Plan

The United States federal government should, through engagement with the People’s Republic of China, end the use of non-Market Status methodology in anti-dumping calculations on the People’s Republic of China.


A1 – trade

Failure to grant market-status leads to an escalatory trade conflict

Goldhaber 15 – JD @ Yale, ‎Senior International Correspondent at The American Lawyer (Michael, “The U.S. Offensive in the China Trade War,” The American Lawyer, Lexis)BB
The normally conciliatory American Chamber of Commerce in China suggested last fall that China is using antitrust to zap foreign firms. It looked prescient when China last month fined Qualcomm Inc. nearly $1 billion for alleged abuse of market position, and forced costly changes to its
license model. Trade wars are old news, but this is something different. Are foreign direct investors now being caught in the cross-fire between U.S. and Chinese exporters?
William Perry of Dorsey & Whitney says they are-and the Americans have it coming, because the U.S. has long used trade law as an instrument of protectionism against China. "The U.S. has taught China how to be arbitrary and capricious," says Perry, who represents Chinese exporters in U.S. trade forums and writes a hot-headed but well-reasoned blog called ChinaTradeWar.com. (The blog also features photos that Perry has snapped of Chinese factories that he's helped to keep open, ranging from a furniture plant in Shenzhen to foundries in Guizhou and Sichuan.) No one says China is blameless, but Perry convincingly puts his finger on a set of contradictions in U.S. trade law that defy economic logic, internal logic and global trade norms.
Nations use trade law to slap high tariffs on imports that they claim were either subsidized or priced below market. In practice, these duties are often so high as to block the imports. U.S. trade remedies block on the order of $10 billion a year of Chinese exports to America, and Chinese trade retaliation (not counting disguised retaliation) blocks on the order of $5 billion a year of U.S. exports to China, according to Perry. Most of the 121 U.S. orders affecting Chinese exports cover raw materials, he notes, which can hurt the U.S. producers they supply.
Chris Cloutier of King & Spalding, who represents U.S. industry in the China trade wars, does not quibble with those numbers. But he stresses that they account for a minute fraction of the two nations' $591 billion in mutual trade last year. Without denying that trade law can be used for protectionist ends, Cloutier defends the system's design.
"Trade remedies are the grease that allows trade liberalization more generally," he says "At a deep level, industry would never agree to free trade without the possibility of remediation."
Perry's main complaint is that the U.S. treats China as a market economy when that helps U.S. industry-and as a "nonmarket economy" when that helps U.S. industry. Communist countries were never sued for subsidizing private industry, because there was no private industry to subsidize. But in the 2007 "Coated Paper" case, the U.S. Department of Commerce ruled that anti-subsidy ("countervailing duty") law now applies to China, because 80 percent of its prices are market-based: "The role of central planners is vastly smaller." Indeed, economist Ann Lee, author of "What the U.S. Can Learn From China," says that in about half of all economic sectors, the market is freer in China than in the U.S., because the build-up of U.S. regulations creates barriers to entry.
Conveniently, though, when it comes to anti-dumping law, China is still designated a nonmarket economy by the Commerce Department. The main result is that the market price for a product-used to evaluate whether China dumped that good at below-market price, and to calculate the level of duties to assess-is based on the "surrogate values" of raw materials, labor and energy in other nations, rather than actual prices in China.
Cloutier says this does not on balance penalize China. Perry says it does. Further, he says, not knowing which surrogate will be chosen makes it impossible for Chinese companies or their customers to know whether or how much they'll be zapped.
Take crawfish, for example. The market price of crawfish is dirt cheap in China, Perry says, because crawfish have no natural predators, and spread like kudzu. But instead of looking at China's market price, the U.S. looked to Portugal, and slapped on duties of up to 200 percent.
"Although the U.S. government preaches rule of law to the Chinese government, the artificial dumping rates have led [China] to have a very cynical view of U.S. laws," writes Perry. "This view leads the Chinese government to twist its own laws, including the Chinese antitrust law, when applied to foreign and U.S. companies."
But wait, there are other contradictions in the U.S. trade treatment of China, both internal and external. A pair of high-profile cases sharpen Perry's argument.
Under economic logic, to levy both antidumping duties based on surrogate prices and anti-subsidy duties will lead to double counting. King & Spalding saw no statutory basis for this principle, and challenged it in a case against China's GPX International Tire Corp. In December 2011 the U.S. Court of Appeals for the Federal Circuit ruled that Congress had tacitly endorsed the tenet of no double remedies in the nonmarket context. But Congress effectively overruled GPX , prompted by Cloutier's lobbying, and expressly authorized double remedies against nonmarket economies.
"When it comes to China," writes Perry, "the Commerce Department's motto is how can we nail you, let us count the ways." Cynical or not, the U.S. position stands in direct opposition to world norms. Although the decision was not even acknowledged by the Federal Circuit in GPX, the WTO Appellate Body had held only a few months earlier, in March 2011, that double remedies against a nonmarket economy violates international trade law.
An even more prominent tension between U.S. law and WTO law is presented by the vitamin C antitrust case. In March 2013, a Brooklyn federal jury held a Chinese vitamin C manufacturer liable for more than $150 million in damages for price-fixing, following more than $30 million in settlements by other companies. A July 2011 WTO panel (later overturned on unrelated grounds) had already attributed the price-fixing to the Chinese government-but the Brooklyn jury found that the Chinese cartel did not act under state compulsion.
The irony is that fixing vitamin C prices was an attempt to avoid U.S. anti-dumping duties for driving prices too low, according to China's Ministry of Commerce. The U.S. wins either way, writes Perry: "Smash Chinese companies ... with anti-dumping cases based on bogus numbers, and if the Chinese government tries to set an export price floor to deter dumping cases, slam China at the WTO," while U.S. companies sue their Chinese rivals in antitrust.
Sidley Austin's Joel Mitnick-who represented China's Ministry of Commerce in the Brooklyn case, its first venture into the U.S. courts-argued on appeal in January that the court should have deferred to the China's statement that it ordered the price floor. "The notion that a Brooklyn jury should sit in judgment on a foreign nation's industrial policy is absurd," he says. Court watchers agree that the Second Circuit panel showed sympathy for the comity argument. But it remains to be seen whether a remand would compel reversal, or leave the trial court discretion to respect China's statement without kowtowing.
At least the U.S. courts in the vitamin C litigation-unlike the GPX case-were aware of the WTO ruling. Even so, the key question on appeal is the legal consequence of China's position. The WTO ruling itself is regarded as legally inconsequential in the U.S. legal order.
Fordham Law School professor Thomas Lee would like to see that change, as he explains in a forthcoming article in the European Journal of International Law called "Double Remedies in Double Courts." Happily, a test case is likely to appear.
In late 2001, the U.S. negotiated an agreement on China's entry to the WTO. When it expires in late 2016, Perry expects China to argue that the U.S. is obligated, under the agreement's letter and spirit, to give China market economy status. Cloutier expects the U.S. to respond that there is no such obligation unless China meets all statutory criteria for a market economy, including a convertible currency. Around December 2016, the Commerce Department will probably send a Chinese company a questionnaire using nonmarket methodology. The Chinese company will argue in administrative proceedings that this methodology is inapt, and the question will bubble up from there to the highest forums of both global and domestic trade law, including the WTO and the U.S. Supreme Court.
What Lee would like to see is the U.S. courts scrap the model of ignoring the WTO (more politely known as dualism) in favor of a dialogue with international judges who struggle with the same issues.
The Global Lawyer doesn't expect the Supreme Court to become a paragon of cosmopolitanism, but it's probably likelier than Congress or the Commerce Department angering U.S. manufacturers. As a matter of fairness and economic diplomacy, one branch or another of the U.S. government ought to give China the respect it deserves as a mostly free market of incredible dynamism. Or elsethe trade wars will escalate, and spread to new fields of law//. Qualcomm wasn't the first company caught in the cross-fire, and it won't be the last.

