There was a hearing yesterday, March 12, in the Senate Finance Committee, under the chairmanship of Senator Chuck Grassley (R-IA). The topic was "Approaching 25: The Road Ahead for the World Trade Organization." The witness was the U.S. Trade Representative, Ambassador Robert Lighthizer. And, to be sure, there was a lot of discussion of the WTO - its value to the United States and others and the challenges facing it. It is in the nature of such hearings, however, that, ultimately, the topic is whatever is on the minds of the senators or representatives in the room. And yesterday, China was very much on senators' minds.
China and the WTO are not separate issues, of course. Senator Ron Wyden of Oregon is the Ranking Democrat on the Finance Committee. In his opening statement, he outlined the link between China's becoming a member of the WTO in 2001 and the challenges America faces today in its trade with China. These four sentences from Senator Wyden's opening statement connect the relevant dots:
The rules that underpin the WTO were crafted more than two decades ago when China was an economic middleweight. ...
Today China is an economic heavyweight, second only to the U.S. and continuing to grow rapidly. ...
For our purposes in today's hearing, the Chinese government identifies weaknesses in the WTO system, and it seizes on them to further its economy's explosive growth. ...
The U.S. and our economic allies have not done enough to crack down on those abuses.
To repeat, those sentences are from Senator Wyden's opening statement as the Ranking Member of the Committee. Today's featured quote, on the other hand, is from his close questioning of Ambassador Lighthizer. Tariffs were at the center of that, specifically the tariffs and counter tariffs that the United States and China are now each imposing on imports from the other, with the initial such tariffs arising from America's Section 301 investigation into China's theft of U.S. intellectual property and its practice of forcing technology transfers as a condition of investment.
Here is some of what Senator Wyden said in questioning Ambassador Lighthizer and some of what Ambassador Lighthizer said in response:
SENATOR WYDEN:
... What I want to know is, what is going to be the test with respect to lifting the [301] tariffs [against China]? Is it your intent to say, we've got to see evidence on the ground of real changes before we lift the tariffs?
AMBASSADOR LIGHTHIZER:
Well, I would say that is the subject of negotiation; so I'm not getting into it here in public. But I do agree with you that we have to have real progress. And we have to maintain the right to be able to - whatever happens to the current tariffs - to raise tariffs in situations where there [are] violations of the agreement. And that's the core. If we don't do that, then none if it makes any difference. In terms of where we are on the specific tariffs, that's a matter of negotiation, and once again, I'm happy to talk to you about it in private.
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