The big talk around a trade deal- if there is even an agreement on terms- is how to go about the “enforcement” of those terms.
Riddle: How many government lawyers does it take to draft an effective contract enforcement clause?
I’m not sure of the answer, but the only proper enforcement provision in a U.S.-China trade deal is one where, in exchange for China making and being obligated to make even more purchases of U.S. products, and removing retaliatory and other tariffs on US imports, tariffs below 25% remain levied upon imported Chinese goods until they perform as agreed; the tariffs could be at any reasonable and productive rate- 5%, 8%, 10%- on the products presently receiving the 10% tariff, or they could be 2%, 4%, 6%, on “all” imported Chinese goods- whatever the math is that will incentivize China to change its objectionable trade practices, while also not unduly burdening U.S. businesses.
The rate should be a “ceiling” and never go higher (unless China fails to make the agreed product purchases or fails to remove all retaliatory and other tariffs on U.S. imports), such that U.S. businesses have visibility and certainty.
China can then get tariffs to go lower and lower as they hit their benchmarks and meet their agreed upon obligations for structural changes.
There’s your enforcement clause. And there’s your trade deal.
Any deal that has no tariffs, or a penalty provision where tariffs go higher if China fails to execute on structural changes, would be a bad deal. Such would allow China’s economy to re-boot without changing, create uncertainty for U.S. businesses (in cases where tariffs can rise as a penalty), leave the U.S. government and businesses vulnerable to China’s activities, and be no different than where we were before we had any deal (save for more soybean and corn purchases, perhaps). But, any deal simply requiring China to make purchases of products that it needs to buy from somewhere anyway, in order to get lower tariffs, would not be a noteworthy achievement. In fact, it would be a heck of a lot of work, at numerous nations’ expenses, our own included, just to make a soybean sale.
Neil S. Siskind, Esq., President
The Siskind Law Firm
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Neil Siskind, Founder, “National Fatherhood Day” – March 29th
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– Memorial Sloan Kettering Cancer Center, Volunteer
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Neil Siskind’s Pro Bono Work:
– Saving Senior Citizens- Protecting New York’s senior citizens from fraud and financial abuse www.savingseniorcitizens.com
– Senior FreeStart Business– Pro Bono: We seek to help put senior citizens in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/
– Veteran FreeStart Business– Pro Bono: We seek to help put Iraq and Afghanistan war veterans in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/
– In development: The Neil S. Siskind School of Hope: A free school to teach inner-city youths the skills of entrepreneurship and importance of economic self-sufficiency.
Neil Siskind’s Government Work:
– Suffolk County District Attorney’s Office, Boston, MA, 1994, Intern
– Office of Senator Christopher J. Dodd, Newington, CT, 1992, Intern
– Hartford County Department of Probation, Hartford, CT, 1991, Intern
Neil Siskind’s Community Assistance:
Financed & operated a legal clinic providing low-cost legal services to struggling Long Islanders during the recession to help clients resolve debt, organize finances, and launch new businesses.
Neil Siskind’s Professional Curriculum Vitae: http://neilsiskind.com/
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