Last week the Alliance for American Manufacturing released a new report confirming what many of us in Ohio have known for a long time – our international trade system isn’t working for American workers.
The World Trade Organization – the WTO – was established in 1995 and was intended to set clear rules for international trade, and to provide ways to enforce those rules when countries violate them.
But the WTO has only selectively enforced its own rules, and it has allowed rampant trade violations by our competitors to go unchecked. Instead of enforcing a level playing field, the WTO has cracked down on American laws meant to fight back against illegal competition.
And it’s American workers who have paid the price. China is a perfect example of this failure.
China joined the WTO in 2001 on the condition that it would transition to a market economy, and would commit to other economic reforms. But China hasn’t cleaned up its act – and the WTO has done nothing about it.
Just look at the steel industry. Companies owned by the Chinese government dominate the Chinese steel industry, and, after receiving all sorts of illegal government subsidies, these companies dump steel into the U.S., putting our steel mills out of business and our steel workers out of jobs. And rather than providing American steel companies with a way to crack down on Chinese cheating, the WTO has undermined the tools our businesses need to defend themselves and their workers.
It’s fundamentally unfair: China cheats and they win; we follow the rules and we lose.
Now, China has filed its own case with the WTO, claiming that we need to treat the country as having a market economy – but this couldn’t be further from the truth. The Chinese government puts the thumb on the scales for its companies – often companies owned or controlled by the government. That’s not a free market.
If China wins its case at the WTO – as they have too many times before – it would dramatically weaken our ability to fight back against the illegal dumping that’s hurting our American companies.
That’s why I made clear in a letter I sent to then-President-elect Trump in November that we need a reset of our trade relationship with China, starting with a reset at the WTO. We need to fight currency manipulation, crack down on China’s unfair trade practices, and not allow China to get away with claiming it has a free market economy. We should renegotiate China’s WTO commitments, and force them to actually meet them.
And if we can’t accomplish this reset through the WTO, we need to consider ideas to go around it to protect American workers and American jobs. I’m encouraged by the news from the Trump Administration last week that they agree, and that they’re preparing a plan to bypass the WTO and take direct action against China and other countries where we have trade disputes.