Joseph Stiglitz, the Nobel Prize winner for economics/File Photo
Joseph Stiglitz, the US winner of the Nobel Prize for economics said in a panel that a meaningful trade agreement between the US and China is unlikely as long as President Donald Trump fails to recognize China's right to develop its economy.
As a professor of economics at Columbia University, Stiglitz said in the recently held China Institute Executive Summit in New York that what US and China are doing now is a skirmish. China is responding in a very measured way, not trying to escalate. However, there are fundamental problems that are going to make reaching a true agreement almost impossible, because the US refuses to recognize that China is a developing country.
Right to development is a fundamental right that no country is going to give up, and the US government is seeing China as a big country and refuses to recognize their right to development, added Stiglitz.
President Trump said during his national security assessment speech at the end of 2017, China is "attempting to erode American security and prosperity" through allegedly forcing foreign companies operating in China to transfer intellectual property to their joint venture partners in China.
Stiglitz commented the accusation is trying to reverse a 70-year process of international agreements that have created an industrial chain, "where borders don’t matter", for political reasons.
The US has never demanded China abide by a multilateral investment treaty when it acceded to the WTO because US companies were keen to partner with China so they could take advantage of the country’s huge market, which allowed China to make rules that foreign companies operating there need to form joint ventures should engage in certain technology transfers. It is not unfair. It is what you would think a responsible developing economy would do, Stiglitz explained.
In regard to China's "Made in China 2025" strategy, the Nobel Prize laureate said China sure has a strategy to grow. Every responsible developing country has a strategy to grow, and the important part of development is that the state plays a role to bring it up.
Stiglitz said that the US has learned how to live with Europe, a slightly different system. "We need to respect different norms and views of regulations. Trying to say 'my view of the world is right' is not going to solve the problem."
Trump's unilaterally slapping tariffs on Chinese products is a "fundamental change to the way the global system operates and it is adding a significant extra cost and those extra costs are borne by ordinary citizens. Eventually they get reflected in prices," the professor said.