Question

Under the leadership of President Bill Clinton, in 2000 the U.S. government normalized trade relations with China. This paved the way for China’s becoming a member of the World Trade Organization in 2001. Clinton maintained that this was good for America since China would become a major customer for American-made products and political relations would improve for the governments of China and the United states. However, American labor unions worried about additional competition coming from poorly paid Chinese workers. Do you feel that China’s entry into the WTO was a mistake? Form an argument that supports your view on this matter.

Answer 1

During the time when the Chinese entry was allowed in the WTO and it was hoped that will help in China becoming a major customer for American made products and improvement in the political relations between China and the U.S., this was the right decision taken at that time. During that time the trade between the U.S. and China grew and both were having trade in equal size. However, in the recent years it has been observed that the U.S. has been running a trade deficit with China because the domestic firms cannot compete with the Chinese products which are low priced because of poorly paid domestic workers and low wages in China. The government has recently increased tariff rates of Chinese products to help the domestic producers which is a step in the right direction. However, it cannot be stated that the Chinese entry into the WTO was a mistake. At that time Chinese entry into the WTO was the right step taken by the government.