Introduction
The World Trade Organization (WTO) was founded in 1995 to promote free trade and economic progress by negotiating trade laws, resolving trade disputes, and providing a venue for negotiations. The WTO promotes worldwide trade and resolves trade disputes with 164 member countries. The US and China, the two most prominent WTO members, have had several trade and financial disputes. The two countries are disputing intellectual property and commerce at the WTO.
Importance of world trade to both the US and China
The WTO protects US international preferences. The US has defended its trade policy in the WTO. The US has regularly criticized China’s trade policies through the WTO’s dispute settlement mechanism. The US challenged Chinese export limits on rare earth metals, essential to cutting-edge technology. The US claimed China’s limitations breached WTO norms and hurt US enterprises. The WTO agreed with the US that China must lift export restrictions. The WTO promotes free trade and economic progress worldwide and resolves disputes for the US (Malkawi, 2019). The WTO has reduced trade barriers, including tariffs and quotas, helping US companies compete abroad. The Trans-Pacific and Transatlantic, Trade and Investment Partnership have been negotiated at the WTO and may widen US commercial markets. Additionally, the US asserts that the WTO is anti-American and ignores China’s unfair trade policies.
The US has criticized the WTO’s dispute settlement procedure as slow and ineffective for WTO rule infractions. The US has also accused China of currency manipulation, intellectual property theft, and other unfair trade tactics. China, too, relies on the WTO for economic progress. Since 2001, China has used the WTO’s rules and institutions to advance its trade objectives. China has challenged US trade policies via the WTO dispute settlement procedure. China appealed US steel anti-dumping measures, claiming WTO violations. China and the WTO ordered the US to lift its anti-dumping tariffs. The WTO has benefitted China by encouraging free trade and economic growth worldwide and settling conflicts (Lu et al., 2020). Chinese enterprises have grown thanks to WTO market access. The WTO’s solid legal framework for international business has also helped China attract foreign investment. Due to WTO intellectual property restrictions, foreign corporations have invested in China’s high-tech industry.
China has also criticized the WTO, saying industrialized nations control it and don’t address poor nations’ concerns. China also claims that the WTO’s dispute settlement procedure is skewed towards developing nations and excessively focused on procedural trade disputes (Bown & Keynes, 2020). Furthermore, the WTO has helped the US and China resolve trade conflicts and promote global economic growth. Despite their disagreements, both countries have used the WTO to advance their trade interests and safeguard their enterprises. The WTO could be more flawless, and there are real worries about its effectiveness and fairness, particularly in confronting China’s growth as a global economic force.
The WTO must address these concerns and adapt to the global economy. This might include improving the dispute settlement procedure, addressing poor countries’ concerns, and levelling the playing field. The US and China must overcome trade conflicts and build a more open and mutually beneficial business relationship under the WTO. If the US and China sign a bilateral investment treaty (BIT), their enterprises may be able to trade in each other’s marketplaces. A BIT could satisfy US and Chinese concerns about the WTO’s dispute settlement mechanism and IP protection. Due to the complexity of the issues, BIT discussions have taken years.
Conclusion
The WTO has helped reduce trade conflicts and improve global economic growth. However, China’s economic superpower status raises questions about the organization’s efficacy and objectivity. These issues must be resolved through WTO cooperation between the US and China. This requires teamwork. This might include seeking new trade agreements like a BIT to protect US and Chinese enterprises in each other’s marketplaces. The US and China can work together to keep the WTO crucial for international commerce and economic progress.
References
Bown, C. P., & Keynes, S. (2020, March 4). Why Trump Shot the Sheriffs: The End of WTO Dispute Settlement 1.0. Papers.ssrn.com. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3577935
Lu, J., Pan, X., & Xie, Z. (2020). Unity versus Collaboration: Construction of China’s Belt and Road Free Trade Agreement 2.0 Network. Pacific Economic Review, 25(2), 250–271. https://doi.org/10.1111/1468-0106.12323
Malkawi, B. H. (2019, May 30). Dispute Settlement in EU Free Trade Agreements with Arab Countries. Papers.ssrn.com. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3396256
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