Commentary: Accusing China of ‘unreasonable’ trade acts lacks logic
By Wang Tao
The US has initiated Section 301 investigations against China for six times in April 1991, October 1991, June 1994, April 1996, October 2010 and August 2017, respectively.
Except the 2nd and 5th one, the rest four investigations cited the so-called “theft of intellectual property” as excuses.
The first five investigations all ended up with solutions after consultations and negotiations as the US had made clear the specific products and industries it targeted at, its demands as well as the agreements and laws it relied upon.
Though the 2nd investigations, slightly different with the other four, targeted at a wider range, it focused on a specific chain of market access, to which a solution was finally found after talks.
But in the latest Section 301 investigations, the US raised boundless questions and appeals by shooting fire at all the trade and commercial fields of China.
Asking Beijing to reduce US trade deficit with China by $100 billion in a year at first and later on by $200 billion, Washington’s demands are absolutely irresponsible and unreasonable.
Legal basis matters in launching such investigations. The Office of the United States Trade Representative (USTR) claimed that the investigation, brought under Section 301 of the Trade Act of 1974, sets out three categories of conducts: (i) trade agreement violations; (ii) acts, policies or practices that are unjustifiable (defined as those that are inconsistent with US international legal rights) and that burden or restrict US Commerce; and (iii) acts, policies or practices that are unreasonable or discriminatory and that burden or restrict US Commerce.
“The third category of conduct is most relevant to this investigation,” the office added at the beginning of its report.
The legal basis for the first category is bilateral or multilateral agreements and the second category can be defined as those inconsistent with the US laws. But the third category is purely based on the so-called “burdens or restrictions” the US commerce has received.
Launching an investigation because of the third category of conducts sounds reasonable to some extent, but its application should be confined to new circumstances and problems beyond the reach of the international trade agreement and the American laws. Under no circumstance should it become a basis to solve all issues.
What the Donald Trump administration did was putting aside all international trade agreements and its own domestic laws and overturning the trade order of China and even the whole world.
But Trump doesn’t have a new system to replace the international trade agreements and US laws for policy-making. In fact, his administration is doing nothing but using willpower and tactics to solve problems.
The US has made the latest investigations so complicated and disturbing because it didn’t launch the latest one based on bilateral or multilateral agreements or US laws like it did with the previous five.
A comparison of the previous investigation documents and the recent investigation report points to the reasons why the latest Section 301 investigations are so disturbing.
Patience is needed to read and analyze the 215-page report. If excluding those unfair and unjustifiable words, the report turns to be a summary of China’s experience in promoting technological and trade development through fair and legal activities.
The so-called abundant “evidence” to the alleged technology transfer and intellectual property theft turns out to indicate the process of how Chinese government and enterprises learning from developed countries especially the US and how they turned the knowledge into Chinese experience through strict execution.
China’s advantage in competition lies in the diligence of the Chinese people and their thorough implementation of the management experience learned from the US and Japan.
The report didn’t reveal the fact that Chinese scientific and technical personnel grow faster than their American peers because they spend much longer on work than the latter. It didn’t mention the fact that the Chinese people are better than their American peers at practicing the management theories invented by the Americans.
“Only ways of succeeding and no excuses for failing” is what the US follows in business management. However, some business chiefs are still reaching out to the US Congress for subsidies by corporate jets even when their companies are in bankruptcy proceedings.
Both facing challenges, China is introspecting on itself, while the US administration is taking the lead in finding excuses and passing the buck.
The report’s accusations on China are completely illogical. The clause “D. China’s Acts, Policies, and Practices Are Unreasonable” in part “II. China’s Unfair Technology Transfer Regime for US Companies in China” is one such example, which is nothing but a repetition on the definition of “unreasonable” under the Section 301.
The definition can be interpreted as that China is to be blamed or China has taken unreasonable actions as long as US enterprises are losing the competition.
Therefore, the Section 301 investigation report is exactly a government-led act of finding excuses, which proves that the US management theories and philosophies just sound nicer than they actually are.
(By Wang Tao, a guest professor at Minzu University of China.)
