China presents a broad set of problems that cry out urgently for solutions. It is time to end the Obama administration's acquiescence to the one-way arrangements the Chinese have come to enjoy. We need a fresh and fearless approach to that trade relationship. Our first priority must be to put on the table all unilateral actions within our power to ensure that the Chinese adhere to existing agreements. Anyone
with business experience knows that you can succeed in a negotiation only if you are willing to walk away. If we want the Chinese to play by the rules, we must be willing to say "no more" to a relationship that too often benefits them and harms us.
Improve Enforcement at the Border
There are some measures entirely within our control. We can do a far better job of keeping counterfeit goods out of our country and enforcing the intellectual property protections that we already have in place. In some locations this may simply entail increasing the frequency of inspections or ramping up fines and punishments.
We also must resolutely counter efforts by unscrupulous exporters in China and elsewhere to evade the remedial measures we already impose in response to their unfair trade practices. Chinese exporters, for instance, sometimes ship their products to third-party countries and fraudulently declare the products as
originating there to avoid remedies that have been imposed on unfairly traded goods. Such practices need to be brought to a swift end. As president, Mitt Romney will allocate the necessary resources to investigating the actual point of origin for suspect products arriving on our shores and impose harsher penalties on those
who would circumvent our laws. The return on the increased investment in enforcement would be immediate and substantial.
Protect and Pursue Legal Rights
Far too many transgressions are never challenged for fear of disrupting trade relationships, a problem that pertains to commerce with not only China but also with other countries. As with any treaty, trade agreements are not worth the paper they are printed on unless the signatories adhere to them. We thus need to act more resolutely at the World Trade Organization (WTO) to ensure we are getting the benefits of the bargains struck in our trade agreements.
American corporations should not be left in a position in which they are afraid to pursue their interests to the full extent of the law. The Office of the United States Trade Representative (USTR) in a Romney administration will be tasked with pursuing all significant claims of unfair trade practices. It will also take a far
more active role in encouraging private firms that have been victimized to raise claims both in U.S. courts and at the WTO. If the USTR can be their advocate in and out of court, American companies and the country as a whole will be in a stronger position.
Impose Targeted Tariffs or Economic Sanctions
Mitt Romney believes we need to consider the use of targeted unilateral and multilateral sanctions. For instance, if the United States identifies a Chinese firm or industry that is relying on unfair practices or misappropriated American technology for its competitive advantage, we should be in a position to impose
punitive measures in response. If China makes it a priority to strong-arm Western corporations in industries with particularly valuable technologies, we should join with our allies to ensure that it does not obtain the technology transfers it seeks.
Designate China a Currency Manipulator andImpose Countervailing Duties
Current U.S. law requires that the Department of the Treasury release a biannual review in which it identifies any countries that are manipulating their currency to gain an unfair advantage. The Department of Commerce also has the power to find that Chinese currency policy constitutes an unfair subsidy to Chinese exporters, and to assess countervailing duties on Chinese products. The Obama administration has declined to take either action, effectively accepting China's problematic practices. That acceptance has to end. If China fails to move quickly to bring its currency to fair value, the Department of the Treasury in a Romney administration will designate China a currency manipulator and the Department of Commerce will impose countervailing duties.
Insist on Reciprocal Government Procurement
China is not a member of the WTO's Government Procurement Agreement (GPA). However, it has declared its intent to join. The GPA forbids member nations from discriminating against one another's products and services in the course of government procurement. The Chinese government, by itself one of the world's largest consumers, has failed to make good on its commitment to accede to the GPA, and continues to strongly favor domestic Chinese providers.
There is no reason for the United States to tolerate this state of affairs. Until China joins and abides by the GPA, a Romney administration will respond in kind by ending U.S. government procurement of Chinese goods and services.
The United States does not have to accept forever the practices that have led to a huge and seemingly perpetual trade deficit with China. We have opened our economy to China, and China must be persuaded to extend the same privilege to us. China's export-driven economy desperately needs access to our markets and innovations, and we have the leverage to demand that it competes on fair terms in return and provides similar access to its market for U.S. exporters. A Romney administration will work with Congress and our international partners to alter China's behavior. The Reagan Economic Zone will be a key instrument in that
effort, offering China an attractive reward for better behavior as an alternative to aggressive responses to continued intransigence.
The time has to come to lay out a series of steps that China must take to become a responsible member of the global economy. And the time has also come to lay out the consequences that would accompany its failure to make rapid progress toward that end. Despite what the Obama administration appears to
believe, the United States is working from a position of strength. Mitt Romney understands that fundamental point and all that follows from it. He will seek to right our trade relationship with China and strengthen our commercial ties with the rest of the world. Nothing less than economic recovery is at stake.