Ambassador Shea’s Statement at the WTO Trade Policy Review of the United States – Day 2

TPR logoWTO Trade Policy Review of the United States
Day 2

STATEMENT OF AMBASSADOR DENNIS SHEA,
U.S. PERMANENT REPRESENTATIVE

Geneva, 19 December 2018

Thank you and good morning, everyone.

Thank you for joining us again today for the continuation of this 14thTrade Policy Review of the United States.  We appreciated the observations offered by more than 60 Members on the first day of this review, many of which we found constructive.

This morning I’d like to respond briefly to several themes, and a few comments in particular.

We appreciated the acknowledgement from so many that the United States maintains one of the most open economies in the world.  Our average applied tariff is low and nearly 70 percent of all imports into the United States in 2017 entered duty-free.  U.S. service markets are open to foreign providers, and we protect the intellectual property of domestic and foreign innovators and creators alike.  Our foreign investment regime is open and predictable.  These are hallmarks of stability and openness, as one Member put it.

So, too, is the United States’ standards development system, which is inclusive and transparent, allows broad stakeholder participation, and adheres to the principles contained in the WTO TBT Committee Decision on International Standards.  We strongly encourage all Members, particularly our friends in Europe, to follow the TBT Committee Decision.

We were reminded by many Members that the United States is a key engine for global economic growth.  The United States is in its ninth consecutive year of economic expansion, and, in 2017, we were the recipient of 19 percent of global goods and services exports, excluding U.S. exports and intra-EU exports.  Further, 78 countries had the United States as their first, second, or third largest export partner.

We were gratified by Members’ widespread recognition of our active and indispensable engagement in every facet of the WTO.  Many Members noted U.S. leadership on a proposal to ensure that Members fulfill their notification obligations.  We are encouraged that they recognize the problem and share our objectives, and we look forward to working with our co-sponsors and other Members on this important element of WTO reform.  We also welcomed Members’ recognition of the importance of our technical assistance and capacity building in implementing the Trade Facilitation Agreement.

We appreciate the warm words from a number of Members regarding our trade preference programs and the many forms of assistance provided by the United States, from trade-related capacity-building before and after WTO accession, to blood and treasure, as one Member said, in the hope of a better future. The United States undertakes these efforts because we believe in the benefits that can accrue to Members from fully implementing the global trade rules as they were negotiated by Members.

Not surprisingly, we disagree strongly with certain assertions and the premise of some comments on Monday.

We heard from one Member that the United States is at the epicenter of the deep crisis in the multilateral trading system.  This Member’s explanation revealed a misread of the crisis and its root causes.  The crisis is caused by the fundamental incompatibility of China’s trade-distorting, non-market economic regime with an open, transparent, and predictable international trading system.  It is compounded by Members’ collective failure over many years to address this problem.

In one respect, the United States is at the epicenter of the crisis – we are, once again, embracing the burdens of leadership to respond to it.  This is necessary so that stability and openness can be preserved.

A number of Members raised concerns about increased usage of U.S. trade remedy procedures during the period under review.  From our perspective, these Members confound the remedy with a deeper and more worrying problem that the remedy aims to address.  Injurious dumping and subsidization – and the effects that the increasing prevalence of these practices have on the trading system – are problems that should concern us all.

It is important to maintain some perspective.  While the U.S. accounted for 17% of all initiated antidumping investigations during the period of review, 27% of all such investigations – more than one quarter – were initiated in response to trade from one Member – China.

To the extent Members are concerned about the trends they observe, they should consider what is actually causing the trend – state-led, mercantilist activity.

On Monday, China quoted the movie Spiderman, stating “With great power comes great responsibility.” China noted that recent measures taken by the United States suggest we are acting irresponsibly. China also opined that the United States needs to implement domestic initiatives to help our people adjust to economic globalization.

Strip away the jargon, and here is China’s argument: China will force technology transfer, and outright steal it when it sees fit, to become the preeminent producer, particularly in strategic industries.  China will subsidize and maintain excess capacity in multiple industries, forcing producers in other economies to shut down.  China will dump its products on our markets, claiming that all is okay because our consumers pay a little less.  If the United States musters a response, we are abusing our power and acting irresponsibly.  Rather, we should resign ourselves to nursing the wounds inflicted on our citizens.

This is not acceptable.

We also note the deep irony in China’s reference to power and responsibility.  China – the world’s largest exporter and an economic heavyweight, insists on being treated in the WTO like a much poorer Member while maintaining a regime that is fundamentally incompatible with the rules and principles of this organization. China apparently believes its power comes with little or no responsibility.  Rest assured, this is a conversation that we will pick up in the near future.

Madam Chair, the United States approaches the end of this review with sincere appreciation for the serious engagement of Members during this week, and we are grateful for the role of the Secretariat, the Chair, and our discussant in shepherding us through this process.

In closing, I would like to take the opportunity to wish all my colleagues a joyous and restful holiday season.

Thank you.