International Trade Between U.S and China Research Assignment

International Trade Between U.S and China
Name:
Institute of Affiliation:
Course code:
Abstract
The paper seeks to address the relationship between China and U.S. it explains the significant progress that has been made by the two countries. The paper also tries to give an insight of how China took good use of the U.S trade law s to supply their commodities to U.S. it also explains the decisions that the government considered to solve the issues. It describes the trade between China and U.S and the world trade organization status of U.S and China. It puts much emphasis on the bilateral agreements that were put in place to boost trade.it also offers an insight into the emergence of misunderstanding of the two countries.
Introduction
China and U.S play critical roles in international trade. International trade refers to the exchange of goods and services between nations. Trade improves the gross domestic product (GDP) of countries involved. For the last 15-20 years, China economy has grown tremendously. When it got entry into the world trade organization in 2001, the rate of export of its commodities rose. Rapid growth has resulted in adverse effects such as wage losses to the manufacturing industries in U.S. Despite creating such fracas; the beneficiary has been neighboring countries who depend on cheap imported commodities.[The China's WTO accession documents are The Protocol of China's accession to the WTO (WT/L/432), the Working Party Report (WT/ACC/CHN/49) and the Annexes containing market access commitments (WT/ACC/CHN/49/Add.2). Concerning the Working Party Report, the commitments listed in paragraph 34]
The entry of China into the world trade organization gave room in trade policy-making and lobbying. There were judicial adjudication and reinforcement in world trade organization disputes that led to product-specific mobilization. This resulted in an understanding that made the two countries to create a standard policy that would allow room for expansive growth. The common goal for the growth of trade in China was to lower the tariff on the locally produced commodities.
Discussion
The financial crisis began in 2008 when policy and economic analysts realized there was a high risk in trade activities between China and U.S that could spur trade war. Different researchers cite that trade wars may have been from issues of protectionism. On a report by the WTO (2014) on G-20 measures, different measures have been used from 2008-2012. U.S protectionists have put little effort to address the problem of trade between China, and U.S. Policymakers realized that the bilateral talks and policy prevention mechanism between China and U.S had dampened.[Palgrave Macmi Busch, M. L., & Levy, P. I. (2010). The case against a China currency case. The American, 7. Allan US.] [Cheung, Yin-Wong, Menzie D. Chinn and Eiji Fujii, 2010a, “China’s Current Account and Exchange Rate,” Chapter 9, pp. 231-271, China's Growing Role in World Tradition]
Despite the policy makers initiating cohesion, they predicted that jurisprudence and security are among the critical elements of the WTO agreement. WTO commitments aimed at cornering the problems between the two countries. This is by dealing with the tariff barrier that had been initiated long before China ascended to be part of WTO. As an ultimate way of enhancing peace and security WTO in collaboration with relevant stakeholders has given room to the possibility of increasing tariffs.[WTO, Protocol of accession of the People's Republic of China to the WTO (from now on Protocol), Document WT/L/432. Available: In November 2001, during the fourth WTO ministerial conference in Doha, the text of the agreement for China's entry into the WTO was approved by consensus, so China has been an official member of the WTO since 11th December 2001. For a further description of the GATT/WTO negotiations]
WTO agreement was a measure of sustenance. It was to act as a way of encouraging flexibility and cooperation among the affected countries. There was a fundamental question of whether this would offer a long-term solution to the conflicts between the two countries.It is essential to determine the determinants of policy uncertainty in the trade sector.
The policy uncertainties enabled exporters to take risks associated with increased barriers to trade. It shows that when there is a market entry in any sector, there is a probability of gaps between the bound and applied tariff rates. They estimate that a reduction in policy structure has resulted in 22 percent of China's export growth to the U.S following its WTO accession in the global trade sector.
