Economy

Markets

Industries

Insights

Reports

Events

Unwanted trade spats

(China Daily)
Updated: 2009-10-30 08:08

Exchange of fire continues in bilateral trade as high-level economic talks are held between China and US officials yesterday in Hangzhou, one of the most beautiful cities in China.

From an optimistic perspective, this fact speaks volume about the increasing interconnection of the two economies that has apparently persuaded policymakers from both sides to believe that no single trade issue will be allowed to detract from their broader overall relationship.

Yet, such a common understanding does not justify any complacency over or ignorance of the danger of trade spats that will only add fuel to the fire of protectionism.

At a moment when the global recovery from the worst financial and economic crises in several decades are still threatened by climbing protectionism, Chinese and US policymakers should seize every opportunity to make trade between the two nations fair, sustainable and mutually beneficial. By doing so, they are demonstrating to the world that we can work together to fight the global recession.

Soon after the US Commerce Department set preliminary duties on imports of steel grating and concrete steel wire strand, citing Chinese government subsidies, China announced on Wednesday its plans to investigate dumping allegations against auto exports by the three big Detroit automakers.

The latest round of trade spats between the world's largest economy and the fastest growing developing one highlighted the very importance of the China-US Joint Commission on Commerce and Trade, the top forum for addressing bilateral trade matters and promoting commercial opportunities between China and the US.

A frank exchange of views over thorny bilateral trade issues can do more good for both sides than deliberate efforts to play down the problems. It is in this sense that such a discordant background can be viewed as evidence of confidence for policymakers from both sides in the broader bilateral economic and trade ties.

Related readings:  US tire duties 'serious trade protectionism'  US trade gaps narrows unexpectedly  Trade, climate top US-China agenda  US probe likely to 'harm' trade ties

But the danger of giving free rein to such trade spats is also obvious.

On the one hand, more or less, it will further worsen the bilateral trade atmosphere after the Obama administration imposed safeguard duties on imports from China for the first time in September.

On the other hand, it will send a wrong signal to protectionists who would not hesitate to increase trade frictions to pursue their narrowly-defined interests.

More trade barriers around the world will only slow down the global recovery, the sustainability of which is far from certain. Hence, policymakers must do their best to reduce trade spats as much as possible, no matter how innocuous they appear.