A US-China trade war wrecks global trade norms---causes military conflict

Beams 16 – member of the International Editorial Board of the World Socialist Web Site, and an internationally-recognised expert on Marxist political economy. He has written extensively and delivered public lectures in many countries on the global financial crisis, globalisation and the collapse of the USSR (Nick, “Economic Conflicts Threaten Global Trade War,” http://www.globalresearch.ca/economic-conflicts-threaten-global-trade-war/5528689)BB
The ongoing stagnation in the global economy, marked by falling investment and the emergence of overproduction in key basic industries, is fuelling the rise of trade war protectionist measures by the major powers, above all the United States.
Last week, the US International Trade Commission (ITC) launched an investigation into Chinese steel mills which have been accused by the United States Steel Corp of stealing secrets and conspiring to fix prices.
Chinese industrial overcapacity, especially in steel, will be on the agenda of the “strategic and economic” dialogue to be held between the US and China in Beijing next week. The US treasury undersecretary for international affairs, Nathan Sheets, recently called for China to allow its industries to “better reflect capacity and global demand conditions.” In other words, China should cut back production.
Overproduction in the Chinese steel industry has been blamed for an increase in cheap exports and the loss of jobs and plant closures in both Europe and the US.
Recent tariffs on imports of steel have boosted American prices, but authorities are looking for further measures. Industrial overcapacity was important “for the global economy and we hope to make some progress on it” in Beijing, Sheets told a meeting at the Brookings Institution in Washington.
The issue is fraught, however, with contradictions because many industrial companies in the US are dependent on cheap steel imports for their business models. Stuart Barnett, the head of the Chicago-based Barsteel Corp which supplies a range of manufacturers said the government had done a “pretty good job” of keeping out the cheapest steel imports. “But now the greatest fear we have is that China keeps cheap steel for itself and makes products that undercut other industries,” he said.
In other words, suppression of the increasingly ferocious struggle for markets and profits in one area of the industrial economy will see it resurface in another.
Pressure from the US for China to cut back production and exports were met with a sharp response from the Chinese government.
Speaking at a briefing in Beijing on Thursday, Zhu Guangyao, China’s vice-finance minister, said: “Trade disputes between China and the US should be addressed in accordance with World Trade Organisation (WTO) principles. We are opposed to abusive trade remedy measures.”
There was an even stronger reaction from China’s Hebei Iron and Steel Group, the country’s largest steel producer. In a statement posted on its website on Thursday, it denounced the investigation by the US ITC.
“The protectionist behaviour taken by the US on purely groundless accusations by US Steel has seriously broken WTO rules, distorted the normal world steel trade and damaged the essential interests of Chinese steel mills and US steel users,” it said.
US Steel filed the complaint a month ago, claiming it was the victim of a Chinese computer hacking incident in 2011. The ITC has now taken up the case, identifying 40 Chinese steelmakers and distributors as being the subject of investigation.
Baosteel, China’s second-largest steelmaker, the world’s fourth-largest and a target for the ITC probe, said the US was in breach of WTO rules and urged the Chinese government to take all necessary measures to ensure the country’s steel industry received fair treatment.
The ITC case has raised concerns it could be the start of far broader measures, possibly including a wholesale ban on Chinese steel imports, according to Simon Evenett, a professor of international trade at University of St Gallen in Switzerland, who is engaged in monitoring protectionist measures.
“The big thing is really the potential scale of this case versus the pinpricks that we have seen unleashed over the past nine months,” he told the Financial Times. “This should be setting off alarms bells. It is really a nuclear option.”
The conflicts go beyond steel and extend to the entire functioning of the WTO, the international body in charge of regulating the global tradingsystem.They are being fuelled by an aggressive push by the United States on two fronts.
Last week, the US told other WTO members it was vetoing the reappointment of Seung Wha Chang, a respected South Korean expert on international trade law, to a second term on the organisation’s appellate body which adjudicates on international trade disputes. Reappointment for a second term has been standard procedure in the past.
Washington cited several decisions that have gone against the US as a pattern of what it called “overreaching” and arriving at “abstract” decisions.
“The appellate body is not an academic body that may pursue issue simply because they are of interest to them or may be to certain members in the abstract,” the US declared. “It is not the role of the appellate body to engage in abstract discussions.”
Other members of the WTO, including Brazil, Japan and the EU say the US veto risks undermining the independence of the appellate body and the entire system. The EU said the US actions are unprecedented and pose “a very serious risk to the independence and impartiality of current and future appellate body members.”
The US move prompted a highly critical editorial in Wednesday’s edition of the Financial Times. The newspaper noted that in the wake of the collapse of the Doha round of multilateral trade negotiations last year—largely as a result of the US decision to walk away from further discussions—the last thing the WTO needed was another blow to its authority. With the end of the WTO’s role in negotiating global trade deals, its only real remaining function was to adjudicate between governments over existing trade rules and order “miscreants to bring policies into compliance.”
“The fact that the US is now trying to subvert it by removing a judge who happens to disagree with the American viewpoint is seriously disturbing,” it said.
The episode, it continued, also vindicated, at least in this instance, “those critics of the US who say Washington favours global cooperation only insofar as it controls the international institutions that run it. This is a serious charge to which the US remains exposed.”
The issue of the appellate body is linked to another brewing conflict within the WTO. Following its ascension to WTO membership in 2001, China is this year seeking to be accorded “market economy status,” which would make it more difficult to prosecute Chinese companies for alleged dumping, i.e. selling goods at artificially low prices.
The US is reported to have been lobbying hard for the upgraded status not to be granted, against opposition from at least some European powers, as well as Britain. The British government has portrayed itself as China’s “best friend” in the West, as financial interests in the City of London seek to profit from expanded Chinese investment and financial activity. Britain has said that if China is accorded full market status, dumping charges could still be dealt with under WTO rules. But this does not appear to have had any impact on the push by the US to prevent its status being raised.
Under conditions of global overcapacity, persistently suppressed demand, and warnings of a productivity slowdown in major developed economies, global conflicts over trade are deepening, and, together with the endless promotion of economic nationalism, threaten a global trade war similar to that which emerged in the 1930s. In that period, the growth of protectionism served as the antechamber to world war.
Today, the growth of economic nationalism under conditions of another persistent world slump is likewise fuelling conflicts that threaten to erupt into another global conflagration//.