Little study has been done to determine the variability of tariffs which may have an impact on the export-import tariff ability between nations. The tariffs have not highly factored the agricultural sector. This has resulted in policy volatility. Most barriers that are being used have taken the form of specific duties and quotas. There can be a change in price with little consideration to prices. Trade policy analysis is evaluated as a policy uncertainty.
China trade and EU
Since China joined WTO in 2001, it has been involved in international trade without addressing the critical issues which has led to a misunderstanding. It has faced significant problems that are yet to be addressed. They include lack of transparency, issues concerning non-tariff measures, policies which regulate the operations of foreign companies and intellectual property rights. According to the EU report (2016), they have come up with a clear strategy to ensure that the trade affairs are fair. China has primarily invested in all-round trade up to the energy level where they involved in energy production[Thorbecke, Willem, 2014, "China-US Trade: A Global Outlier" manuscript, Research Institute of Economy, Trade, and Industry] [Sylvia Ostry, ‘China and WTO: the Transparency Issue,' cit. At 12; Sylvia Ostry, ‘WTO Membership for China: To Be and Not to Be: Is that the Answer?', in Patrick Grady and Andrew Sharpe (eds.), The State of Economics in Canada, Festschrift in Honor of David Slater, John Deutsch Institute for the Study of Economic Policy, McGill-Queen's University Press, Montreal and Kingston, London, Ithaca 2001 at 5. Available: (Last visited: 01-03-06).]
Some of the policies implemented include setting a trade agenda, promoting reciprocity and giving a fair room to the market sector. The EU body has called on the Chinese government to have comprehensive agreement on any investment that it is involved in. This is creating a multi-lateral environment for all the stakeholders.
China has invested extensively in all parts of the world. It has a strategic plan that ensures all the challenges they face are implemented by 2020(EU-China 2020 Strategic Agenda for cooperation.) there has been a public outcry by many international organs on how china conducts its activities.EU on its parts has given a notice to China to correct the issues addressed. Some of the issues noticed by EU are economic, human, social and environmental. There is persistent monitoring by EU to China,
Recently there was an EU-China summit, that was majorly called to address the issues that affect international trade between China, EU and other foreign countries such as U.S. since then they have advocated that shall be frequent international meeting and international bodies. This will be with the aim of finding emerging issues.It will give room for discussions on the bilateral improvement of trade and finding solutions.
China’s accession to WTO
It entered WTO as a result of the comfortable completion of the multilateral phase of accession negotiations. Despite its high speed of international trade, it has caused some countries harm. Having made progress in the international sector, it has blamed WTO of under-representing the developing countries. This has made them bid a complaint in the organization needing restructuring and adjustments in the open government.
Implications of China's entry into WTO
Since its entry in WTO, there has been much friction between it with U.S. Despite all the issues; China has grown progressively over the years that up to date their merchandises are universally recognized. The entry of China has reduced import quotas and licensing requirements. As a result of this, there has been an increase in export duty to the protected goods.
The entry of China in WTO widened the trade deficit between them and the U.S. Trade deficit is determined by macroeconomic components such as national savings and investment rates. When savings rate rises, there is an increase in the investment rate. U.S has used the increase in the currency to finance trade deficit.[Yu, Peter K., Intellectual Property, Economic Development, and the China Puzzle (2007). Intellectual Property, Trade, and Development: Strategies to Optimize Economic Development in a TRIPs Plus Era, Daniel J. Gervais, ed., 1st edn, Oxford University Press, pp. 173-220, 2017; Michigan State University Legal Studies Research Paper No. 04-23. Available at SSRN: https://ssrn.com/abstract=978301]
U. S signed a pact with the textile industry in 1980.China entered the WTO when the deal had been approved and thus it is countering the U.S textile industry. This is through a production of cheaply available textile which it can supply to the neighboring countries. The availability of cheap textile will result in high imports by the citizens of U.S. it has waited for the contract signed to expire so that it sells the textile products across the globe.
