Governing the Interface of U.S.-China Trade Relations

Abstract

The strained U.S.-China trade relationship poses a frontal challenge to the multilateral trading system and has broad repercussions for international law. This article addresses three dimensions of this relationship: (i) the economic dimension; (ii) the geopolitical/national security dimension; and (iii) the normative/social policy dimension. The article advances a middle ground between those seeking to reinforce the WTO system with new rules that limit the state's role in the economy, and those who reject the WTO in favor of a power-based system. It proposes pragmatic reforms to govern the interface of the two states' respective systems across these three dimensions to facilitate ongoing exchange while giving each country latitude to protect itself from the externalities of the other's policies. The result would be greater room for bilateral and plurilateral bargaining, but conducted within the umbrella of the multilateral system.

Continuity and Change in the World Trade Organization: Pluralism Past, Present, and Future

“…This critique centers on the apparent failure to manage China's behavior as a WTO member, as well as supposedly unfair trade practices of some other WTO members. 68 This critique was stated most loudly by the Trump administration, and was accompanied by measures such as blocking new Appellate Body appointments (eventually paralyzing the AB) 69 and imposing tariffs on grounds such as national security, which are widely viewed as spurious and illegal under WTO rules. 70 The Washington critique has two dimensions.…”

Geopolitical competition, globalisation and WTO reform

“…Since then, changes have occurred in what is understood by national security and the type and potential sources of threats to such security. It is evident that states today (and the public) understand ‘national security’ to include issues like cybersecurity to protect critical infrastructure such as telecom networks, pipelines or data networks (Shaffer, 2021). As the term ‘essential interests’ is broad, an amendment to Article XXI is not needed to clarify that such concerns can fall under Article XXI.…”

“…A common feature is that WTO committees and councils be used more to discuss trade concerns in their respective area (e.g. Hoekman, 2014; Pinchis‐Paulsen, 2022; Shaffer, 2021). Some WTO bodies do much more of this than others.…”

“…SeeKurtz and Baihua (2021).32 The same reasoning applies to recognising a major change in the environment relative to the 1950: today, threats to national security may originate in activities of non-state actors. As the relationship between states and such non-state actors often will be obscure, attributing behaviour of non-state actors to a state may be difficult to prove.33 See alsoLester and Manak (2020) Shaffer (2021). and Pinchis-Paulsen (2022) offer complementary arguments in favour of greater deliberation using extant WTO processes.34 Discussion of trade concerns is increasing in other WTO bodies Wolfe (2020).…”

Mandatory Binding Dispute Resolution in the Base Erosion and Profit Shifting (Beps) Two Pillar Solution

“…While some of these concerns were shared by other members, 116 the scholarly consensus is that the United States' complaints were overstated if not outright wrong. 117 The United States has declined, and continues to decline as of mid-2022, to engage with proposals from other members that would be the restoration of the Appellate Body. 118 The recent statements of the United States in the WTO indicate that it is not ready to agree to a restoration of binding dispute settlement, notwithstanding United States participation in informal consultations about WTO reform.…”