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U.S. Chamber Chief Urges Trump Embrace Free Trade to Boost Growth

Date: January 14, 2020
Source: Politico

The head of a leading U.S. business group Thursday urged President Donald Trump to embrace free trade principles to ensure the United States remains strong and prosperous and to take steps to rescue the World Trade Organization's appellate body from an untimely death.

“Engaging with the world is our best strategy for strong national security and lasting prosperity,” U.S. Chamber of Commerce CEO Tom Donohue said in his annual State of American Business address.

“Embracing free trade doesn’t mean ignoring unfair practices aimed at us. It means leading the way in setting the rules and enforcing them, based on the simple propositions that more trade is better than less trade, more customers are better than fewer customers and expanding markets globally will benefit everyone," he added.

The business leader's remark follows three years of Trump trade actions that raise questions about the U.S. commitment to the rules-based trading system that it helped create after World War II.

Donohue argued U.S. openness was a source of strength and warned against the risks of retreating from global rule-making.

“America must be involved, not isolated," he said. "We must set the pace, in an open and collaborative manner, for global engagement — not only in trade, but also finance, technology, intellectual property, investment, environment, and the rule of law."

Trump has brushed off rarely used powers to unilaterally impose tariffs on steel and aluminum imports that he said pose a threat to national security.

He also threatened to withdraw from the North American Free Trade Agreement to pressure Canada and Mexico into negotiating a new deal that the Congressional Budget Office estimates would effectively reimpose tariffs on many auto imports from those countries.

That tough approach has produced some success, including in talks with Beijing, which Trump has hit with tariffs on about $370 billion of its exports to the United States.

Next week, Chinese Vice Premier Liu He will visit Washington, where he and Trump will sign a phase one trade deal paving the way for increased Chinese purchases of U.S. farm goods.

Beijing also has agreed to new disciplines on currency practices, intellectual property protections and forced technology transfer as part of the pact.

Despite that progress, “there’s still a long way to go" to balance the trading relationship, Donohue said. "Phase II must address Chinese trade and industrial policies that put American businesses at a competitive disadvantage. It is in both nations’ interests to resolve those issues and restore our commercial relationship."

Donohue also warned the tariffs that Trump imposed on Chinese goods to pressure Beijing — which largely remain in place — are having a negative impact on many American businesses and consumers.

In a speech Wednesday night to the China General Chamber of Commerce, China's ambassador to the United States, Cui Tiankai, touted recent steps China has taken to open its market for more trade and investment. He also expressed hope for better relations with the Trump administration in 2020.

"In the new year, we hope that no matter how America’s domestic politics may change, its real statesmen will keep to rational and practical China policies, reject extreme rhetoric such as 'decoupling' and 'new Cold War' and work with China towards a relationship based on coordination, cooperation and stability," Cui said.

Turning to the multilateral trading system, Donohue said he hoped the U.S. would engage with other members to salvage the WTO's appellate body, which has largely ceased to function because of the Trump administration's refusal to allow the appointment of new judges as old terms expire.

The United States has taken that hard-line stand because it believes many appellate body rulings, especially in regards to the use of anti-dumping duties, have imposed new obligations on the U.S. that it didn't agree to accept in negotiations.

Donohue argued the United States has benefited from the WTO and the Trump administration should be taking action to build it up.

“Its rules protect American business from unfair treatment and protectionism,” Donohue said. “Safeguarding this institution and its dispute settlement system should be an urgent international priority. Let’s not shutter the WTO appellate body. Such drastic action doesn’t serve America’s interests.”

The business leader praised House passage of the U.S.-Mexico-Canada Agreement, which the Senate is also expected to approve in coming weeks.

And he called for similar high-standard trade pacts with Britain and the European Union, Japan, Brazil, and emerging markets in Africa and stressed the importance of U.S. engagement in the booming Asia-Pacific.

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