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Mac Margolis: China is the dragon at Latin America’s door
In 2001, China joined the WTO on the understanding that over the ensuing 15 years it would strive to abide by the rules of free commerce by lowering trade barriers, freeing up its currency and pricing its exports according to supply and demand. In return, member states would implicitly agree to recognize China as a grown-up market economy, a crucial upgrade for the world’s second-richest nation.
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As of Dec. 11, each member state must decide for itself whether China is behaving as a market economy. Those who do but also claim that China is breaking the WTO rules now must unpack China’s manufacturing costs, a vexing task in a land where the state also doubles as corporate CEO.
Relations with China range from the individual countries (Chile, Costa Rica, Peru) who signed bilateral free-trade agreements, to those who didn’t. Margolis mentions Argentina which in 2016 petitioned the WTO 11 times against alleged Chinese dumping.
Add to the mix President-elect Trump’s calls for protectionism.
2017 is going to be interesting.
