China’s trade surpluses and use of interventionist and trade-distorting economic policies has contributed to growing trade friction with the United States and EU over a number of issues, including China’s refusal to allow its currency to appreciate to market levels, its relatively poor record on enforcing intellectual property rights, and its extensive use of industrial policies and discriminatory government procurement policies to subsidize and protect domestic Chinese firms at the expense of foreign companies. These interventionist policies, according to both the United States and European Chambers of Commerce, have become more discriminatory towards foreign companies over the past several years, making it more difficult to export to China and to do business in China on a non-discriminatory basis.37
U.S. and EU trade officials have utilized two main approaches for addressing problems posed by Chinese policies and barriers that skew the playing field for trade and investment. The first has been to seek Chinese concessions during high-level summitry via the U.S.-China Strategic and Economic Dialogue (S&ED) and the Joint Commission on Commerce and Trade (JCCT) and, in the case of the EU, the EU-China High-Level Economic and Trade Dialogue. The second has been to bring disputes to the World Trade Organization, which China joined in 2001, when it is deemed that China does not comply with its WTO obligations.38
Given the potential clout that China’s two most important trading partners possess and the fact that the Chinese government does appear to respect economic strength, greater U.S.-EU cooperation arguably could increase the chances for successful outcomes through both dialogue and WTO litigation. Enhanced U.S.-EU consultation and agreement on common policy approaches to issues discussed in bilateral dialogues arguably could facilitate pragmatic solutions and more favorable results if China’s leaders understood that there was a united front on issues of
common U.S. and EU concerns. In the past, U.S. trade officials have often felt that their European counterparts have been less vocal in expressing concern and dissatisfaction with Chinese trade practices because they thought the United States would do the “heavy lifting” ( i.e., open the market) and they would then benefit from China’s concessions. Understandably, given the very different experiences member states have in trading with China, the formulation of an EU-wide position is often difficult. From China’s perspective, a fragmented, uncoordinated, and divided
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