The impact is great power war

Drezner 16 – professor of international politics @ Tufts (Daniel, “Five Known Unknowns about the Next Generation Global Political Economy,” http://www.brookings.edu/~/media/research/files/papers/2016/05/future-global-political-economy-drezner/ios-drezner-web.pdf)
Multiple scholars have observed a secular decline ininterstate violence in recent decades.105 The Kantian triad of more democracies, stronger multilateral institutions, and greater levels of cross-border trade is well known. In recent years, international relationstheorists have stressed that commercial interdependenceis a bigger driver of this phenomenon thanpreviously thought.106 The liberal logic is straightforward. The benefits of cross-border exchange andeconomic interdependence act as a powerful brakeon the utility of violence in international politics. The global supply chain and “just in time” delivery systems have further imbricated national economies into the international system. This creates incentivesfor governments to preserve an open economy evenduring times of crisis. The more that a country’seconomy was enmeshed in the global supply chain,for example, the less likely it was to raise tariffs after the 2008 financial crisis.107 Similarly, global financiers are strongly interested in minimizing political risk; historically, the financial sector has staunchlyopposed initiating the use of force in world politics.108 Even militarily powerful actors must be wary of alienating global capital. Globalization therefore creates powerful pressures on governments not to close off their economies through protectionism or military aggression. Interdependence can also tamp down conflicts that would otherwise be likely to break out during a great power transition. Of the 15 times a rising power has emerged to challenge a ruling power between 1500 and 2000, war broke out 11 times.109 Despite these odds, China’s recent rise to great power status has elevated tensions without leading to anything approaching war. It could be argued that the Sino-American economic relationship is so deep that it has tamped down the great power conflict that would otherwise have been in full bloom over the past two decades. Instead, both China and the United States have taken pains to talk about the need for a new kind of great power relationship. Interdependence can help to reducethe likelihood of an extreme event—such as agreat power war—from taking place. Will this be true for the next generation economy as well? The two other legs of the Kantian triad—democratization and multilateralism—are facing their own problems in the wake of the 2008 financial crisis.110 Economic openness survived the negative shock of the 2008 financial crisis, which suggests that the logic of commercial liberalism will continue to hold with equal force going forward. But some international relations scholars doubt the power of globalization’s pacifying effects, arguing that interdependence is not a powerful constraint.111 Other analysts go further, arguing that globalization exacerbates financial volatility—which in turn can lead to political instability and violence.112 A different counterargument is that the continued growth of interdependence will stall out. Since 2008, for example, the growth in global trade flows has been muted, and global capital flows are still considerably smaller than they were in the pre-crisis era. In trade, this reflects a pre-crisis trend. Between 1950 and 2000, trade grew, on average, more than twice as fast as global economic output. In the 2000s, however, trade only grew about 30 percent more than output.113 In 2012 and 2013, trade grew less than economic output. The McKinsey Global Institute estimates that global flows as a percentage of outputhave fallen from 53 percent in 2007 to 39 percent in2014.114 While the stock of interdependence remains high, the flow has slowed to a trickle. The Financial Times has suggested that the global economy has hit “peak trade.”115 If economic growth continues to outstrip trade, thenthe level of interdependence will slowly decline,thereby weakening the liberal constraint on great power conflicts. And there are several reasons to posit why interdependence might stall out. One possibility is due to innovations reducing the need for traded goods. For example, in the last decade, higher energy prices in the United States triggered investments into conservation, alternative forms of energy, and unconventional sources of hydrocarbons. All of these steps reduced the U.S. demand for imported energy. A future in which compact fusion engines are developed would further reduce the need for imported energy even more.116 A more radical possibility is the development of technologies that reduce the need for physical trade across borders. Digital manufacturing will cause the relocation of production facilities closer to end-user markets, shortening the global supply chain.117 An even more radical discontinuity would come from the wholesale diffusion of 3-D printing. The ability of a single printer to produce multiple component parts of a larger manufactured good eliminates the need for a global supply chain. As Richard Baldwin notes, “Supply chain unbundling is driven by a fundamental trade-off between the gains from specialization and the costs of dispersal. This would be seriously undermined by radical advances in the direction of mass customization and 3D printing by sophisticated machines…To put it sharply, transmission of data would substitute for transportation of goods.”118 As 3-D printing technology improves, the need for large economies to import anything other than raw materials concomitantly declines.119 Geopolitical ambitions could reduce economic interdependenceeven further.120 Russia and Chinahave territorial and quasi-territorial ambitions beyondtheir recognized borders, and the United Stateshas attempted to counter what it sees as revisionistbehavior by both countries. In a low-growth world,it is possible that leaders of either country wouldchoose to prioritize their nationalist ambitions overeconomic growth. More generally, it could be thatthe expectation of future gains from interdependence—rather than existing levels of interdependence—constrains great power bellicosity.121 If greatpowers expect that the future benefits of internationaltrade and investment will wane, then commercialconstraints on revisionist behavior will lessen. Allelse equal, this increases the likelihood of great power conflict going forward.There have been other drivers of the decades-long reduction in militarized interstate disputes. Nuclear deterrence has helped curb violent conflict among the great powers. Multilateral peacekeeping missions mitigate small country conflicts. Even if there is a decline in interdependence, it is possible that the “Long Peace” will endure. Furthermore, it is impossible to predict the degree to which either innovations or geopolitics will lessen the need for international trade. Even technological optimists acknowledge that the future diffusion of 3D printing is unclear. Advocates of networked manufacturing insist that economic openness is a prerequisite for the process to continue.122 And the degree of geopolitical revisionism among great powers might be endogenous—that is to say, preexisting levels of globalization might constrain revisionist impulses, rather than such impulses weakening the globalized economy. If great powers resort to revisionist foreign policies, however, then the global economy will start to resemble the Cold War era of economic blocs and strategic embargoes—one in which trade and investment follow the flag rather than follow the rate of return. The increased American use of targeted financial sanctions, for example, has already generated grumblings from peer competitors about finding ways to diversify away from reliance upon the dollar.123 In 2015, China introduced its own international payment and settlements system, in part, to diversify away from reliance upon the dollar.124 The correlation of economicflows with geopolitical alliances would notjust have a profound effect on cross-border flows;it would likely lead to the fragmentation of global economic governance.Just as significantly, greatpower governments would reverse post-Cold War trends and choose to allocate more scarce resources towards their militaries.

Independently, failure to grant MES causes China to opt-out of WTO obligations

Winters 16 - Professor of Economics at the University of Sussex and former Chief Economist at the Department for International Development (L. Alan, January 20, Borderlex interview with L. Alan Winters, INTERVIEW: L. Alan Winters on China MES – “a coordinated view would look like the rest of the world is ganging up on China”, http://www.borderlex.eu/interview-l-alan-winters-china-market-economy-status/)SLR
Q: What happens if the EU and the West more broadly do not grant China market economy status treatment in 2016? Are there systemic implications of the decision? And should the EU coordinate its views with the United States and other WTO economies facing a similar decision? My reading is that there is a fairly significant systemic danger. The Chinese have been smarting about the market economy issue ever since the Protocol of Accession [in 2001]. They take it very seriously. I think they would not let is pass unremarked. But quite what their reaction would be is difficult to know. It is very likely that one would see a series of retaliatory antidumping actions. These actions then may or may not be legitimate and one may or may not be able to get dispute settlement in the WTO to overturn them. But that would be an extremely messy and rather unpleasant, inefficient process. An other issue to worry about is that the Chinese declare that rather than being very good WTO citizens, which they absolutely have been over the last fifteen years, they are going their own way, and withdraw from cooperation in the WTO. I don’t know what the probability of this is, but it is clearly a possibility. Even if they don’t do it, they could threaten to do that. The market economy status issue is iconic for China. It raises systemic pressures between the EU and China. A coordinated view is going to look like the rest of the world is ganging up on China. I do agree that one could start a negotiation such as postponing some aspects of market economy status recognition. The Chinese are very pragmatic. That is something one could well be done in a coordinated fashion. And China might be moderately cooperative. But the idea that the big Western powers are going to get together and say “you know what, none of us is going to give you market economy status”, I feel that would be awfully aggressive//.

Chinese buy-in to WTO norms is key to long-term survival of the WTO

Brown 9 - Associate Professor in the Department of Economics and International Business School at Brandeis University and a Non-Resident Fellow in the Global Economy and Development Program at the Brookings Institution (Chad, “U.S.--China Trade Conflicts and the Future of the WTO,” 33 Fletcher F. World Aff. 27, Lexis)BB
This is why the WTO rules that limit any U.S. retaliation are also a long-term benefit to the system. While the disputes in Geneva will feature political theater and rhetoric over impending trade wars, it is critical to highlight that retaliation is now simply a part of the process. One feature of the WTO that makes it especially attractive as an institution is that its rules and an impartial set of arbiters will ultimately limit the amount of retaliation the United States will be authorized to undertake to roughly the size of the trade lost due to the policies under dispute in the China cases. The rules are designed to prevent bilateral skirmishes over a few hundred million dollars of trade in auto parts, movies, music, and books from spilling over into an unlimited retaliation affecting hundreds of billions dollars--i.e., a retaliation that would cause the global trading system to become completely unglued.
Furthermore, there are signs that all parties to these disputes have been preparing for this day. As already mentioned, while China has been the primary litigant in very few WTO disputes up until now, it has been an official "third party" observer in over sixty disputes involving other WTO member countries, likely as a learning strategy. Furthermore, even the adjudicators are getting ready, as the WTO as an institution recently appointed a Chinese national for the first time to sit as a judge for a four year term as part of its Appellate Body, the judicial organ that handles all WTO dispute settlement appeals. 14 The WTO membership, including the United States, clearly gave China one of the prime insider positions within the judicial process out of recognition that Beijing's continued support of the institution and willingness to play by its rules is a critical element to the long-term survival of the WTO//.

