Trade is not just an economic issue. It's a political issue when you have China in the game.
Trade is not just an economic issue. It's a political issue when you have China in the game.
There's always a tension. Developed countries want as much access as possible for their advanced corporations to all markets around the world. They also want to be able to exploit cheap labor in developing countries without transferring any know-how to local competitors. Developing countries want to be able to export to the large markets in the developed world, but also want to protect their fledgling industries from much stronger competition from the advanced countries. They also want to acquire know-how from the developed world, in order to move up the value chain. Toyota probably wouldn't exist today if Japan hadn't protected it from American competition after WWII. This is why there are special provisions in the WTO for developing economies - the same policy doesn't fit countries in all stages of development.
Because of its uniqueness (both as the largest developing country in history and as a former non-market economy), China is actually subject to additional restrictions under the terms of its accession to the WTO. For example, other countries have increased leeway to place tariffs of Chinese goods, without China having the usual right to retaliate. It's not true that China is a particularly egregious rule-breaker.
I think that fundamentally, these claims of China breaking all the rules and taking advantage of everyone come from a place of fear that China will become the dominant world power - not from an actual understanding of Chinese economic policy.
You want US global allies to enforce an artificial market, which I'm not really against at all. Its just very silly to call that a free market action if China's actions aren't.
Where it doesn't work is when other countries are willing to engage in theft, including intellectual property theft and industrial espionage.
Economic theory is great for determining the direction of economic policy but not defining policy itself.
The fundamental transaction of capitalistic societies is the "deal", where sellers vary the benefits of their products and conceal their deficits and where buyers conceal their willingness to pay as well as the exact thing they want to buy. Typically there are no more than two or three sellers (e.g. Airbus and Boeing) or two or three buyers (e.g. the market for very advanced fighter aircraft).
The first thing you learn in business school is that you must have product differentiation and must at all costs avoid being in a commodity business..