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Business / Opinion

Trade agreements should not be political

By Don Bonker (China Daily) Updated: 2014-03-12 07:29

Last year President Obama and Chinese President Xi Jinping agreed to revive negotiations for a China-US Bilateral Investment Treaty that is intended to break down the barriers to encourage more foreign investments between the two countries. Yet is the US prepared to insulate the Committee on Foreign Investment in the United States process from being used for political and economic interests to block investments, and is China, for its part, willing to allow foreign investments in its protected industries, particularly State-owned enterprises and in the financial, transportation and telecom sectors?

The flip side is the ever increasing mercantile trade across the Pacific. The whole idea of the TTP is to lower tariffs, remove restrictions and improve market access among the participating nations. But it will likely encounter the same fate as the 20 FTAs previously negotiated by the US Trade Representative that ultimately were greeted with skepticism on Capitol Hill.

Nowhere is this more evident than US trade policies that are being unfairly aimed at China. America's anti-dumping/countervailing duty laws are highly discriminatory in that they still treat China as a non-market economy, which guarantees the imposition of punitive tariffs that are proving harmful to businesses in both countries.

It certainly raises questions about the US' protectionism or at least the politicalizing of its trade policies, casting doubts on Congress acting responsibly and a president's ability to deliver on important trade deals. Indeed former US trade representative Robert Zoellick once declared that "trade agreements were more about politics than economics".

Trying to address these issues will be a challenge. On the US side, it is a combination of old fashion protectionism, China bashing, distorted regulatory policies, and domestic companies seeking protection from Chinese competition. For its part, China must commit to implementing the Third Plenum's bold 60-point reform plan and otherwise insure more openness and transparency as it becomes more dominant in the world economy.

Hopefully, if both China and the Obama administration can get their act together on investment and trade policy, we may see the day when the bilateral economic relationship is less about politics and more about economics.

The author, a former US Congressman, is with APCO Worldwide.

(China Daily 03/12/2014 page9)

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