International Legal Perspectives | U.S. 301 Survey: Unilateralism Hegemony and the Woes of the International Trade Order
Published:
2024-04-24
On April 17, 2024, the Office of the United States Trade Representative (USTR) launched a 301 investigation into China's so-called "unfair economic practices" in the maritime, logistics and shipbuilding industries. This move has caused widespread concern and controversy. From a legal point of view, this action has no legal basis, violates procedural fairness and international trade rules, and has many problems and irrationality.
Introduction
On April 17, 2024, the Office of the United States Trade Representative (USTR) launched a 301 investigation into China's so-called "unfair economic practices" in the maritime, logistics and shipbuilding industries. This move has caused widespread concern and controversy. From a legal point of view, this action has no legal basis, violates procedural fairness and international trade rules, and has many problems and irrationality.
(Source: Office of the United States Trade Representative official website https://www.ustr.gov/)
1. US 301 investigation of Chinese companies is unreasonable and unfounded
1. There is no legal basis for the 301 investigation of Chinese enterprises in the United States.
301 investigation is the system stipulated in Articles 301 to 310 of the Trade Act of 1974 (1974) of the United States. According to this provision, the U.S. Trade Representative can investigate foreign laws, policies or practices, consult with relevant countries, and decide whether to take retaliatory measures such as raising tariffs, restricting imports, and stopping the implementation of relevant agreements. Article 301 can be traced back to Section 252 of the first U.S. retaliation law against trading partners, The Trade Expansion Act of 1962 (Trade Expansion Act of 1962), "If a foreign country implements unreasonable or unfair import restrictions, causing burden or discrimination to the U.S. trade, the president has the right to withdraw the concessions to that country, or increase tariffs or impose other import restrictions on the products of that country", it was amended by the Trade Act of 1974, the Trade Agreements Act of 1979 (Trade Agreements Act 1979), the Trade and Tariff Act of 1984 (Trade and Tariff Act 1984), and the Trade and Competitiveness Act of 1988 (Consolidated Trade and Competition Act 1988) of Omnibus.
The U.S. Trade Representative may initiate a 301 investigation by presidential order or ex officio, or on application. After the investigation is initiated, the U.S. Trade Representative may request consultations with the countries involved in the investigation. However, the United States takes retaliatory measures against countries that violate trade agreements or engage in unfair trade practices, and the exercise of this right must be subject to strict legal restrictions and procedural constraints. The U.S. government unilaterally initiated trade investigations against other countries on the basis of 301 clauses and took retaliatory measures, which exceeded the scope of its legal authority.
In addition, the legitimacy of the 301 investigation has been questioned by the international community. The investigation violates international trade rules, especially the purposes and principles of the multilateral trading system and trade liberalization advocated by the World Trade Organization (WTO).
2, the United States 301 investigation of the shortcomings revealed.
The impact of the 2. US 301 survey on the global trading system
The US 301 survey not only has a direct impact on the surveyed countries, but also has a profound impact on the global trading system at the macro level. This impact is mainly reflected in the destruction of the multilateral trading system and the intensification of trade tensions and conflicts.
Destruction of the multilateral trading system
Similar incidents are not uncommon in history. In 2002, the United States launched a 301 investigation into the EU's banana import policy, which eventually led to negotiations between the two sides under the WTO's dispute settlement mechanism. This not only reflects the destructive power of 301 investigation to the multilateral trading system, but also reveals that it may trigger international trade conflicts.
Increased trade tensions and conflicts
In the 2018 Sino-US trade dispute, the United States launched several rounds of tariff sanctions against China. These measures have not only affected China's export enterprises, but also affected other countries and regions in the global supply chain. As a result, many enterprises are facing problems such as shortage of raw materials and rising production costs, which seriously affect their production and operation.
3. China's Legal Strategies to Deal with the US 301 Investigation under the Framework of International Law
We should also be soberly aware that responding to the US 301 investigation is not something that can be done overnight. China needs to continue to strengthen communication and cooperation with the international community and promote the reform and improvement of the multilateral trading system in order to meet the trade challenges that may arise in the future. At the same time, China also needs to continuously improve its economic strength and innovation ability to better adapt to the development and changes of the global economy. Only in this way can we play a more important role in the international trade arena and make greater contributions to the prosperity and development of the global economy.
Suggestions for 4. Chinese Enterprises to Deal with US 301 Investigation
U.S. 301 investigations usually require four steps: initiating an investigation, consulting, adjudicating and imposing sanctions.
The entire process of 301 investigation in the United States usually takes 3-12 months. The specific duration will vary according to the specific circumstances of each survey, the complexity of the countries involved and the pace of the negotiations. Under special circumstances, it can be extended for no more than 180 days. Ultimately, however, all progress depends on the president's decision-making.
From a legal perspective, Chinese companies can adopt the following strategies in the face of 301 investigations in the United States:
5. Summary
As a unilateral trade measure, the United States 301 investigation has many problems and disputes at the legal level, which violates the rules of international trade, the spirit of the rule of law and the basic principles of the multilateral trading system, undermines the stability of the international trade order and exacerbates trade tensions and conflicts. At the same time, the implementation of the US 301 survey has also weakened the stability of the global industrial chain and supply chain, bringing uncertainty and risks to the economies of various countries.
In today's globalization, international cooperation and the spirit of the rule of law are particularly important. Only by adhering to multilateralism, respecting international trade rules and strengthening international cooperation can we jointly maintain the stability and prosperity of the global trade order. All countries should abandon unilateralism and jointly promote the improvement and development of the international trading system to achieve a mutually beneficial and win-win situation.
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