China's legislative body has amended various domestic laws involving trademarks and copyright. This is with the aim of improving trade within their territories.it is in the best interest of complying with different obligations. This can foster long-term economic objectives. U.S and China friction will not end anytime soon. Though most of the achievements being done by U.S are viewed as negative by U.S, some of them are very vital to the U.S economy. Americans firms that are located internationally will benefit from China’s revolution competitively. This will increase market access leading to continued growth and low price inflation in the United States.[Mitchener, K. J., & Yan, S. (2014). Globalization, trade, and wages: What does history tell us about China?. International Economic Review, 55(1), 131-168. policy, 105, 256-262.] [Weil, S. (2017). Trade Barriers for Foreign Business in China. In Lobbying and Foreign Interests in Chinese Politics (pp. 41-51).]
China –U. S relationship
The trade relation between U.S-China is as a result of bilateral ties between the two largely developed nations. The two countries exist in different conditions and stages of working thus their market economy is different. The bilateral ties between the countries have provided trade relations. The consensus between APEC and G 20 should be significantly factored in the trade treaties.
China and US carry much trade information and ideas, and thus in case of any problem, the two countries need understanding. Globalization is one of the key pillars that differentiates the trade sector of the two countries from other nations. These are countries that produce quality products based the ability to have the best taskforce. As a result, economic cooperation should be highly advocated among them. China holds a fundamental regard in the industrial sector by enhancing high quality a tentatively low-cost staff.[Thorbecke, Willem, 2014, "China-US Trade: A Global Outlier" manuscript, Research Institute of Economy, Trade, and Industry]
Contrary to U.S who have highly vested their prowess in innovation, technology, and quality high-end products.it is in the best regard that the two dominant countries in technology, the industrial revolution, and global trade should be together. They need to work hand in hand to ensure there are sustainability and promotion of their products. A united working organization grows to higher limits.[Matsushita, M., Schoenbaum, T. J., Mavroidis, P. C., & Hahn, M. (2015). The World Trade Organization: law, practice, and policy. Oxford University Press.]
World trade organization and trade volatility
Continued international trade among the world trade organizations especially China and U.S, there is uncertainty in trade openness. The different mechanism has been adopted to facilitate expansive trade. It is realized that the inter-border trade has gradually dropped because of trade volatility. Trade policies reduce price volatility and create a shared understanding among the involved countries.[United States Trade Representative, 2002 Report to Congress on China’s WTO Compliance, 11 December 2002, Washington DC 2002, p. 49.]
A volatile economy cannot enhance multi-lateral trade system. The existence of the world trade pacts created a common understanding. There was policy transparency that promoted an agreement among the members. The existence crisis-dispute policies also solved the cases of bilateral trade between the WTO countries.
China’s protocol into WTO
China had much promise in the trade sector, and thus when it had an opportunity to be part of WTO, it was evaluated based on the following:
* Transparency principles and the rule of law
In China, protocol 21 of China accession to WTO states that its plain truth that transparency shapes the rule of law. Some of the widely related protocol is that there should be procedural openness in decision making and the non-discrimination principle. The agreement protocol would, therefore, allow for customs territory of China without disqualification. The local governments should legislate and acquaint themselves with the current laws in conformity with the obligations by China's central government. (Houston Journal of International Law at 527–546).[Morrison, W. M. (2013). China's economic rise: history, trends, challenges, and implications for the United States. Current Politics and Economics of Northern and Western Asia, 22(4), 461.]
The implementation of an appropriate mechanism through an analysis of laws are administered showed that the Chinese legal system adopted head rules which are the guideline for general rules. Despite having conflicting results, the problem has been realized in the promulgated rules and regulations of the central government. The local rules applied sometimes seem unstandardized, and thus it makes the leaders feel threatened and therefore they highly oppose such moves that are documented in the WTO accession documents. (Legal Flexibility and Foreign Investment Regulation in China, 1995)[Mary Amiti, Mi Dai, Robert C. Feenstra, & John Romalis (2017) How united states economy from the entry of China to WTO. working paper series]
Art...