China is likely to surpass Japan to become the single largest source of the U.S. trade deficit.
This approach runs the risk that China, the world s tenth-largest producer of export goods and the largest trading country in the world not already subject to the disciplines of the established international trading system, will elect to remain outside the WTO indefinitely. Such an outcome would be undesirable for the future of the world trading system, China s economic evolution, and the U.S.-China relationship. China s membership in the WTO will serve U.S. interests by providing a mechanism for dealing with inevitable trade frictions on a multilateral rather than a purely bilateral basis. It would also allow the United States to concentrate in the bilateral diplomatic channel on critical strategic issues. In exchange the United States should expect China to agree to a schedule that would gradually bring the country into compliance with WTO standards.