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China warns of trade war, urges US to abide by WTO rules

The Asian economic powerhouse has called on the Trump administration to respect the rules agreed by the members of the World Trade Organization, warning that moves to discredit them could trigger a 'trade war.'

US ignorance of globally agreed trading rules could trigger a "trade war," a Chinese government official said on Thursday, responding to recent statements from the White House that the Trump administration wouldn't feel bound by the World Trade Organization's (WTO's) decisions.

"If WTO members ignore the organization's rules for their own sake and refuse to implement its rulings on disputes, the multilateral trade system will exist in name only and there could even be a repetition of the trade war of the 1930s," Sun Jiwen, a Ministry of Commerce spokesman, said at a briefing in Beijing.

Last week, the United States Trade Representative wrote in a letter to Congress that the White House had reviewed the terms under which the United States joined the WTO when it was founded in 1995.

In the founding document, "Congress had made clear that Americans are not directly subject to WTO rulings," the review concluded.

The text - which is entitled "The President's 2017 Trade Policy Agenda" - also said the US government would "aggressively defend American sovereignty over matters of trade policy."

Sidelining WTO?

Since 1995, the WTO's dispute settlement system has heard more than 500 cases centered on whether countries have broken agreed trading rules in areas including subsidies, customs and tariffs. The WTO cannot punish countries that do not abide by rulings, but can authorize retaliatory measures.

Under President Barack Obama, the US brought at least 16 trade complaints against China, arguing that Beijing's policies on goods ranging from chicken to aluminum broke the organization's rules. China has also often voiced its own complaints to the group.

In response to the US policy change, China now warned that moves to discredit the WTO would be detrimental to the future of multilateral trade.

"We call on major WTO members to live by what they teach, abide by WTO rules and fulfill their duties," Jiwen told reporters.

US President Donald Trump has repeatedly stated that his administration could accomplish its trade goals by focusing on bilateral talks rather than multilateral negotiations. In his election campaign last year, he described WTO policies as a "disaster" and promised a more aggressive approach to US international trade, including threatening to unilaterally impose import tariffs.

Regarding China, Trump has accused China of being a free-rider in the international system, saying its unfair trade policies have cost thousands of US jobs. He also threatened Beijing with import duties of up to 45 percent.

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uhe/kd (AFP, Bloomberg)

 

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