As I read this piece at The Hill by Arthur Dong on the emerging trade deal with China, I had a number of thoughts which I thought I’d share. I wonder if Professor Dong or the U. S. trade representatives realize what an enormous pile of codswollop this is:
While the trade settlement has not been formally announced, it is anticipated that China may modify its stance on some key U.S. priorities, namely:
- China agrees to purchase more U.S. goods and services including energy and agricultural resources;
- China agrees to open its domestic economy to greater foreign investment and reduced barriers to trade;
- China agrees to open its cloud-computing sector to outside companies;
- China agrees to enforce intellectual property rights and eliminate the requirement of sharing technology as a condition of entry; and
- China agrees to an enforcement mechanism.
In the absence of a robust system of civil law in China, that’s a big pile of nothing. China will enforce the intellectual property rights of U. S. companies or “purchase more U. S. goods and services” for precisely as long and in precisely the quantities desired by the Chinese Communist Party or in other words President Xi who seems to be its Supreme Leader at this point. China is large enough that other than a few Potemkin deals that means nothing.
There are ways of addressing the intellectual property issue completely within the United States where there is a robust system of civil law. For example, any publicly-held U. S. company that surrenders its intellectual property for whatever access to the Chinese market they are deigned to acquire, as is their right should be required to report it to the U. S. federal government and all of that company’s intellectual property present and future should be deemed released into the public domain. Problem solved. Chinese espionage is another story. The federal government needs to take Chinese espionage much more seriously than it does.
As far as China’s managing its trade, imposing tariffs is the right solution. Until China’s economy is completely open to foreign competitors including its banking industry, we should impose tariffs in the amount of our trade deficit with China. Again—problem solved.