House Member Says Congress More Dominated by Decouplers, Punishers of China
Rep. Rick Larsen, a pro-trade Democrat from Washington state, told an audience at the Washington International Trade Association that Congress views China primarily as a strategic competitor, though members recognize there are areas of cooperation as well. He said that 10 years ago, the view from Washington was the reverse.
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Larsen, who spoke to an online webinar July 1, said there are three groups in Congress -- punishers, over human rights or other issues; decouplers; and engagers. He said the goal of decoupling is good for pharmaceutical supply chains and maybe some technology that creates national security concerns. But he said some decouplers “want U.S. companies not to do business with China at all. I don’t know that’s realistic, but there's a group of members of Congress like that.”
Larsen said he puts himself in the engagers group, a group that has shrunk over his 20 years in the House. “I’d almost call us salvagers, trying to salvage those areas where cooperation can happen, and ought to happen, in our interest.” Discussing the Senate China package, Larsen said a lot of what's in that package, and in thematically similar bills being shaped in the House, “has to occur for its own sake, for the United States. The context of this is not just U.S. versus China, it’s U.S. present versus what the U.S. ought to be in the future.”
Naomi Wilson, vice president of Asia policy at the Information Technology Industry Council, and Matthew Goodman, a top China scholar at the Center for Strategic and International Studies, discussed how the U.S. should react to competition with China. Wilson said it's important for policymakers not to overestimate the advantage that heavy subsidization has given Chinese industry, at least in some sectors. She said China “has poured a ton of money into semiconductors over the last 15 years, and they still don't have the most competitive technologies."
Goodman said the World Trade Organization is not well-equipped to police the trade distortions caused by subsidization, because “this kind of massive structural industrial subsidization was not envisioned by the WTO.” He said reviving the trilateral discussions between the European Union, the U.S. and Japan would be very useful.
On intellectual property theft by Chinese companies, Goodman said “it's still a big problem today.” Beijing has started to recognize that protecting IP is important to China, but “they can't fully enforce it and in some areas they don’t want to,” he said.
Wilson said American policymakers need to have a more nuanced view on IP theft. “There’s still this old notion -- China just steals everything, they don’t create anything -- and that’s no longer true, and we need to stop telling ourselves that.” She said she's more concerned about IP leakage through intrusive security review regimes or forced tech transfers than about cyber hacking.
Goodman said laws such as Section 337 need to be better enforced, and provisions probably need to be added to prevent Chinese companies from profiting from IP theft through U.S. sales.