Congress is ignoring ‘reciprocity’ in US-China economic relations

The House Select Committee on the Communist Party of China needs to expand its policy recommendations to address the fundamental and long-standing challenge of reciprocity.

The idea is simple. There is no way Chinese commercial interests can do anything in the United States that American companies cannot do in China.And that the idea is not new. U.S. companies in China have long advocated reciprocity, but the idea has not taken hold because it is complex and costly to implement.

Congressman Mike Gallagher (R-Wis.) selects committee chair. Recognizes the importance of reciprocity In US-China trade relations. witness examination Reinforced the need for mutual treatment in the early stages Committee hearing It was a hot topic in mid-2023, but it disappeared from view. While reciprocity is an implicit theme; Committee’s final recommendationand did not specifically recommend establishing an interagency mechanism to develop reciprocity policies.

US and China commercial cold war And China’s clear intentions are Revive the economy by exporting excess production capacity overseas We emphasize the need to impose reciprocity now. On the other hand, TikTok’s claim is that The First Amendment guarantees the right to do business In the US, it’s a stark contrast. China’s “national security” policy Blocks dozens of American social media and other websites. Adding hypocritical insult to injury is Claims made by the Chinese Ministry of Foreign Affairs He said the “robbery logic” of the pending TikTok bill “lies on the wrong side of the principles of fair competition and international trade rules.”

If the committee, or other policymakers in Congress or the Biden administration, accept the reciprocity challenge, it will be important to identify priorities for action. The top priority is to ensure that China can only sell goods and services in the United States that Americans can sell in China. The conditions for doing business, such as the endless administrative approvals and licenses that hinder American companies in China, should be replicated as much as possible.

All of this is clearly easier said than done, as the bureaucracies of the United States and China are vastly different, and in many cases, direct regulatory similarities may not exist. However, this effort could be guided by an annual white paper on China trade barriers. American and european chamber of commerce In Beijing in 2012 U.S. Chamber of Commerce Survey Analyzing China’s protectionist framework.

A priority for reciprocity abroad will help counter Chinese claims. “Developing countries” with special trading privileges. China has little in common with developing countries in the area of ​​trade, as it is essentially a colonial power that imports raw materials and exports manufactured goods, making huge profits.

The term “reciprocity” is featured in much of former President Donald Trump’s trade rhetoric, but his concept differs from the one advocated in some committee hearings. President Trump advocates reciprocity on tariffsMeanwhile, committee hearings focused on discriminatory patterns in China’s trade actions. The wisdom of Mr. Trump’s proposed tariffs is beyond the scope of this essay, but Mr. Trump’s mere use of the word “reciprocity” suggests that select committee members may be concerned about his priorities for confronting China’s trade practices and policies. The meeting should not be distracted.

China’s reaction to America’s policy of imposing reciprocity will be predictably hostile and emotional. Accusations of “containment” These are typical Chinese reactions to US policies that displease China and should therefore be ignored.

New wrinkles in China policy, officials say announced Last year, all barriers to foreign participation in China’s manufacturing industry were removed. These claims not only ignore the reality of China’s official and unofficial approval practices, but also introduce new national security regulations that prohibit basic market research, due diligence, and other routine business practices. It is misleading because it also ignores the limitations of No one should be fooled by future Chinese propaganda that restrictions on China’s intention to export its unprecedented excess capacity are unwarranted. China’s manufacturing industry is open to foreigners.

It is clear that reciprocity needs to be emphasized in America’s trade toolkit, but where does it fit in the American bureaucracy? The select committee has a wide range of recommendations for action on all issues on the US-China agenda. It should have had the authority to recommend a coordinated interagency effort to ultimately impose trade reciprocity on China.

Fortunately, this oversight can still be corrected. Although the Committee could assign this task to any of the various federal agencies participating in the trade field, only the Department of Commerce has sufficient resources and expertise. Accordingly, the Select Committee should recommend the creation of a new program office within the Department of Commerce that will be responsible for developing, coordinating, tracking, and implementing intergovernmental reciprocity policies.

Jeff Moon is a China trade consultant and former assistant U.S. trade representative for China, a diplomat at the State Department, and a business executive who has held China-related positions.