U.S.-China Trade:

United States Has Secured Commitments in Key Bilateral Dialogues, but U.S. Agency Reporting on Status Should Be Improved

GAO-14-102: Published: Feb 11, 2014. Publicly Released: Feb 11, 2014.

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David Gootnick
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What GAO Found

GAO identified 298 trade and investment commitments made by China in the U.S.-China Joint Commission on Commerce and Trade (JCCT)—184 since 2004—and the U.S.-China Strategic and Economic Dialogue (S&ED) and its predecessor—114 since 2007. The commitments range from affirmations of open trade principles to sector-specific actions. GAO identified 11 issue areas to characterize the content of each commitment. The prominence of issue areas, measured in number of commitments associated with an issue area, differs between the dialogues, reflecting differences in the dialogues' structure and focus. Intellectual property rights commitments are among those most common in the JCCT and investment commitments are among those most common in the S&ED. (For a detailed inventory of commitments and their categorization, see GAO-14-224SP .)

U.S. Agency Roles in the JCCT and S&ED

U.S. Agency Roles in the JCCT and S&ED

U.S. agencies track commitment implementation through several means, including outreach to domestic stakeholders, issue-based working groups with China in the JCCT, and consultations in advance of S&ED annual meetings. No single document is used to track implementation, according to U.S. officials. In addition, although there have been calls to use metrics such as exports and sales in developing commitments, agencies identified only one such commitment in the dialogues and cited challenges in identifying appropriate data.

Although several reports on trade barriers present information on JCCT and S&ED commitments, information on commitment implementation in these reports does not provide a clear and comprehensive picture of progress across the dialogues. The Office of the U.S. Trade Representative (USTR) produces these reports with assistance from other agencies, including the Departments of Commerce (Commerce) and Treasury (Treasury). GAO's analysis of 10 software commitments from 2008-2011 shows, for example, that the implementation status of most could not be clearly identified. More comprehensive reporting would give Congress and other policy makers a clearer understanding of progress and the role of the dialogues as they continue to assess challenges in the U.S.-China relationship.

Why GAO Did This Study

China is the largest destination for U.S. exports outside North America and also the source of the largest U.S. bilateral trade deficit. The countries engage in two high-level dialogues to address trade barriers and cross-cutting economic issues. These are the JCCT, co-led for the United States by Commerce and USTR, and the economic track of the S&ED, led by Treasury. GAO was asked to review China's bilateral trade commitments made in these dialogues. This report (1) describes trade and investment commitments China has made at the JCCT and S&ED; (2) describes U.S. agency tracking of China's implementation of these commitments; and (3) evaluates U.S. agency reporting on implementation. GAO analyzed documents, including public fact sheets stating commitments; interviewed officials, industry representatives, and other experts; used a structured process to categorize commitments; and reviewed reports officials identified as reporting implementation status of commitments.

What GAO Recommends

To improve understanding of progress through the bilateral dialogues in increasing access to China's markets, USTR, in conjunction with Commerce and Treasury, should work to improve reporting on China's implementation of JCCT and S&ED trade and investment commitments. In written comments, USTR and Commerce did not directly agree or disagree with the recommendation, but raised several concerns. USTR maintained current reporting is comprehensive and Commerce noted resource constraints. GAO continues to believe improved reporting would benefit policymakers.

For more information, contact David Gootnick at (202) 512-3149 or gootnickd@gao.gov.

Recommendation for Executive Action

  1. Status: Open

    Comments: USTR has taken steps to implement this recommendation, but additional information on the status of specific commitments would further improve understanding of progress in these bilateral dialogues. USTR made changes to the Chinese trade barriers reporting in its 2014 National Trade Estimate Report on Foreign Trade Barriers (NTE report) to align more closely with other Congressional reports prepared by USTR on related issues. USTR also provided updated information in that NTE report on China's compliance with a commitment that had not been reported on in earlier reports. Further, USTR identified the Report to Congress on China's WTO Compliance as the one report among the various annual reports prepared by USTR that provides comprehensive information on the status of the trade and investment commitments that China has made through the U.S.-China Joint Commission on Commerce and Trade (JCCT) and the U.S.-China Strategic and Economic Dialogue (S&ED).

    Recommendation: To improve policymakers' and the public's understanding of progress through bilateral dialogues in increasing access to China's markets, the U.S. Trade Representative, in conjunction with the Secretary of Commerce and the Secretary of the Treasury, should work to provide clearer and more comprehensive reporting on the status of China's implementation of its JCCT and S&ED trade and investment commitments. This reporting should include more complete information on the status of implementation of these commitments, as well as a more clearly identified source for consolidated information, which could be an existing report.

    Agency Affected: Executive Office of the President: Office of the U.S. Trade Representative


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