China Gets a Pass from the WTO while the U.S. Suffers
China seems to be the WTO’s favored child. The communist nation has been far from a model citizen since joining the WTO, continuing its unfair trade practices and currency manipulation while countries like the U.S. are forced to bow to the WTO’s will or face stiff consequences. Despite its anti-competitive behavior the WTO has continued to praise China’s performance. Officials have applauded China’s “progress” towards a more capitalist and open economy, while other countries pay the price.
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.