Editorials

Legislative myopia

(China Daily)
Updated: 2010-06-18 07:57

An interim report by the World Trade Organization (WTO) has ruled in favor of China against a key clause in a US law that prohibits poultry imports from the nation.

This symbolic victory will not much improve the conditions of Chinese exporters given the small proportion of poultry exports to the United States. At best, it can boost China's confidence in the face of a growing number of trade disputes between the world's two major traders.

However, this WTO ruling can serve as pertinent warning to those US lawmakers advocating a short-sighted bill to force China to raise the value of its currency.

The WTO interim ruling has recognized that the US import ban on China's poultry violates the rules of the world trade body.

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According to the US law, no government funds should be made available for the establishment or implementation of a rule allowing imports of poultry products from China.

The US can appeal against the decision, but the report will be coterminous with the panel's final verdict in case the US loses the appeal.

The message of the latest WTO report is clear: US lawmakers cannot legislate domestic interests against international rules without scruple.

While prodding the US government to take a tougher line on China, some US senators are threatening to introduce a bill targeting China's currency and trade practices, insisting blindly that a weak yuan gives Chinese exporters an unfair advantage over their US competitors.

Unfortunately, their argument flies in the face of all the hard evidence that the Chinese currency is not the answer to US economic woes. Worse, by playing up to domestic protectionism, these US lawmakers risk undermining trade growth between China and the United States.

The current WTO interim ruling may not be enough to stop these US lawmakers. But it can remind them that nearsighted legislation will not walk long.

(China Daily 06/18/2010 page8)