WTO solves nuclear war---credibility and resilience is key

Hamann 9 - associate in Lewis, Roca, Rothberger’s Litigation Practice Group, J.D. from Vanderbilt University Law School
(GEORGIA L. Hamann, May 2009, “Replacing Slingshots with Swords: Implications of the Antigua-Gambling 22.6 Panel Report for Developing Countries and the World Trading System”, http://www.vanderbilt.edu/jotl/manage/wp-content/uploads/hamann-cr_final_final.pdf)BB
Voluntary compliance with WTO rules and procedures is of the utmost importance to the international trading system.100 Given the increasingly globalized market, the coming years will see an increase in the importance of the WTO as a cohesive force and arbiter of disputes that likely will become more frequent and injurious.101 The work of the WTO cannot be overstated in a nuclear-armed world, as the body continues to promote respect and even amity among nations with opposing philosophical goals or modes of governance.102 Demagogues in the Unites States may decry the rise of China as a geopolitical threat,103 and extremists in Russia may play dangerous games of brinksmanship with other great powers, but trade keeps politicians’ fingers off “the button.”104 The WTO offers an astounding rate of compliance for an organization with no standing army and no real power to enforce its decisions, suggesting that governments recognize the value of maintaining the international construct of the WTO.105 In order to promote voluntary compliance, the WTO must maintain a high level of credibility.106
*start footnote 6*
See Rufus Yerxa, supra note 100, at 4 ("The WTO System works only to the extent Members want it to work, and only if they decide that compliance is in their overall economic interest. It therefore rests on the credibility of the rules, and also on the credibility of the dispute settlement decisions."); see also Debra P. Steger, Peace Through Trade: Building the WTO 290-91 (2004) (linking issues of the WTO's "external legitimacy" to the effectiveness of the institutional decision).
*end footnote 106*
Nations must perceive the WTO as the most reasonable option for dispute resolution or fear that the WTO wields enough influence to enforce sanctions.
*Start footnote 107*
The goal of the WTO is to prevent unilateral decisions as to the justifiability of trade retaliation, a goal which can only be upheld by global adherence to the WTO and condemnation of unilateral retaliation outside it. See Gabrielle Marceau, Consultations and the Panel Process in the WTO, in Key Issues In WTO Dispute Settlement: The First Ten Years, supra note 17, at 29, 30-31; see also Marcelo de Paiva Abreu, Trade in Manufactures: The Outcome of the Uruguay Round and Developing Country Interests, in The Uruguay Round and the Developing Countries, supra note 12, at 59, 69 (discussing the importance of "the WTO's capacity to create a level playing field among contracting parties of different sizes and heterogeneous bargaining power").
*end footnote 107*
The arbitrators charged with performing the substantive work of the WTO by negotiating, compromising, and issuing judgments are keenly aware of the responsibility they have to uphold the organization’s credibility//.108

A2 – relations

The plan promotes sustainable US-China cooperation---it’s comparatively the most important gesture to China, and defuses other areas of tension

Ikenson 12 – MA in economics @ GWU, former director of international trade planning for an international accounting and business advisory firm (Daniel, “Trade Policy Priority One: Averting a U.S.-China “Trade War”,” Free Trade Bulletin, No. 47)//BB
U.S. policymakers — with the help of a sympathetic media — scapegoat China for a host of homegrown policy shortcomings and assume the inevitability of a bitter rivalry that forecloses the possibility of a mutually beneficial bilateral relationship. The president frequently refers to the imperative of beating China or “winning the future” as a justification for subsidies and industrial policy. The recent establishment of an interagency task force devoted to trade enforcement is so transparently targeted at China as to be provocative. Likewise, the ongoing Trans-Pacific Partnership trade negotiations have been pitched by the administration as a component of its “pivot” toward Asia to counterbalance China’s rise. The administration touts its security and foreign policy aspects more frequently than its economic benefits.
Defending U.S. interests in the realm of international trade rules is a legitimate obligation of U.S. officials, but failure to avert a trade war would constitute perhaps the worst dereliction of that duty. So rather than saber rattle over arguably discriminatory Chinese trade policies, U.S. officials should look for actions, gestures, or even changes in tone that could help reduce bilateral frictions.
Reversing Trend and Reducing Tensions
When China joined the WTO in December 2001, one of the many terms it agreed to was to allow the United States to continue treating it as a “nonmarket economy” under U.S. antidumping law for a period of 15 years. The nonmarket economy methodology is a farcically inaccurate way to measure dumping, which usually produces egregiously high antidumping duties, making continued importation from Chinese exporters too risky or too costly for U.S. importers.7 There are precious few policy actions that would win more goodwill from the Chinese government than a decision by President Obama to graduate China to market economy status now — instead of waiting until 2016. A recent court ruling gives the president the perfect opening to offer that olive branch.
In December, the U.S. Court of Appeals for the Federal Circuit ruled that it is illegal for the executive branch to apply the U.S. countervailing duty law to imports from countries considered to be nonmarket economies under U.S. antidumping law. President Obama can accept that decision, which would require his rescinding 24 U.S. CVD measures already in effect, terminating five pending CVD investigations, not acting upon two recent case filings, and forbidding his agencies from initiating any new CVD investigations on nonmarket economies henceforth. That would be the best option, but it is highly unlikely.8 Second, he can seek changes in the law to make it expressly Congress’s intent that the CVD law apply to nonmarket economies. That would likely spark harsh reprisals from Beijing in the form of retaliatory tariffs and other market restrictions, as the U.S. measures are perceived as a direct affront to Chinese exporters.
There is a third alternative available, which does not require legislative action, would permit Commerce to simultaneously apply the CVD and antidumping laws to imports from China, and would be considered a gesture of goodwill by the Chinese government. That alternative is for the president to designate China a “market economy” for purposes of the antidumping law — something that the United States is obligated to do under international treaty by no later than December 11, 2016, anyway. Yes, there will be opposition from the interests cited above — labor unions, certain import-competing industries, like steel, and trade lawyers who make their living arguing for measures that would restrict the ability of Americans to trade. But the president should do what he can to avoid a potentially serious fallout with Beijing over trade.
To the extent that unions and domestic industries want to continue to use the CVD law against imports from China, granting China a market economy designation would solve the impasse. The Chinese government wants its exporters to be treated like other countries’ exporters, and the United States is obliged to grant that status by 2016. Why not do it now? Chinese exporters would be subject legally to both the antidumping and countervailing duty laws, and they’d actually be happy enough about the change that the crucial bilateral relationship would gets a much-needed boost.
From the perspective of a free trader, that solution is far from ideal: it preserves domestic industries’ access to the antidumping law and countervailing duty laws, both of which produce egregiously punitive duties on imports and are ripe for serious reform or outright repeal.
But the benefit of granting market economy status to China now is that it will help slow, and possibly reverse the deterioration in bilateral economic relations. And that would be an important benefit for all of us.
Conclusion
There is no question that some Chinese policies have been discriminatory and provocative, and that the U.S. government has been right to challenge those policies, both formally and informally. But the U.S. government has also indulged in protectionism and made some poor choices that have and will continue to fuel bilateral disputes. There is plenty of blame to go around for the heightened bilateral tensions.
The most significant determinant of the quality and direction of the U.S.-China relationship is American self-confidence. In other words, U.S.-China relations will be driven more by actions in Washington than by actions in Beijing. If the U.S. economy starts to grow at a stronger pace and businesses begin to invest and hire more rigorously, the temptation of politicians and the media to scapegoat China for self-induced, domestic woes will diminish.
Even though China-bashing polls well, responsible policymakers should be looking beyond the politics to find bridges, olive branches, and solutions that remind people in both countries of the importance and mutual benefits of the relationship. Gestures of goodwill could go a long way toward stopping and reversing the recent deterioration of relations.

Economics outweighs security

Wyne 15 – Adjunct staff @ RAND, Fellow @ Atlantic Council, MPP @ Harvard (Ali, “The Strategic Importance of U.S.-China Trade Ties,” Carnegie Council, http://www.carnegiecouncil.org/publications/ethics_online/0106)BB
At the end of March 2015, the commander of the U.S. Pacific Fleet told an audience in Canberra that "China is creating a great wall of sand" in the South China Sea. He warned that the course it pursues in addressing its maritime disputes "will be a key indicator of whether the [Asia-Pacific] region is heading towards confrontation or cooperation." In an April 9 press conference, meanwhile, Chinese Foreign Ministry Spokeswoman Hua Chunyin conceded—for the first time, according to veteran China watcher Bonnie Glaser—that at least some of China's land reclamation on Mischief Reef serves military purposes. A week later, the French government released satellite imagery showing that China is building a roughly 10,000-foot-long runway on Fiery Cross Reef. China claims the United States is feigning concern over China's maritime activities to isolate the mainland: observes a recent Xinhua editorial, "deeper U.S. involvement in the South China Sea issue and its…efforts to drive wedges between China and some Southeast Asian nations are aimed at strengthening its military presence in the Asia-Pacific region."
Given these developments, it is natural to fear that a miscalculation at sea could spiral into an armed confrontation between the United States and China; some observers, such as the University of Pennsylvania's Avery Goldstein, have even ventured that such a clash could involve nuclear weapons. To their credit, the two countries are taking steps to preempt destabilizing contingencies. In November 2014, for example, the U.S. Department of Defense and the Chinese Ministry of National Defense signed a memorandum of understanding on "rules of behavior for safety of air and maritime encounters" and another on "notification of major military activities."
While the escalatory potential of China's maritime disputes is foremost on many observers' minds, the greatest long-term threat to U.S.-China relations// may be something far less vivid: the gradual weakening of economic, and especially trade, interdependence between the two countries. Aside from the sobering historical record—conflicts between leading powers and rising ones have often culminated in disaster—that interdependence has arguably done more than any other phenomenon to furnish a rationale for sustained cooperation between the United States and China, whose relationship lacks the sorts of organic factors that dissuade many other pairs of countries from contemplating conflict: shared values, comparable systems of governance, and compatible understandings of history, to name a few.

