair competitive landscape where both countries are playing by the same rules.
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