Carlos Barria / Reuters The Shanghai financial district, May 12, 2013.

Was Letting China Into the WTO a Mistake?

Why There Were No Better Alternatives

As President Donald Trump’s recent $60 billion-a-year trade tariffs against China have made abundantly clear, there has been growing discontent in the United States with Beijing’s failure to conform to liberal economic and democratic norms. The dismay over Chinese protectionism, and its negative impact on developed economies, has emanated not just from the White House, but from voters as well as from diplomatic, commercial, and academic quarters. The chorus of outrage has even raised doubts over whether the West should have ever admitted China to the World Trade Organization, whose rules-based system seemingly enabled Beijing to prosper even as it engaged in questionable behavior. Was letting China into the WTO a strategic mistake?

In a report released earlier this year, the U.S. Trade Representative argued rather provocatively that the United States had indeed “erred in supporting China’s entry into the WTO on terms that have proven to be ineffective in securing China’s embrace of an open, market-oriented trade regime.” But did it? It would be poor decision making to reject a policy solely on the basis of the unfortunate outcomes that followed. Such an approach fails to address whether there were any superior alternatives at the time when such a policy was made. In the case of China’s accession to the WTO in 2001, the reality is that identifying a preferable alternative, even with the benefit of hindsight, is surpassingly difficult.

BACK TO THE DRAWING TABLE

To reconsider the merits of supporting China’s WTO membership, we must set the scene. During the 15 years of negotiations leading up to 2001, the United States and other countries set several conditions for China’s admission, including an extensive series of liberalization commitments. These involved concessions such as dropping tariffs on many categories of goods, opening up agricultural trade, and allowing in foreign service providers. In contrast, the United States did not need to make any new market-opening concessions; it just needed to guarantee that it would offer China most-favored-nation status (

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