Specifically---the plan sustains cooperation over Korea, the Middle East and climate change

Deynoot 16 – MA International Conflict and Security @ Kent; Consultant, EU Public Affairs @ Weber-Shandick (Christiaan, “Towards China’s Market Economy Status,” April, http://webershandwick.be/wp-content/uploads/2016/03/Weber-Shandwick-Report-Towards-China-Market-Economy-Status_April-2016.pdf)BB
As it currently stands, the prospect of any quick agreement between the three economies is becoming increasingly implausible. In summary: • Beijing’s official position towards MES has been straightforward from the start. Simply put, China should automatically be granted MES under WTO rules at the end of this year. Furthermore, it should not be subjected to additional criteria not stipulated in its Accession Protocol, such as the domestic criteria currently used to determine what constitutes a market economy in the U.S. and the EU. • The Obama administration is taking a position of non-action. The U.S. Department of Commerce says it will not automatically grant MES but instead consider if China meets the statutory criteria for doing so in the context of individual anti-dumping cases. The administration says there is no provision in U.S. law that requires China to be treated as a market economy for anti-dumping purposes after December 2016. In fact, the U.S. would prefer China to bring a challenge to the WTO, which would put the onus on Beijing to prove that its economic model is meeting the criteria of a market economy. • The EU has yet to define its position. An opinion from the European Commission’s legal service stated that the EU is obligated under WTO law to take China off its list of nonmarket economy countries in December. The Commission would have to submit a legislative proposal to the co-legislators; the Council of the EU, which represents the government of its Member States, and the European Parliament. Considering how politically charged this debate is, a pro-China compromise will be difficult to reach. Adding further complexity is the need for the EU and the U.S. to coordinate with key WTO members such as Japan. Should either decide to accept China as a market economy and lower its trade defences, it will be crucial to prevent unwanted trade diversion of Chinese exports. Expect the unexpected Economic and political debates on trade should never be seen in isolation. They always take place in a broader diplomatic context. As highlighted at the outset, continuing with business as usual may lead to retaliation from China. Beyond the prospect of a case at the WTO Dispute Settlement Body, Beijing could also consider retaliation in other areas, whether in the context of security issues in the Korean Peninsula or the Middle East, the implementation ofthe Paris Climate Agreement//, or a straightforward ban on specific companies from entering its market. Such diplomatic tensions could also have negative ramifications for China. Straining bilateral ties could for example boost EU-U.S.-Japan cooperation in shaping the global trade system, as they remain committed to salvaging their position as global standard-setters.

US-China climate cooperation solves warming

Atlantic Council 13 (September,Working Group Members: Chu Shulong, Deputy Director, Institute of International Strategic and Development Studies, Tsinghua University • Da Wei, Director, Institute of American Studies, China Institutes of Contemporary International Relations • Du Lan, Assistant Research Fellow, Department of American Studies, China Institute of International Studies • Huang Ping, Director General, Institute of American Studies, Chinese Academy of Social Sciences • Jin Canrong, Professor and Associate Dean, School of International Studies, Renmin University of China • Liu Qing, Associate Research Fellow, Department of American Studies, China Institute of International Studies • Qu Xing, President, China Institute of International Studies • Ruan Zongze, Vice President, China Institute of International Studies • Wang Fan, Director, Institute of International Relations, Mathew Burrows, former Counselor, US National Intelligence Council; Director, Strategic Foresight Initiative, Brent Scowcroft Center on International Security, Atlantic Council • Thomas Fingar, Oksenberg-Rohlen Distinguished Fellow, Freeman Spogli Institute for International Studies, Stanford University • Banning Garrett, Strategic Foresight Senior Fellow for Innovation and Global Trends, Brent Scowcroft Center on International Security, Atlantic Council • Sherri Goodman, Senior Vice President, General Counsel, and Corporate Secretary, CNA • Barry Hughes, Professor and Director, Frederick S. Pardee Center for International Futures, Josef Korbel School of International Studies, University of Denver • Robert Manning, Senior Fellow, Brent Scowcroft Center on International Security, Atlantic Council • Paul Saffo, Consulting Professor, Stanford University; Senior Fellow, Strategic Foresight Initiative, Brent Scowcroft Center on International Security, Atlantic Council • Jonathan Woetzel, Director, McKinsey & Company • Casimir Yost, former Director, Strategic Futures Group, US National Intelligence Council China Foreign Affairs University • Wang Yizhou, Associate Dean, School of International Studies, Peking University China-US Cooperation: Key to the Global Future, http://www.ciis.org.cn/english/2014-01/13/content_6606656.htm)SLR
Cooperation on climate change mitigation, adaptation, and consequence management. China-US cooperation will be increasingly critical to the global response to climate change. New scientific studies warn that the worst-case scenarios for climate change impacts are the most likely outcomes. Scientific assessments also maintain that anthropomorphic climate change is partly responsible for extreme weather events that the world is already experiencing at an increasing rate, from the floods in Pakistan and the heat wave in Russia to the melting glaciers and ice sheets and the “superstorm” Sandy that inflicted unprecedented destruction on New York and New Jersey. It is highly likely that global climate change will be a key issue in the coming two decades as the world faces increasing climate-induced humanitarian disasters and infrastructure destruction requiring immediate and expensive relief as well as costly, long-term adaptation. Climate change likely will increase social and political instability in many areas of the world, including emerging economies and developed countries. It also will likely renew political pressure for emissions reductions, especially by China and the United States, the world’s two biggest emitters. China-US cooperation in all these areas will be critical to whether the world cooperates and how effective any cooperation is in responding to the potentially existential threat posed by global climate change.// The two countries also can build on decades of bilateral cooperation on energy and environment to seize opportunities for lucrative joint energy technology development that would substantially benefit Chinese and US businesses as well as lower costs and widely disseminate clean energy technologies.

The impact is extinction---geological history proves

Bushnell 10 - MS in mechanical engineering, won the Lawrence A. Sperry Award, AIAA Fluid and Plasma Dynamics Award, the AIAA Dryden Lectureship, and is the recipient of many NASA Medals for outstanding Scientific Achievement and Leadership
Bushnell (Dennis, "Conquering Climate Change," The Futurist 44. 3, May/Jun 2010, ProQuest)
Unless we act, the next century could see increases in species extinction, disease, and floods affecting one-third of human population. But the tools for preventing this scenario are in our hands.Carbon-dioxide levels are now greater than at any time in the past 650,000 years, according to data gathered from examining ice cores. These increases in CO2 correspond to estimates of man-made uses of fossil carbon fuels such as coal, petroleum, and natural gas. The global climate computations, as reported by the ongoing Intergovernmental Panel on Climate Change (IPCC) studies, indicate that suchman-made CO2 sources could be responsible for observed climate changes such as temperature increases, loss of ice coverage, and ocean acidification. Admittedly, the less than satisfactory state of knowledge regarding the effects of aerosol and other issues make the global climate computations less than fully accurate, but we must take this issue very seriously. I believe we should act in accordance with the precautionary principle: When an activity raises threats of harm to human health or the environment, precautionary measures become obligatory, even if some cause-and-effect relationships are not fully established scientifically. As paleontologist Peter Ward discussed in his book Under a Green Sky, several "warming events" have radically altered the life on this planet throughout geologic history. Among the most significant of these was the Permian extinction, which took place some 250 million years ago. This event resulted in a decimation of animal life, leading many scientists to refer to it as the Great Dying. The Permian extinction is thought to have been caused by a sudden increase in CO2 from Siberian volcanoes. The amount of CO2 we're releasing into the atmosphere today, through human activity, is 100 times greater than what came out of those volcanoes. During the Permian extinction, a number of chain reaction events, or "positive feedbacks," resulted in oxygen-depleted oceans, enabling overgrowth of certain bacteria, producing copious amounts of hydrogen sulfide, making the atmosphere toxic, and decimating the ozone layer, all producing species die-off. The positive feedbacks not yet fully included in the IPCC projections include the release of the massive amounts of fossil methane, some 20 times worse than CO2 as an accelerator of warming, fossil CO2 from the tundra and oceans, reduced oceanic CO2 uptake due to higher temperatures, acidification and algae changes, changes in the earth's ability to reflect the sun's light back into space due to loss of glacier ice, changes in land use, and extensive water evaporation (a greenhouse gas) from temperature increases. The additional effects of these feedbacks increase the projectionsfrom a 4°C-6°C temperature rise by 2100 to a 10°C-12°C rise, according to some estimates. At those temperatures, beyond 2100, essentially all the ice would melt and the ocean would rise by as much as 75 meters, flooding the homes of one-third of the global population. Between now and then, ocean methane hydrate release could cause major tidal waves, and glacier melting could affect major rivers upon which a large percentage of the population depends. We'll see increases in flooding, storms, disease, droughts, species extinctions, ocean acidification, and a litany of other impacts, all as a consequence of man-made climate change. Arctic ice melting, CO2 increases, and ocean warming are all occurring much faster than previous IPCC forecasts, so, as dire as the forecasts sound, they're actually conservative.

