While president xi continually affirms chinas

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While President Xi continually affirms China’s commitment to the multilateral rules-based trading framework, China continues to renege on its WTO commitments. Moreover, China’s economic model makes it difficult to use the WTO and its dispute settlement system to challenge non-com- pliance. For instance, state control over public and private businesses makes unclear what is a public body and what is private. In addition, the state’s role in the judicial and administrative system, including use of informal notices and verbal demands, undermines the ability to
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The US-China economic relationship: A comprehensive approach 16 show that a WTO inconsistent measure exists. 62 More broadly, China’s industrial policy—which distort the playing field in favor of Chinese companies—is at odds with most WTO members’ market-based systems. Given these challenges, there is a real question as to the capacity of the WTO to respond to the China challenge. While the WTO is not able to address all the issues that China poses, in the context of a comprehensive approach to the China challenge, the WTO remains central. The WTO is the only global set of trade rules, which both reflect core U.S. values, such as non-dis- crimination, transparency and rule of law, and form a baseline on which to build global support to critique and push back against Chinese economic practices. As a recent RAND report noted, the key challenge to the U.S. may come from efforts by China to elevate the viability and legitimacy of its authoritarian model and “[gain] veto authority over other nations’ economic, diplomatic and security decisions.” Then efforts to bolster the value of largely U.S.-generated rules, norms, and international institutions will be a key common point of reference and baseline for the U.S. and other countries seeking to counter China’s economic and governance models. Thus, despite the organization’s challenges, the WTO can continue to play a key role in address- ing the China challenge if the U.S. provides leadership for such a path forward. In this light, any outcome in U.S.-China bilateral trade negotiations that achieves short-term wins, such as more trade with China, but does so in ways that undermine WTO legitimacy, would come at an enormous strategic cost. As discussed below, positive, long-term outcomes for the U.S.-China relationship should support and strengthen the WTO and the rules based system. 62 Wu, 300. 63 U.S. Department of Defense, “Assessment on U.S. Defense Implications of China’s Expanding Global Access”. December 2018. 64 United States Trade Representative. 2018 Report to Congress on China’s WTO Compliance. Making progress in U.S.-China trade relations The current abiding challenge for U.S.-China relations is to avoid fostering a relationship shaped only by competition and to identify where mutually beneficial outcomes are possible. The trade and investment front is one area where such progress may be possible. As the U.S. Department
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