Marking Ten Years Since China Joined the WTO, Sen. Sherrod Brown Co-Chairs Hearing On China's Broken Trade Promises

WASHINGTON, D.C. – Marking ten years since China joined the World Trade Organization (WTO), U.S. Sen. Sherrod Brown co-chaired a hearing today on China’s progress on trade reform over the last decade. Brown is the co-chairman of the Congressional-Executive Commission on China (CECC).

“At the time it joined the WTO, China made many promises. Chinese leaders pledged to reduce trade barriers and open up markets. They promised to increase transparency, protect intellectual property rights, and reform their legal system,” Brown said. “China’s supporters argued that WTO membership would bring human rights, freedom, and the rule of law to China. Yet, after ten years, it’s clear that China is not living up to its promises or the unrealistic expectations of its supporters. Far from becoming freer, the Chinese people are burdened with limited or no rights to basic freedoms of speech, religion, and assembly.

“Not only did WTO not bring freedom and democracy to China, it didn’t bring fair trade either. Instead, China has flouted WTO rules and gamed the system to its advantage,” Brown added. “The most damaging of China’s unfair trade practices is currency manipulation. By deliberately holding down the value of its currency to boost exports, China has built the largest trading surplus in history to the detriment of the U.S. and other trading partners. American workers and American manufacturers can compete with anyone. But they’ll never be able to compete on a level playing field as long as we continue to let China do what it wants, without any repercussions.”

China joined the WTO on December 11, 2001. In doing so, it made numerous promises to reduce trade barriers, open up markets, increase transparency, protect intellectual property rights, and reform its legal system to make it consistent with WTO requirements. Questions that were explored at the hearing included:

• Has China kept its promises and played by the rules?
• What impact has WTO membership had on the development of rule of law in China?
• Has WTO membership leveled the economic playing field as many had hoped?

Witnesses at today’s hearing included Claire Reade, Assistant U.S. Trade Representative for China Affairs, Office of the United States Trade Representative; Grant D. Aldonas, Principal Managing Director, Split Rock International; Alan H. Price, Partner and Chair of the International Trade Practice, Wiley Rein LLP; Clyde V. Prestowitz, Jr., founder and President, Economic Strategy Institute, and Wei Jingsheng, Chair, Overseas Chinese Democracy Coalition.

In October, the Senate passed legislation authored by Brown, the Currency Exchange Rate Oversight Reform Act of 2011, to create and protect jobs by cracking down on Chinese currency manipulation. Currency manipulation is an illegal trade practice in which the Chinese government intentionally devalues its own currency against the United States dollar. This results in artificially expensive American imports to China, and artificially cheap Chinese imports to the United States. This puts Ohio and American manufacturers at a serious disadvantage, and makes it more difficult for American companies to compete against Chinese companies. Though the bill passed the Senate with strong bipartisan support, House leadership has refused to bring the bill forward for a vote.

Recently, the Economic Policy Institute (EPI) and the Alliance for American Manufacturing released a new report showing that that the growing trade deficit with China, caused in large part by China’s illegal currency manipulation, has cost the United States more than 2.8 million jobs since 2001, including more than 1.9 million manufacturing jobs. In June, EPI released a report showing that addressing Chinese currency manipulation could support the creation of 2.25 million American jobs.