The US trade agency has opined that China will not comply with the new World Trade Organization rules.
Since the US accused China of unfair trade practices, both countries have been in talks to see how they can end their ongoing dispute. The trade office of the US government said, on Monday, that efforts to negotiate new WTO rules to limit China’s “mercantilist” trade practices will fail.
“It will be unrealistic to hope that anything positive would result from negotiations of new WTO rules to govern China’s trade and current approach to the economy,” says an annual report on China’s WTO compliance by the U.S. Trade Representative’s office. The Trade office stated that it will do everything it can to protect workers, farmers, and businesses in the US.
The annual report which was sent to the Congress provided details on the outcome of the meetings between the US and China. Trump’s administration has said that the 10% tariff on $200 billion of Chinese goods will increase to 25% if both parties fail to reach an agreement before the March 2nd deadline.
Since the establishment of WTO in 1995, no significant changes have been made to the rules. This is probably because for any WTO rule to be changed, the 164 countries that make up the body must agree to it. It is pertinent to note that all efforts in the past to make changes to the rules have been unsuccessful.
According to the USTR, it is highly unlikely that China will adhere to new disciplines aimed at changing its trade practices and economic system.
When the trade tension between China and the US started last year, economic and trade analysts predicted that both countries will lose billions of dollars if they do not resolve their dispute quickly. The US and China imposed heavy tariffs on each other’s goods and the effect of their action is telling on the global economy. After Chinese officials met with US representatives in Washington last week, President Trump said he would be meeting with Chinese President Xi Jinping soon. This might be an indication that last week’s meeting went well.