China's trade practices may not be unfair after all

By Daniel Gros

Published: Fri 7 Dec 2018, 8:25 PM

Last updated: Fri 7 Dec 2018, 10:26 PM

The temporary truce reached by US President Donald Trump and his Chinese counterpart Xi Jinping at the just-concluded G20 meeting in Buenos Aires should give both sides some time to reflect on the issues in question. And the most fundamental of those issues is whether American grievances against China - shared by many of the advanced economies - are justified.
To be sure, unilateral US measures are indefensible under global trading rules. But some pushback conceivably could be warranted if the advanced economies - which have already created an informal contact group of "China losers," including representatives of the European Union, Japan, and the United States - are right that China has been engaging in unfair trading practices. For the US, the biggest concern seems to be so-called forced technology transfer. Tariffs, for example, are not cited.
With its accession to the World Trade Organization in 2001, China was forced to reduce its tariff protections by one-half. In the ensuing years, the average tariff rate applied by China has continued to fall, and now stands at less than 4%, though China does maintain an unusually high number of tariff peaks (that is, high tariffs for very limited categories of product).
Of course, tariffs are far from the only way to create obstacles to trade. Indeed, in many ways, tariffs are yesterday's problem - at least they were, until Trump dusted them off as a weapon for his trade war. - Project Syndicate

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