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Brown: WTO policies, China hurting U.S. workers

On a call with reporters on Wednesday, U.S. Sen. Sherrod Brown, D-Ohio, spoke out against the World Trade Organization and China’s role in it.

He said a recent report from the Alliance for American Manufacturing shows that the American trade system as it is now does not work for American workers.

He said the World Trade Organization was set up to create clear rules for trade and to enforce those rules when WTO members break them. He added the WTO only selectively enforces the rules, however, and allows rampant trade violations to go unchecked.

“Instead of enforcing a level playing field, WTO has cracked down on U.S. regulations meant to fight back against illegal competition called trade remedy laws,” Brown said. “And it is the American worker that is paying the price.”

He said one of the basics of the WTO is when a country illegally prices its goods under market price, also called dumping; countries should be able to take measures to protect their companies.

“The WTO has not preserved countries’ ability to fight back against unfair trade, it has failed to make sure all of its members follow the rules,” Brown said.

He said China is a perfect example of this. China joined the WTO in 2001, which Brown opposed. He said China was supposed to transition to a market economy and would reform its state-owned companies and trade policies, which distort international trade.

“But China has never cleaned up its act and the WTO has done nothing about it,” Brown said, adding that state-owned steel companies dump steel products into the U.S. and puts American steel workers out of jobs. He said the WTO undermines the tools that American companies need to defend their businesses. He said the WTO has made decision after decision that has hurt American companies.

China has filed a case with the WTO that it should be treated as having a market economy “but this couldn’t be further from the truth,” Brown said. “The Chinese government puts its thumb on the scales for its companies, often ones controlled, yes, by the Chinese government. That’s hardly a free market.”

Brown said that if China wins its case it would dramatically affect the fight against dumping.

Scott Paul, president of the Alliance for American Manufacturing, said Brown and his colleagues are very right to be concerned about the past practices and the potential damage caused by the WTO’s overreach. He said there has been  “hyperventilation” about a possible trade war and the sanctity of the WTO, but considers it overblown.

“If anything, the WTO has overreached it’s authority and as the report shows, has targeted the United States,” Paul said.

He said it has become clear to him over the past decade that the WTO has already declared a trade war on the United States and in some ways, so has China. He said that the WTO has become guided by an overreaching philosophy that goes beyond its mandate rather than the rule of law.

“I believe all options should be on the table including reforms Senator Brown has called for,” Paul said. “I do believe it is time for the administration to move beyond promises on trade and look at specific actions that could be taken to strengthen our domestic economy to defend our manufacturing workers against unfair competition.”

Elizabeth Drake, an international trade attorney and a partner at Stewart & Stewart, helped co-author a report about the WTO and trade. She said that nations have the right to impose anti-dumping and countervailing duties on unfairly traded imports.

“In fact, dumping is to be condemned by the WTO agreements but yet the WTO is not living up to those principles.”

She said the U.S. is targeted in court cases five times more than any of the other 163 countries in the WTO.

She said her report goes through those court cases and has found that the U.S. had to change policies, duties and laws in order to comply with the WTO despite what Congress intended when they passed the legislation.

She said many of the WTO policies were modeled after U.S. policies so it would seem difficult for the U.S. to lose nine out of ten times when cases goes to court.

She said that there have been complaints from other countries and even former WTO officials that the WTO is overstepping its mandates.
Brown said he wrote to President Donald Trump that there needs to be a reset with the WTO, that they need to fight currency manipulation and crackdown on China’s unfair trade practices.

“We should renegotiate China’s WTO commitments, we should force them to actually meet them,” Brown said, adding that if they can’t, they need to find a way to go around the WTO to protect American jobs. Brown said he has been encouraged to hear that the White House is considering that.