US-China cooperation over the Korean peninsula solves conflict---new crises are likely and only US and China can defuse escalation

Gady 16 (Franz-Stefan Gady is an Associate Editor with The Diplomat, a Senior Fellow with the EastWest Institute, and has worked previously as an adjunct research assistant at the Institute for National Strategies Studies of the National Defense University in Washington, D.C., an analyst for the Project on National Security Reform, a congressionally funded nonprofit organization founded to reform the national security structure of the United States. He holds an M.A. in Strategic Studies/International Economics. “Sino-US Cooperation Over North Korea Is Now More Important Than Ever,” The Diplomat, March 19, 2016, http://thediplomat.com/2016/03/sino-us-cooperation-over-north-korea-is-now-more-important-than-ever/)wm
China and the United States share the same short-term interests on the Korean Peninsula, perhaps best summarized in Beijing’s long-standing policy vis-à-vis North Korea of “no war, no instability, no nukes.” (、不乱、无核) Neither side is interested in a military solution to ongoing tensions between North and South Korea. Neither party, despite US rhetoric to the contrary, wants to topple the Kim Jong-un regime and see the North descend into chaos amid a succession or unification crisis. And neither Beijing nor Washington desire a nuclear-armed North Korea further fueling tensions in an already volatile region of Asia.
China and the United States continue to disagree on the right tactical approach to achieving these three objectives—the former preferring quiet diplomacy and continuous engagement with Pyongyang, the latter favoring publicly pressuring the regime with sanctions to change its behavior— and both countries also pursue markedly different long-term strategic goals on the Korean Peninsula. However, the Obama administration’s policy of “strategic patience” (putting pressure on the regime while calling for North Korea to return to the Six-Party Talks) is a de facto acceptance of the unlikelihood of the reunification of North and South Korea in the near future. As a consequence, there will be no way around Kim Jong-un in the years ahead, and Beijing and Washington will have to find a way to deal with the regime, no matter how distasteful.
Apart from this apparent confluence of Chinese and US interests, there are three reasons why both countries need to cooperate more tightly than ever on managing the ongoing crisis on the Korean Peninsula. First, given the Republic of Korea (ROK) government’s uncompromising stance with respect to North Korean provocations, there will be an increased chance of more severe inter-Korean crises occurring over the next two years. (There will be little chance of a Korean-led détente initiative until the end of the presidency of Park Geun-hye in 2018, given the government’s current policies.) Second, notwithstanding repeated calls for putting a “military option” back on the table, a large-scale joint US-ROK military operation against North Korea is increasingly becoming less realistic. Third, ongoing tensions on the Korean Peninsula have the potential to undermine trust and increase military competition between China and the United States, a development that is set to detrimentally affect overall Sino-US relations and cannot be in the interest of either party.
Seoul, under the government of Park Geun-hye and after repeated provocations from the North, has abandoned engagement and stepped up its bellicose rhetoric and uncompromising stance against North Korea. Over the last decades, both sides have mastered the game of bringing tensions to the precipice and then pulling back. However, as tensions rise, there is less and less flexibility in this perennial brinkmanship with both sides in danger of losing control during a future confrontation as martial propaganda and provocations will reach unprecedented heights. In addition, there is little understanding how much control Kim Jong-un genuinely exercises over the military and the party and whether they would stand down in the face of South Korean provocations when given the order by the supreme leader.
Certain South Korean policies have also helped to further fuel tensions. For example, ever since 2010, South Korea has implemented a “disproportional response” theory of deterrence. As John Delury, a professor at Yonsei University, explained in an interview with The Diplomat: “Seoul has proclaimed that for every one shot fired by the North, the South will hit back with 3 to 5 times greater force. That principle for deterring the North along the contested maritime border seems to apply to the DMZ [Demilitarized Zone] as well.” This concept of deterrence increases the chance of an escalating spiral of attacks and counter-attacks that could eventually lead to full-scale war.
A military confrontation on the Korean Peninsulahas the potentialto once more draw in both the United States and China. Beijing is committed to the defense of the North under the 1961 Sino-North Korean Treaty of Friendship, Cooperation and Mutual Assistance, whereas the United States and South Korea have kept a mutual defense treaty since 1953. However, China has repeatedly said that in a conflict provoked by the North, it would not uphold its treaty obligations. (Indeed, according to a US scholar, China has tried to have the clause requiring it to defend North Korea revoked.)
Any type of large-scale military operation on the Korean Peninsula will almost certainly involve large-scale destruction of human life and property. As the commander of US forces in South Korea, General Curtis Scaparrotti recently testified: “Given the size of the forces and the weaponry involved, this would be more akin to the Korean War and World War II–very complex, probably high casualty.” North Korean artillery could shell Seoul with thousands of rounds within the first hour of a full-scale war.
Yet, certain weapon systems could make a confrontation even worse than the Korean War. Next to an arsenal of approximately 700 (potentially nuclear-armed) Soviet-designed short-range ballistic missiles (and an unknown number of intermediate-range and long-range missiles), North Korea also has one of the world’s largest chemical weapons stockpiles including mustard, phosgene, and sarin gas. According to a RAND study cited by the Congressional Research Service, “One ton of the chemical weapon sarin could cause tens of thousands of fatalities.” Pyongyang has also made substantial investments in special operations forces, cyber weapons, and unmanned aerial vehicles to offset the South’s conventional military advantage.
Even short of full-scale war, the tensions on the Korean Peninsula have the potential to derail the Sino-US relationship. For example, China vehemently is opposing the deployment of Terminal High Altitude Area Defense (THAAD) to South Korea. Yet, Pyongyang’s nuclear and missile tests over the last couple of weeks, finally convinced Seoul to move forward with plans to station the US missile defense system in the South.
China sees the deployment of THAAD as an outright provocation not only designed to thwart North Korea’s missiles but also its own military power. “We are firmly opposed to the deployment of the THAAD system on the Korean Peninsula and urge relevant parties to act cautiously. No harm shall be done to China’s strategic security interests,” China’s Foreign Ministry spokesperson said in March 2016.
While Washington and Seoul could have used the potential deployment of THAAD merely as a threat to obtain China’s cooperation on imposing tougher UN sanctions on North Korea (something US diplomats have denied), the diplomatic consequences of stationing THAAD in South Korea could hobble the Sino-US strategic relationship and cause China to retaliate in other areas, for example in the South China Sea or in cyberspace, where it feels threatened by US military power. This could further fuel the ongoing US-China arms race in the Asia-Pacific region.
Consequently, given ongoing inter-Korean political dynamics, the disastrous consequences of full-scale war on the Korean Peninsula, and the potential of ongoing inter-Korean crises to disrupt and damage the China-US relationship, it is of vital interestto both Beijing and Washington to craft a more constructive approach towards North Korea, centered around dialogue and persistent diplomatic initiatives and despite a new set of UN sanctions. As John Delury noted in an email exchange with The Diplomat: “Sanctions work best when implemented and more important lifted in the context of negotiation, and a robust diplomatic process backed by political will on both [all] sides.” This does not necessarily mean the resumption of Six-Party Talks, but rather quiet backdoor channel diplomacy laying the groundwork for future negotiations.
A diplomatic deal with the United States and South Korea might be useful for Kim Jong-un at this juncture given that it would cement his legitimacy in the upcoming Seventh Korean Workers Party Congress in May 2016. “We should stop fighting the idea of his [Kim Jong-un’s] existence, and instead use our leverage inherent in helping him deepen his legitimacy to get things we want,” according to Delury. One sign that the United States would be open to such a dialogue, presumably spearheaded by China, is that US Secretary of State John Kerry on February 23rd did not outright dismiss the suggestion of Chinese Foreign Minister Wang Yi “to pursue in parallel tracks the denuclearization of the Korean Peninsula and the replacement of the Korean armistice with a peace agreement.” For the time being and no matter how unpleasant, Beijing and Washington have a vested interest in stable relations with Pyongyang and the timing might just be right for a concerted Sino-US diplomatic effort. Indeed, it is a political necessity//.

