(Yicai Global) March 10 -- If US President Donald Trump ignores the World Trade Organization ruling he deems offensive to US sovereignty, multilateral trading will struggle, and mistakes from the 1930s trade war may be repeated, said China's commerce ministry.
Speaking at a press briefing yesterday, Sun Jiwen, spokesman, said China firmly supports the multilateral trade system with the WTO at its core, and stands for it to maintain open, transparent, inclusive and non-discriminatory rules. "We call on major WTO members to follow its rules, fulfill obligations, safeguard the authority and credibility of the organization and consolidate its position in governing the global economy," he said.
The multilateral trading system, represented by the WTO, provides a guarantee for the orderly and stable development of global trade. Over the past 70 years, the system has promoted liberalization and facilitation of international trade. Particularly during the global financial crisis, the system supervised members' trade policies and handled member trade disputes, playing a pivotal role in curbing trade protectionism and aiding global economic recovery.
The essence of China-US economic and trade relations is mutual benefit, he said. Since diplomatic relations between the two countries began, bilateral relations have made great progress and brought tangible benefits to the regions and their people. Over the past 10 years, the average growth rate of US exports to China reached 11 percent, making the Asian country America's fastest growing export market, excluding North America.
Between 2001 and 2016, US service exports to China increased 15 fold, resulting in a 29-fold increase in surplus. According to statistics from the US China Business Council, trade between the two countries supports 2.6 million jobs in America. The US has also benefited from two-way investment between the countries, at the end of 2016, Chinese firms had splashed non-financial direct investments of nearly USD50 billion in over 44 states, creating 100,000 jobs. Data shows that 90 percent of US-funded companies in China are profitable.
Globalization is an irresistible historical trend, he said. It is the objective requirement of the development of social productive forces and the inevitable result of the progress of science and technology. As Chinese President Xi Jinping said, in today's world, protectionism is like shutting oneself in a dark room, which shields one from the wind and rain, but blocks out the sun and the air. A trade war will benefit nobody. The US has repeatedly claimed to maintain fair trade, Sun continued, but China believes that only trade that complies with WTO rules is fair. China has always supported the multilateral trading system and is willing to work with the US to promote continuous improvement of the international economic governance system.
The Office of the United States Trade Representative submitted a 2017 Trade Policy Agenda and 2016 Annual Report to US Congress on March 1. The report said that China's accession to the WTO has damaged America's economic interested, and the US will shift from multilateral to bilateral trade and reduce reliance on the WTO's dispute settlement mechanism. It also said Trump's administration is prepared to ignore the WTO ruling it considers intentionally offensive to US sovereignty.