China has been a major focus of the Trump administration, which is focused on the need to deal with the competitive challenges that China poses for the U.S. economy and to put the relationship on a stronger track to tackle those issues. For manufacturers of all shapes and sizes, China is indeed a “big deal”; it is an important trade partner, and we have a relationship that has major commercial potential. Yet, China is also a tough economic competitor and the source of a broad set of market-distorting policies and actions.
Manufacturers have long called on the U.S. and Chinese governments to work toward a more robust, fair U.S.–China relationship that benefits the growth and support of manufacturing here in the United States. In recent weeks, the National Association of Manufacturers (NAM) has submitted detailed comments to the Office of the U.S. Trade Representative (USTR) stressing top issues and approaches to address them.
In a September 20 submission to the USTR, the NAM identified a broad range of issues facing manufacturers that raise questions as to whether China is meeting the commitments it made when it joined the World Trade Organization (WTO) in 2001.
Top issues include continued overcapacity issues in a broad range of sectors enabled by central and local government policies and actions, Chinese industrial policies that tilt the playing field unfairly in favor of domestic companies, troubling digital policies and cross-border data flow restrictions that harm manufacturers with global operations, export subsidies and import barriers that distort trading markets and longstanding challenges with intellectual property (IP) theft:
“Although the U.S.–China trade and investment relationship has grown considerably, reaching nearly $540 billion in manufactured goods traded and nearly $45 billion in accumulated bilateral investment in 2016, manufacturers in the United States face considerable trade-distorting barriers in China that limit market access and tilt the playing field against foreign companies.”
Last week, the NAM also provided detailed comments for USTR’s Section 301 investigation on IP rights concerns, flagging the importance of the administration’s efforts to prioritize the robust protection of American IP rights in China and a range of policies that promote technology transfer and IP theft, including investment restrictions that promote technology transfer to Chinese joint venture partners, government-led industrial policies and cybersecurity measures that promote technology and data localization and enforcement practices in areas such as competition and standards-setting that undermine IP held by manufacturers in the United States.
The NAM’s submission urged the USTR to focus on clear, specific policies and practices that can be addressed, to ensure that these efforts are part of a coherent strategy to both the specific issues and broader issue that limit the ability of innovative manufacturers to compete fairly in China and to make sure that both the strategy and specific actions are consistent with U.S. WTO obligations.
On a daily basis, manufacturers see the benefits and the challenges that China presents. While the U.S.–China commercial relationship remains an important factor in efforts to grow manufacturing in the United States, we still have a long way to go to resolve key issues. Manufacturers in the United States are committed to working with the Trump administration to build a robust trading relationship with China and will not settle for anything less than a strategic approach to push for a free and fair competitive landscape where both countries are playing by the same rules.
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