China should set up its own chamber of commerce in America: marketing master

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Last updated at: (Beijing Time) Tuesday, October 28, 2003

China should set up its own chamber of commerce in America: marketing master

Tariff, dumping, IPR, quota, sanction, new quality examination standards...does China have only one way-out -- lodge a transnational lawsuit --- when confronted with trade disputes and troubles in pushing its products overseas? The answer by Mr. Milton Kotler, world marketing strategy master and professor of the Northwestern University, is "No".

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Tariff, dumping, IPR, quota, sanction, new quality examination standards...does China have only one way-out -- lodge a transnational lawsuit -- when confronted with trade disputes and troubles in pushing its products overseas? The answer by Mr. Milton Kotler, world marketing strategy master and professor of the Northwestern University, is "No".

"Made in China" under pressure from American enterprises

It is an appropriate moment to discuss the question of "Made in China" which, when having benefited tens of millions of American consumers, was also labeled with unfair charges. Some products are undergoing the unfair treatment of anti-dumping lawsuits. An apt example is the announcement from the six biggest US textile industry guilds during the last half of this year that began to canvass the parliament members to restrict imports from China. Facing the trade rows springing up one after another, US Commerce Secretary Don Evans kicked off a five-day visit to China on October 27 to discuss bilateral trade problems with the Chinese side.

While Mr. Milton Kotler, who has been friendly to China, said in a speech on Sino-US trade ties in Beijing that China needs a mouthpiece in the United States, and the establishment of a chamber of commerce is the best choice.

Anti-dumping lawsuit becomes a political ping-pang match

Kotler raised a simple example to describe the features of current trade rows between the United States and China. Now China's several major color TV manufactures are waiting for the ruling of an anti-dumping case lodged by FREI, a small electronics company. Yet in today's United States there doesn't exist a TV manufacturing industry. The small company's charge may result in an added 84 percent tariff on TV imports from China. This is by no means an anti-dumping lawsuit, but a political ping-pang match between fair trade and Washington's governmental protectionism, he said.

Then let's turn to the 329 percent tariff rate imposed on saccharin imported from China. PMC is an American company, as well as the only saccharin producer in the Western hemisphere. Unwilling to see competition from China, the company managed to secure the authorization of monopoly from the US International Trade Commission.

Sino-US trade disputes fattening US lawyers up

The rise of every trade dispute between China and the United States means a fortune for law firms scattering along Washington streets, said Kotler, since in Washington no one would stand out and speak for Chinese enterprises. So the latter could only turn to American lawyers for every tiny trouble in trade rows, such as tariff, dumping, IPR and sanction, whose charges vary from 5,000 to 1 million dollars each time.

So we can say Chinese enterprises have fattened up lawyers in Washington, and helped them gain profits from the development of China-US trade, said Kotler. Currently, whenever Chinese companies meet with trade problems in the United States, usually spend a fortune in hiring a strange lawyer to lodge a suit, with they themselves shuttling between the two countries for an isolated question. Chinese firms are finally exhausted by all these efforts and more often than not no good results are achieved.

China should set up its own chamber of commerce in the US

World top business leaders, such as Oracle CEO Larry Ellison, Microsoft President Bill Gates and Boeing Chairman and CEO Philip Condit all pay visits to Beijing now and then, and have established a deep friendship with Chinese government officials and business leaders. For many years, the American chamber of commerce in Washington and Beijing paved the way for them, Kotler pointed out. When will Chinese business leaders hold similar talks with the political and business communities of the United States?

Who will represent Chinese enterprises in Washington and convey the US message to China? Kotler told reporter that Japan has its chamber of commerce in Washington, so does Europe. Besides, gathered in the United States also chambers of Argentina, Germany and many other countries but China has no semi-official chamber organization neither in Washington State nor Maryland, nor any national chamber is established.

The trade problems, which cost several million dollars in lawyers' fee this year, can actually be put to chamber of commerce first, and be solved by mutual understanding. China should build a grand chamber in Washington, which works for the interests of Chinese enterprises and strives for the promotion of high-level business and political talks and relations between the two sides. To have a "second way out" for solving China-US trade rows, Chinese enterprises should appear in the United States in a collective capacity and form chambers of commerce to represent their interests as Kotler hopes.

Taking the TV anti-dumping case for example, China needs a chamber forum to refute those false charges to take the place of paying a world to lawyers. So does the saccharin case, an active mediating commerce chamber may serve as a comparatively fair policy platform.

Establishment of a commerce chamber can help reduce arbitration costs

Why sets up chamber of commerce in the United States? Kotler explains that with the development of trade, Chinese enterprises may encounter more questions, whose low-cost advantages, for example, are being threatened by third-world rivals. The unstable economic situation of the United States has made the country more sensitive to imported goods to such a level which surpassed that in the decade of booming period in the past.

Besides, due to lack of adequate framework to balance economic relations, the flaws in system lead to high cost but low efficiency in solving problems. For example, government business talks are originally a basic mechanism for setting up business policies and solve disputes, but governments cannot fully play the rule. When agreements are disputed and doubted, the arbitration and resolution cost is so big that it holds back the normal business expansion and investment of enterprises. Kotler points out that wider participation of non-governmental business groups in the definition of industrial economic interests, as well as their full support, may reduce the costs of arbitration.

By PD Online staff member Li Heng

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