US Refuses To Grant China Market Economy Status: A G2 Trade War Begins

Published in SE Daily
(South Korea) on 25 November 2016
by Editorial (link to originallink to original)
Translated from by Myung Jeon. Edited by Rachel Pott.
The U.S. has refused to declare China a market economy. At a press conference after the U.S.-China Joint Commission on Commerce and Trade meetings held in Washington D.C. on Nov. 23, 2016, U.S. Secretary of Commerce Penny Pritzker said, "At this moment it is not ripe for us to change our protocol." This indicates that the U.S. has already put a brake on the market economy valuation of China at the World Trade Organization, which was scheduled for December 2016. No wonder China rebuffed the U.S. "As a member of the WTO, China also has the right to ensure its rights as a WTO member," rebutted Zhang Xiangchen, China’s deputy international trade representative, who attended the two day technical meetings of U.S. and Chinese trade officials in Washington, D.C. Consequently, the annual U.S.-China trade talks proved to be the prelude to a much feared trade war between the two economies.

U.S. pressure on China is no surprise, and the pressure is highly likely to escalate since U.S. President-elect Donald Trump has already defined China as a “U.S. enemy” that deprives the U.S. of jobs, and he has vowed to initiate tough measures. Specific action plans to toughen trade defenses against China – such as labeling the country as a currency manipulator, accusing Beijing of providing illegal subsidies and regulating IP infringements – have been drawn up. It is also possible the new U.S. administration will either slap a 45 percent tariff on Chinese steel and other goods under Section 201 and Section 301 of the Trade Act of 1974 or use an administrative tool to put a cap on the number of Chinese goods that can be imported.

China will not just stand by. The country has already set up a strategy to counter high retaliatory U.S. tariffs on Chinese imports by challenging them at the WTO. Beijing has also prepared a counterattack: It has warned the U.S. that its Boeing orders will be replaced with Airbus aircrafts and that sales of U.S. automobiles and iPhones will face difficulties if Washington advances trade defenses against China. It has also threatened the U.S. that it may cease to import U.S. soybean and maize. This is why concerns over a potential full-scale trade war between the two countries continue to grow.

What matters most is that South Korea’s economy will be at stake. If Chinese exports to the U.S. decline as a result of conflicts between the two economies, it is highly likely that Korean companies that export intermediate goods to China and those that operate in China will be severely affected. In addition, we cannot rule out a scenario in which the U.S. labels China as a currency manipulator and puts South Korea on a currency watch list as well to avoid the criticism that the former is targeted in retaliation. Should a trade war emerge between Washington D.C. and Beijing, there is no way the South Korean economy – which is already suffering from sluggish domestic demand, an export slump and a political scandal linking South Korean President Park Geun-hye to Choi Soon-sil, the daughter of a charismatic cult leader – could benefit. Therefore, it is necessary to monitor the U.S.-China relationship more closely and make a preemptive move. Now we have another reason to urgently restructure the key state agency charged with South Korean economy and commerce.


[사설] 美 ‘中 시장경제지위’ 거부, G2무역전쟁 시작됐다

미국이 중국에 대한 시장경제지위 부여를 거부했다. 페니 프리츠커 미 상무장관은 23일(현지시간) 워싱턴DC에서 열린 미중합동상무위원회 참석 후 기자회견에서 “중국이 시장경제지위로 올라갈 여건이 성숙하지 않았다”고 지적했다. 다음달 진행할 세계무역기구(WTO)의 중국 시장경제지위 부여 재검토에 미국이 벌써 제동을 걸고 나선 것이다. 중국이 반발한 것은 당연하다. 이날 회의에 참석했던 장상천 중국 상무부 국제무역부 부대표는 “중국은 WTO 규정에 따라 회원국이 누리는 권리를 보장받아야 한다”고 반박했다. 우려했던 미중 무역전쟁의 서막이 열린 셈이다.

미국의 대중 압박은 예상했던 시나리오다. 더구나 도널드 트럼프 대통령 당선인이 이미 중국을 미국의 일자리를 빼앗는 ‘적’으로 규정하고 강경 대응을 선언한 마당에 강도는 더욱 높아질 게 뻔하다. 환율조작국 지정과 불법 보조금에 대한 WTO 제소, 지적재산권 침해 제재 등 구체적인 액션플랜도 마련된 상태다. 새 행정부 출범 이후 통상법 201조 또는 301조를 동원해 중국산 철강 등에 45%의 관세를 부과하거나 수입물량 제한 등 행정수단을 동원할 수도 있다.

중국이라고 가만히 있을 리 없다. 이미 미국의 고율 보복관세에 WTO 제소로 맞대응한다는 전략을 세웠다. 역공도 준비돼 있다. 미국이 제재를 가하면 중국의 항공기 구매처가 보잉에서 유럽의 에어버스로 바뀌고 미국 자동차와 아이폰 판매에도 어려움을 겪을 것이라는 경고가 그것이다. 콩과 옥수수는 아예 수입을 중단할 수 있다고까지 으름장을 놓았다. 미중 간 전면적 무역전쟁에 대한 우려가 커지는 이유다.

문제는 우리다. 당장 양국 갈등으로 중국의 대미수출이 둔화한다면 국내 기업의 중간재 수출과 현지 진출기업이 큰 타격을 입을 가능성이 높다. 게다가 미국이 중국을 환율조작국으로 지정할 경우 표적 보복이라는 지적을 피하기 위해 관찰대상국인 한국을 포함할 수도 있다. 가뜩이나 내수위축과 수출부진, ‘최순실’로 고통받는 우리 경제에 결코 유리할 리 없다. 미중 관계에 대한 모니터링을 대폭 강화하고 선제 대응하는 것이 시급하다. 경제와 통상을 책임질 컨트롤타워를 하루빨리 재정비해야 하는 이유가 또 하나 생겼다.
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