Sino 301: How Congress Can Effectively Review Relations with China after WTO Accession

Abstract

With China a member of the World Trade Organization (WTO), Congress faces the challenge of determining what can take the place of its former "annual Most Favored Nation (MFN)" review. This review opened Congress as a forum for the American debate regarding its treatment of China, giving Congress the ability to implement non-MFN high tariff levels upon an adverse vote. WTO rules preclude Congress from threatening such action.

Recognizing the importance of an annual evaluation of China - a nation with both an increasing economy and mixed record on human rights - the author advocates a review process whereby conflicting viewpoints on China's trade and other practice may be heard. Building upon the existing "Section 301" of the Trade Adjustment Act, a system by which the United States can threaten trade sanctions against nations violating WTO legal obligations, the author suggests a system specifically tailored to address trade relationships with a transitional economy - a "Sino 301." This system of annual reviews would allow for open debates, and allow Congress to implement retaliatory sanctions against China for its noncompliance. By balancing the importance of trade relations with China against applicable U.S. rights, the author proposes a system that would continue to facilitate effective trade and other interactions with China after its WTO accession.

Keywords: Section 301, China, Human-rights, World Trade Organization, WTO, Most Favored Nation, trade-relations, Tiananmen Square, antidumping, State-Owned Enterprise, Trade Liberalization, United States Trade Representative, USTR, relations with China

JEL Classification: K19, K29, K33, K39