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Linda Qiu
By Linda Qiu December 14, 2016
Back to Create a new trade enforcement unit that will address China's trade practices

Obama fulfills pledge with aggressive WTO actions

President Obama's promise to go after China's unfair trade practices is on track to be fulfilled.

Obama's pledge got an important boost after Congress codified a special trade enforcement unit to tackle potential violations of international trade.

In February 2012, Obama created the Interagency Trade Enforcement Center via executive order. It was designed to coordinate responses to potential violations of international trade agreements from the Office of the United States Trade Representative (USTR) and the departments of Agriculture, Commerce, Homeland Security, Justice, State and Treasury.

When we last looked at this promise, we noted that Obama had requested funding and support for the unit in his 2014 and 2015 budget proposals.

In early 2016, Obama signed the Trade Facilitation and Trade Enforcement Act of 2015 into law, permanently establishing the successor to the 2012 center: the Interagency Center on Trade Implementation, Monitoring and Enforcement. The legislation also authorized $15 million per year for trade enforcement efforts.

While the USTR and the center don't specify China in their missions, it has been the target of the bulk of U.S. trade enforcement actions.

"By and large, the Obama administration has made good on the promise," said Edward Alden, a senior fellow at the Council on Foreign Relations who studies U.S. trade policy. "There has absolutely been a significant ramping up of enforcement action under this administration, most of it directed at China."

The Obama administration has brought 19 cases before the World Trade Organization, 12 of them against China. The WTO has ruled against China in each of the six settled cases.

Date

Case

Current status

September 2016

Domestic support for agricultural products

Pending

July 2016

Export duties on raw materials

Pending

December 2015

Taxes on aircraft

Pending

February 2015

Export subsidies benefiting seven industries

China agreed to comply

September 2012

Export subsidies for cars and car parts

Pending

July 2012

Anti-dumping and countervailing duties on U.S. cars

Violations found

March 2012

Export restrictions on rare earths

China agreed to comply

September 2011

Anti-dumping and countervailing duties on U.S. poultry products

China agreed to comply

December 2010

Measures on wind equipment

Pending

September 2010

Countervailing and anti-dumping duties on U.S. steel

China agreed to comply

September 2010

Measures on electronic payment services

China agreed to comply

June 2009

Measures on raw materials exports

China agreed to comply

 

The Trans-Pacific Partnership trade deal is another tool of the Obama administration to put pressure on China. (President-elect Donald Trump has said he will pull out of the pact.)

China is not a member state, but experts say the deal should move China to conform to global trade norms. Alden pointed to the chapter on state-owned enterprises in particular. Among other things, TPP ensures that enforceable rules also apply to entities owned or controlled by governments.

"The only member nation that has them is Vietnam, and nobody really cares about Vietnam," he said. "This was intended to set down a marker for China."

Although Alden believes the administration could have been more aggressive in messaging about China's unfair trade practices, it has fulfilled its pledge overall.

We rate this Promise Kept.

Our Sources

Office of the United States Trade Representative, "The President's TRADE AGENDA," accessed Dec. 13, 2016

Office of the United States Trade Representative, "23 U.S. Trade Enforcement Challenges at the WTO," accessed Dec. 13, 2016

PolitiFact, "President Barack Obama says his administration has nearly doubled rate of China trade cases," April 8, 2012

Email interview with the Office of the United States Trade Representative, Dec. 13, 2016

Interview with Edward Alden, senior fellow at the Council on Foreign Relations, Dec. 13, 2016