The WTO’s Double Standard
A former director of the World Trade Organization has stated that China’s presence in the WTO is both “essential” and “irreversible,” while applauding the steps the country has taken since joining. If this is representative of the low standards of conduct the WTO expects, it is all the more reason the U.S. needs to rid itself of its obligation to the WTO.
David Hartridge, who served as a director in the WTO for 18 years, praised China’s 10 year membership in the organization. While the United States has been criticized for every small measure it uses to protect its domestic industries, China has been graded on an extremely favorable curve. Despite China’s centrally controlled economy, officials like Hartridge have continually praised the country for the “progress” it is making toward a more open economy. Unfortunately, the period over which it has been making that progress has been very costly to the United States.
China’s period where it has transitioned from a command economy to a more capitalist economy has not happened in a vacuum. This transition, which is far from complete, has included the continued illegal subsidization of industries that has allowed the country to dump cheap goods in the United States. This has been devastating for a number of U.S. industries, including the steel industry, and in particular the fledgling U.S. solar industry.
China has built up market share in the solar industry by subsidizing its solar manufacturers in ways the United States would never be allowed to under WTO rules. Chinese solar manufacturer Suntech Power Holdings has built market share by dumping solar panels into the U.S. market at less than cost. This business practice is only viable due to the incredibly favorable terms provided by the Chinese government and it has made it nearly impossible for solar companies in the U.S. to compete.
If China’s presence in the WTO is inevitable and its anti-competitive behavior is praised, the United States needs to ask itself whether it wants to be part of an organization that has such blatant double standards. While China’s membership has been very productive in flooding the world with its cheap exports, it has done nothing to help U.S. industries create jobs. Without good jobs, Americans won’t be able to buy even the cheapest foreign imports. That should be the litmus test for determining if the U.S. should continue to pursue this membership. Given the results, the U.S. needs to rid itself of its WTO obligation as soon as possible.
