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Denouncing (China’s) Trade-Related Coercion: US, Australia, UK, Canada, Japan, and New Zealand Unite

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In a resounding show of solidarity, the United States, alongside its steadfast allies Australia, Britain, Canada, Japan, and New Zealand, has issued a joint declaration denouncing trade-related economic coercion. While the statement itself avoids explicit mention of any specific countries, it is widely interpreted as a collective stance against the trade practices employed by China.

The joint declaration, a product of shared concerns, underscores the potential threats posed by non-market-oriented policies and practices. These practices, which include economic coercion, pose a significant risk to the integrity of the multilateral trading system and the stability of international relations.

This united front against economic coercion comes on the heels of the Group of Seven (G7) leaders’ recent commitment to counter such tactics. The G7 initiative aims to ensure that any attempts to weaponize economic dependence will be met with resolute action and consequences.

Of particular concern to the signatory nations are issues such as pervasive subsidization, anti-competitive practices by state-owned enterprises, forced technology transfer, and government interference in corporate decision-making. These issues have been recurrent sources of tension, with China often at the center of these concerns.

China’s recent ban on imports from Lithuania, in response to Lithuania’s decision to establish a de facto embassy for Taiwan, is one such example cited in the joint declaration. Beijing’s actions have drawn criticism for their punitive nature and have further intensified the call to address trade-related economic coercion.

China, in response to previous G7 declarations on economic coercion, has accused the United States of orchestrating an anti-China campaign in the Western world. This ongoing rhetoric underscores the deep divisions and tensions surrounding the issue.

In addition to trade-related concerns, the joint statement also expresses serious apprehension regarding forced labor practices. The signatories stress that forced labor, including state-sponsored forced labor, not only constitutes gross human rights abuses but also has far-reaching economic implications. They emphasize the moral imperative to eradicate these practices from global supply chains.

China’s Coercive Economic Tactics

In the face of China’s growing influence and its strategic employment of economic coercion, it is imperative to analyze and understand the dynamics at play. The weaponization of trade has become an integral component of China’s foreign policy, aimed at pressuring countries that challenge its “core interests” or align with perceived adversaries.

China’s coercive measures encompass a wide range of tactics, including discriminatory sanctions and embargoes that violate World Trade Organization (WTO) principles. Since 2008, this coercive behavior has targeted a diverse array of countries, including Japan, Lithuania, Norway, Australia, and more, as well as prominent private companies like Walmart and the National Basketball Association.

The success of China’s coercion strategy stems from its ability to impose significant economic consequences on targeted nations. South Korea and Germany, for example, remained silent on China’s national security law in Hong Kong following economic sanctions imposed on Lotte and German pork imports. Brazil refrained from excluding Huawei from its 5G auction, fearing substantial losses in business opportunities.

Moreover, China employs preemptive tactics to deter potential sanctions or negative attention. The Gap clothing company, in a bid to avoid Chinese sanctions, publicly apologized and withdrew a t-shirt design featuring a map of China that omitted Taiwan and Tibet. Japanese fashion retailer Uniqlo, likewise, remained silent on human rights violations in Xinjiang.

China’s track record of economic coercion extends beyond trade embargoes. It includes bans on Norwegian salmon after the release of the movie “Seven Years in Tibet,” and sanctions against online merchandising and game broadcasts of the NBA’s Houston Rockets due to a team staff member’s tweet supporting Hong Kong democracy.

China’s actions serve as a constant reminder to other nations of the potential consequences they may face if they challenge or oppose its policies. Through its warnings and economic leverage, China seeks to maintain deference and secure its own interests.

Addressing China’s weaponization of trade requires a comprehensive and proactive strategy. The current anti-coercion measures, while important, are ultimately reactive and defensive in nature. Countries must go beyond trade diversification efforts and supply chain reshoring to develop a collective resilience strategy.

Collective resilience involves like-minded countries joining forces to form a unified front against China’s economic coercion. By leveraging their interdependence with China, these countries can threaten collective retaliation on goods that China heavily depends on. This approach aims to deter future predatory behavior by imposing significant costs on Beijing.

While some may view collective resilience as contrary to the principles of the liberal international order, it is a necessary response to protect and preserve that order in the face of China’s coercive practices. Just as the United States resorted to unconventional measures during the Cold War to safeguard the Western order, collective resilience serves as a peer competition strategy aimed at deterring China’s economic coercion.

The success of such a strategy hinges on the political will of participating countries and their commitment to signal to Beijing that economic coercion will no longer be tolerated. While collective resilience may never need to be exercised, its existence alone can serve as a powerful deterrent, helping to maintain a balance of power and protect the integrity of the liberal international order.

https://www.csis.org/analysis/examining-chinas-coercive-economic-tactics

https://www.reuters.com/markets/with-eye-china-us-five-allies-condemn-trade-related-economic-coercion-2023-06-09/

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