That triggers nuclear winter and extinction

Hayes and Hamel-Green 9 - Professor of International Relations – RMIT University AND Michael; Dean and Professor of Arts, Education and Human Development – Victoria University
(Peter, “The Path Not Taken, The Way Still Open: Denuclearizing the Korean Peninsula and Northeast Asia,” http://www.nautilus.org/projects/A-J-disarm/research-workshop/drafts/hayes-hamel-green.pdf)
The consequences of failing to address the proliferation threat posed bythe North Korea developments, and related political and economic issues, are serious, not only for the Northeast Asian region but also for the whole international community. At worst, there is the possibility of nuclear next-use1 or even an actualnuclear exchange, whether by intention, miscalculation, or merely accident. On the Korean Peninsula itself, key population centres are relatively close, well within short or medium range missiles. The whole of Japan is likely to come within North Korean missile range. Pyongyang has a population of over 2 million, Seoul (close to the North Korean border) 11 million, and Japan over 130 million. Even a limited nuclear exchange would result in a holocaust of unprecedented proportions. But the catastrophe within the region would not be the only outcome. New research is indicating that even a limited nuclear war in the region would rearrange our global climate far more quickly than global warming. Westberg draws attention to new studies modelling the effects of even a limited nuclear exchange involving approximately 100 Hiroshima-sized 15 kt bombs2 (by comparison it should be noted that the United States currently deploys warheads in the range 100 to 477 kt, that is, individual warheads equivalent in yield to a range of 6 to 32 Hiroshimas).The studies indicate that the soot from the fires produced would lead to a decrease in global temperature by 1.25 degrees Celsius for a period of 6-8 years.3 In Westberg’s view: That is not global winter, but the nuclear darkness will cause a deeper drop in temperature than at any time during the last 1000 years. The temperature over the continents would decrease substantially more than the global average. A decrease in rainfall over the continents would also follow…The period of nuclear darkness will cause much greater decrease in grain production than 5% and it will continue for many years...hundreds of millions of people will die from hunger…To make matters even worse, such amounts of smoke injected into the stratosphere would cause a huge reduction in the Earth’s protective ozone.4 These, of course, are not the only consequences. Whoever uses nuclear weapons in Korea, and especially the first-user, is doomed to possibly win a battle but will certainly lose the political and psychological war, especially among Koreans. Reactors might also be targeted, causing further mayhem and downwind radiation effects, superimposed on a smoking, radiating ruin left by nuclear next-use. Millions of refugees would flee the affected regions. The direct impacts, and the follow-on impacts on the global economy via ecological and food insecurity, could make the present global financial crisis pale by comparison. How the great powers, especially the nuclear weapons states respond to such a crisis, and in particular, whether nuclear weapons are used in response to nuclear first-use, could make or break the global non proliferation and disarmament regimes. There could be manyunanticipated impacts on regional and global security relationships5, with subsequent nuclear breakout and geopolitical turbulence, including possible loss-of-control over fissile material or warheads in the chaos of nuclear war, and aftermath chain-reaction affects involving other potential proliferant states. The Korean nuclear proliferation issue is not just a regional threat but a global one that warrants priority consideration from the international community.

US-China cooperation over the Middle East solves conflict

Alterman 11 (Jon B. Alterman is a senior vice president, holds the Zbigniew Brzezinski Chair in Global Security and Geostrategy, and is director of the Middle East Program at CSIS., “U.S.-China Relations: Cooperating and Contending Over the Middle East” Center for Strategic and International Studies, Middle east program, 2011, https://csis-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/110617_Alterman_ChinaExecSummary.pdf)wm
China, the United States, and the Middle East form a triangle. All three value regional stability and energy security, and each needs strong relations with the other two. Chinese engagement in the Middle East makes some in the United States worry that China could become its rival in the Middle East. Closer Sino-American cooperation can turn the triangle into a source of security rather than tension.Iran is a chief concern. Ensuring that China does not block international collective action is important to build confidence in Sino-American relations. Bilateral cooperation could also venture into new areas//. As Arab states seek stability after recent revolts, Chinese investment could boost stagnant economies and workforces. China could transmit lessons from its own economic growth, which regional governments would likely welcome.

That solves nuclear war

Russell 9 - Russell, Senior Lecturer, National Security Affairs, Naval Postgraduate School
(James A., “Strategic Stability Reconsidered: Prospects for Escalation and Nuclear War in the Middle East” IFRI, Proliferation Papers, #26, http://www.ifri.org/downloads/PP26_Russell_2009.pdf)
Strategic stability in the region is thus undermined by various factors: (1) asymmetric interests in the bargaining framework that can introduce unpredictable behavior from actors; (2) the presence of non-state actors that introduce unpredictability into relationships between the antagonists; (3) incompatible assumptions about the structure of the deterrent relationship that makes the bargaining framework strategically unstable; (4) perceptions by Israel and the United States that its window of opportunity for military action is closing, which could prompt a preventive attack; (5) the prospect that Iran’s response to pre-emptive attacks could involve unconventional weapons, which could prompt escalation by Israel and/or the United States; (6) the lack of a communications framework to build trust and cooperation among framework participants. These systemic weaknesses in the coercive bargaining framework all suggest that escalation by any the parties could happen either on purpose or as a result of miscalculation or the pressures of wartime circumstance. Given these factors, it is disturbingly easy to imagine scenarios under which a conflict could quickly escalate in which the regional antagonists would consider the use of chemical, biological, or nuclear weapons. It would be a mistake to believe the nuclear taboo can somehow magically keep nuclear weapons from being used in the context of an unstable strategic framework. Systemic asymmetries between actors in fact suggest a certain increase in the probability of war – a war in which escalation could happen quickly and from a variety of participants. Once such a war starts, events would likely develop a momentum all their own and decision-making would consequently be shaped in unpredictable ways. The international community must take this possibility seriously, and muster every tool at its disposal to prevent such an outcome, which would be an unprecedented disaster for the peoples of the region, with substantial risk for the entire world.

