United States China Trade Agreement

The terrain of the world trading system is shifting as countries in Asia, Europe, and North America negotiate new trade agreements. However, none of these talks include both China and the United States, the two biggest economies in the world. In this pathbreaking study, C. Fred Bergsten, Gary Clyde Hufbauer, and Sean Miner argue that China and the United States would benefit substantially from a bilateral free trade and investment accord. In the process, they contend, each country would also achieve progress in addressing its internal economic challenges, such as the low saving rate in the United States. Achieving greater trade and investment integration could be accomplished with one comprehensive effort or through step-by-step negotiations over key issues. The authors call on the United States to seek liberalization of China's services sector as vital to securing an agreement, and they explain that such contentious matters as cyber espionage and currency manipulation be handled through parallel negotiations rather than in the agreement itself. This is an important study of the benefits and difficulties of a complex matter that could yield dividends to the two economies and help stabilize the security and well-being of the rest of the world.

China's entry into the World Trade Organization (WTO) in 2001 was heralded as historic, and for good reason: the world's most populous nation was joining the rule-based system that has governed international commerce since World War II. But the full ramifications of that event are only now becoming apparent, as the Chinese economic juggernaut has evolved in unanticipated and profoundly troublesome ways. In this book, journalist Paul Blustein chronicles the contentious process resulting in China's WTO membership and the transformative changes that followed, both good and bad – for China, for its trading partners, and for the global trading system as a whole. The book recounts how China opened its markets and underwent far-reaching reforms that fuelled its economic takeoff, but then adopted policies – a cheap currency and heavy-handed state intervention – that unfairly disadvantaged foreign competitors and circumvented WTO rules. Events took a potentially catastrophic turn in 2018 with the eruption of a trade war between China and the United States, which has brought the trading system to a breaking point. Regardless of how the latest confrontation unfolds, the world will be grappling for decades with the challenges posed by China Inc.

Witnesses: John J. Sweeney, AFL-CIO; George M. C. Fisher, Eastman Kodak Co. and Business Coalition for U.S.-China Trade; Harold "Terry" McGraw III, McGraw-Hill Companies and Emergency Committee for Amer. Trade; Frederick W. Smith, FDX Corp.; Robert A. Kapp, U.S.-China Business Council; Jack Valenti, Motion Picture Assoc. of Amer., Inc.; Sy Sternberg, N.Y. Life Insurance Co.; Neil E. Gambow, Jr., Post Glover Resistors Inc.; Steve Van Andel, U.S. Chamber of Commerce; George David, United Technologies Corp. and Business Coalition for U.S.-China Trade; and Steve Van Andel, Amway Corp. and U.S. Chamber of Commerce.