President Trump should work with allies in Europe and the Indo-Pacific to move towards expelling China from the World Trade Organization.
I suggest this course of action in light of Greg Ip’s excellent Wall Street Journal article on Wednesday describing the practicalities of China's WTO expulsion. Ip notes that while the action would be complicated and controversial, it is also theoretically and functionally feasible. Ip also rightly notes that an alignment of WTO member states against Chinese economic misconduct would send a powerful rebuke to Beijing.
But I would go further.
I believe active efforts to threaten China's detachment from the WTO trading alliance would mark a powerful realignment of international order towards the rule of law. The importance of the balance of power between Chinese President Xi Jinping and the existing U.S.-led international order cannot be overestimated. After all, in China's treatment of its own citizens, we see the nature of a regime determined to assume untrammeled authoritarian power. While China throws tens of billions of dollars in investments around the globe, all of this is in pursuit of China's global hegemony. And unlike the U.S., China seeks a hegemony that is not based of freedom under law, but rather on feudalism under lease from Xi's throne.
The WTO approach to rebalancing U.S. interests is particularly well-suited. That's because America is far from alone in suffering China's rampant intellectual property theft, and its unrepentant disinterest in the WTO rules it has signed up to. Moreover, when it comes to China's neighborhood, for states like Australia, India, and Vietnam, China's WTO breaches reflect not just bad behavior, but a stark interest in dominating competing export-economies.
The time is ripe for American leadership. To that end, President Trump should address these nations with a simple message: "The WTO gives us a mechanism with which to collectively alter China's unacceptable behavior in a proportionate manner that specifically addresses that behavior." This message would carry added weight in the context of the animus towards China that now defines much of the Indo-Pacific region. If nothing else, this populist animus would give regional leaders political insulation from the inevitable Chinese rage that would follow any WTO expulsion effort.
But what of Europe? Will the European Union support this effort?
A few months ago, I would have said no, but things are now different. With President Trump and the E.U. moving towards economic consensus and away from economic conflict, a positive working relationship is developing. To be sure, Trump and European leaders do not get along. But they do see the interest in increased trade that benefits their peoples. And unlike with some trade deals, Trump does not fear European competition in the sense that it is built on the same high-value/high-wage export model the U.S. employs. In turn, making the case that the Western liberal order must have teeth as well as meetings if it is to provide new prosperity in the 21st century, Trump should push the Europeans to join this effort. They share many of the U.S. intellectual property and Chinese domestic subsidy concerns, so there is opportunity.
Yet, the best thing about this strategy would be its balance. By demanding specific actions from China in return for Beijing being allowed to maintain its WTO access, the alliance would give Xi an off-ramp to avoid that which he most fears: loss of access to WTO playing field.