Solvency

The plan jump-starts relations without damaging US industries

Frisbie 16 - president of the US-China Business Council (USCBC) since November 2004, has more than 25 years of experience in business and government relations with China, including nearly 10 years living and working in Beijing, BA and MBA degrees from the University of Texas at Austin he received several National Resource Fellowships for language study and is fluent in Mandarin Chinese (John, with Erin Ennis, Senior Vice President of the US-China Business Council, “Is China A “Market Economy”? It Doesn’t Matter.,” http://www.uscnpm.org/blog/2016/05/09/is-china-a-market-economy-it-doesnt-matter/)BB
Based on the headlines in the trade press recently, you might get the idea that the United States faces an influx of massive amounts of Chinese steel at the end of this year, thanks to an obscure provision in China’s WTO accession protocol about market economy status.
The widely cited but poorly understood provision will not leave us defenseless to steel or any other products flooding the U.S. market. But mishandling this important issue could damage our credibility and impact U.S.-China relations for years to come. Fortunately, there is a way out – and the question of whether China is a “market economy” has nothing to do with it.
When China joined the World Trade Organization (WTO) in 2001, its government’s pervasive intervention in the economy meant that China’s trading partners could not trust data on the true cost of production and determine a fair market value in anti-dumping cases. A provision in China’s accession agreement resolved this issue by allowing other WTO member countries to use special tariff calculations, known in the U.S. as non-market economy (NME) calculations, in China cases—for a period of 15 years. As a result, the U.S. could use a formula to determine the value of anti-dumping tariffs to apply to Chinese goods sold at unfairly low prices. That provision is set to expire Dec. 11, 2016.
Despite the current rhetoric, that much of the situation is indisputable. Three successive U.S. administrations — all that have served during and since China joined the WTO — have stated over and over again in public and in official documents that the ability to use NME calculations ends after 15 years. As late as 2012, the Obama Administration explained the provision in its annual report to Congress on China’s WTO compliance,
“China’s accession agreement also includes provisions establishing several mechanisms… designed to prevent or remedy injury that U.S. or other WTO members’ industries and workers might experience based on import surges or unfair trade practices. These mechanisms include…the authority for WTO members whose national laws contain market economy criteria as of the date of China’s WTO accession to utilize a special non-market economy methodology for measuring dumping in anti-dumping cases against Chinese companies (this China-specific authority expires after 15 years, running from the date of China’s WTO accession).”
This commitment was integral to getting final agreement with China at the highest levels on the terms of its WTO entry. End-stage negotiations with then-Premier Zhu Rongji specifically included this provision and its definitive end date to close the deal. Breaking the commitment would be enormously detrimental to American interests on other more significant issues with China, and would also encourage the Chinese to think that breaking commitments is acceptable behaviornot a message the United States should convey.
Parts of China’s economy are now functioning as a market economy. At the same time, we can all agree that there are parts of China’s economy that continue to function contrary to market principles. For example, by its own admission, China has significant overcapacity in products such as steel and aluminum. Those industries have benefited from favorable subsidies and other government intervention, with a detrimental effect on both international and China’s own domestic markets.
The key to the current discussion is in what comes next. Many have argued over whether China meets the criteria under U.S. law to be treated as a market economy. A closer reading of China’s WTO accession protocol reveals that this question is irrelevant. The language in the protocol does not require the U.S. to name China as a market economy in December; it simply requires ending the use of the NME methodology – an important distinction that suggests a path forward.
There are several principles that should guide how the U.S. can best approach this issue — a middle ground that would enable us to both meet our WTO commitment and address the clear distortions that some sectors of China’s economy are still creating not only in China but also in global markets:
Honor the commitment and end the use of blanket, across-the-board NMEmethodology.
Be WTO compliant.
Retainour ability to apply U.S.trade remedies when necessary and fact-based.
Not be China-specific – what’s good for China ought to be good to do for any trade partner.
Not require changing U.S. law.
One solution that would appear to fit the above criteria was included in legislation passed by Congress last summer. Section 504 of the Trade Preferences Extension Act, which was signed in to law on June 29, 2015, expanded Commerce’s discretion to assess “particular market situations” in anti-dumping investigations, and to use methodologies other than strict comparisons with domestic prices and costs when it finds that those particular market situations would prevent a proper comparison.
In other words, rather than using non-market methodologies across the board and in all cases, Commerce could use this authority to address the distortions that may remain in some sectors of China’s economy – just as it can do in cases involving other trading partner economies.
There would need to be a rigorous, grounded process for demonstrating a sector or producer qualifies for using an alternative methodology, to avoid simply using this approach for protectionist purposes. The alternative methodology would need to be WTO compliant, but the U.S. has many gifted trade lawyers who should be able to craft an approach to meet this bar. We should also be talking bluntly to the Chinese government, pointing out that we will honor the commitment – and clarifying what that commitment is – yet we will still take steps to ensure their overcapacity problem is not exported to us.
Rather than wasting more time arguing over what the U.S. does not need to do on Dec. 11, we should honor the commitment that three successive administrations have articulated and focus our energy on finding the effective, middle ground solutiona solution which fits squarely into US interests by addressing the distortions of China’s overcapacity in certain sectors and ensuring that US-China relations remain on stable footing//.

Graduating China to a market economy before the deadline and without condition solves US-China relations and promotes global trade liberalization

Watson 14 – JD from Tulane University Law School, and an LLM in international and comparative law from the George Washington University Law School (K William, “Will Nonmarket Economy Methodology Go Quietly into the Night?,” CATO Policy Analysis, No. 763)BB
Ending NME Altogether
While history tells us that U.S.–China trade is likely headed toward years of legal quagmire and diplomatic strife, that future is not inevitable. President Obama has a unique opportunity between now and December 2016 to render the pessimistic predictions moot. Graduating China out of NME status before the deadline, and doing so unequivocally, would do a lot to improve U.S.–China relations and restore U.S. leadership and influence in global trade policy. Ending NME treatment could do a lot to help mend ties between the world’s two greatest trading nations. The sooner the adminis-tration takes action to end NME treatment of Chinese imports the better, as it would send a message that the United States respects China as an equal partner. U.S. trade officials and politicians are constantly accusing China of skirting global trade rules. A common refrain is that China’s newly acquired status as an economic power entails greater responsibility. Such exhortations ring hollow when the United States continues to treat China as a second-class citizen, especially when that treatment violates fundamental rules of the very system that China is expected to value. The U.S. officials and businesses eager to address their many complaints about China’s trade policy should not underestimate the positive effect ending NME status would have on U.S. leverage over China’s trade policies. The NME issue has consistently ranked high on China’s foreign economic policy priorities. For example, China has made revoking NME designation a necessary prerequisite for negotiating bilateral free trade agreements.58 Ending NME treatment would also go a long way toward reducing the troubling trend of tit-for-tat litigation at the WTO. The WTO’s dispute settlement mechanism can be a very effective way to eliminate harmful trade policies and resolve conflicts in a peaceful manner. Unfortunately, both the United States and China have engaged in a practice of retaliatory and strategic litigation where complaints are used as a tool to achieve other policy goals. Abuse of the NME designation has already been used by China as a standby complaint, and this tactic will be even more available if the U.S. government continues NME treatment after the 2016 deadline. In addition to helping U.S.–China relations, making a genuine good faith effort to bring the United States into compliance with international nondiscrimination rules could do a lot to further U.S. interests in the international trading regime. The United States has a strong interest in maintaining the rule of law in global trade relations. Flouting those rules sends a bad signal to other countries, while U.S. actions to accept global trade disciplines will strengthen the system. A course correction on the issue of China’s NME treatment would send a clear signal that the United States values the rules-based trading system, especially the foundational principle of nondiscrimination. Making that change before the 2016 deadline would show even stronger respect for the law and would do much to bolster America’s ability to provide leadership in global trade relations. Bringing the United States into compliance with trade rules and proving its capacity for leadership would also improve the U.S. government’s influence in global trade negotiations. Much of the impasse currently preventing progress in WTO efforts to further liberalize global trade stems from confrontational attitudes between developed countries and emerging economies such as Brazil, India, and China. Neither side trusts the other’s willingness to take on new obligations and reforms, and for good reason. Perhaps U.S. officials are not genuinely interested in bridging that divide, but if they are, addressing the NME issue will be essential.
CONCLUSION
The United States has a choice to make. The end of China’s NME status in December 2016 will necessitate a change in U.S. antidumping policy. Whether that change is for the better is up to U.S. policymakers. Essentially, the choice is between good faith compliance with global trade rules or stubborn adherence to illegal protectionism. Unfortunately, history prompts us to expect the latter. The U.S. antidumping practice against NMEs has always stretched the bounds of law and logic. Even as China’s economy liberalizes, U.S. authorities at the Department of Commerce have increased their use of discriminatory methods to disrupt legitimate trade and to construct higher margins for Chinese exporters. The United States is already operating outside the bounds of current WTO rules, and tit-for-tat trade litigation and retaliation has already begun. What will hap-pen when those rules become much stricter? Commerce has a variety of policy choices it could make, each with different legal and political consequences. The U.S. authorities may simply ignore the new legal landscape and continue to treat China as an NME, or they may acknowledge China’s new status but find other justifications under U.S. law to discriminate against Chinese imports. In either of those scenarios, China will rightly challenge U.S. practice at the WTO. Maintaining some form of discrimination against China within the bounds of WTO rules may be possible. However, designing WTO-compliant tests to gauge the effect of state intervention on domestic price comparability and then applying WTO-compliant methodologies in response may not be sufficiently punitive to attract the interest of antidumping petitioners and investigators. Law and logic are both on the side of ending NME treatment altogether. Instead of spending years litigating at the WTO, trying to find the least illegal way to discriminate against Chinese imports, the United States should embrace the reality of China’s economic transition and WTO membership. Accepting the end of NME treatmentevenbefore the deadline// would strengthen the U.S. position in the inevitably contentious U.S–China trade relationship and would provide a much-needed boost to the United States’ role as a leader in the global trading system.