China is currently the second largest U.S. trading  partner, the third largest U.S. export market, and the largest source of  U.S. imports. In setting S&ED priorities, the Department of the  Treasury (Treasury) and the National Security Staff lead an interagency  process, working closely with the Department of Commerce (Commerce),  the Office of the U.S. Trade Representative (USTR), and other agencies,  on trade and investment issues. The prominence of issue areas across the commitments differs between  the dialogues, reflecting differences in the dialogues’ structure and focus. Prominent Issue Areas Include Intellectual Property Rights for JCCT Commitments and Investment for S&ED Trade and Investment Commitments

We identified 184 commitments in the JCCT since 2004 and 114 trade  and investment commitments in the S&ED since 2007 that involve China  or China and the United States. We identified 11  issue areas to characterize the content of each commitment, including  sector-specific issues. Differences in the number of commitments associated with specific issue  areas across the two dialogues may reflect differences in the dialogues’  structure and focus. According to Treasury officials, this  reflects the broad economic focus and cross-cutting discussions of the  S&ED’s economic track. In  addition, U.S. agencies have sought to identify commercial metrics such  as increased sales to use as indicators of implementation progress where  possible, but cited challenges in identifying appropriate data. U.S.  officials serving in China obtain feedback from industry representatives  based in that country. Lack of Comprehensive Information on Implementation of Commitments across Reports Limits Understanding of Progress

USTR includes information in nine reports on trade barriers generally and  efforts to address them, but does not provide comprehensive information  to Congress and the public on the status of implementation of JCCT and  S&ED trade and investment commitments. For example,
We identified 9 commitments from the 2008-2011 JCCT, and 1 from  the 2011 S&ED related to software legalization. Recommendation for Executive Action

To improve policymakers’ and the public’s understanding of progress  through bilateral dialogues in increasing access to China’s markets, we  recommend that the U.S. Trade Representative, in conjunction with the  Secretary of Commerce and the Secretary of the Treasury, work to  provide clearer and more comprehensive reporting on the status of  China’s implementation of its JCCT and S&ED trade and investment  commitments. Neither Commerce nor USTR directly agreed or disagreed with our  recommendation. With respect to U.S. agency reporting on commitment implementation,  USTR stated that in its view the Administration’s written reporting  currently provides congressional policymakers and other stakeholders  comprehensive information on China’s implementation of JCCT and  S&ED commitments, and stated that it also meets with those parties on  these issues. Appendix I: Objectives, Scope, and Methodology

In this report, we (1) describe the commitments China made at the Joint  Commission on Commerce and Trade (JCCT) and the trade and  investment commitments China made at the Strategic and Economic  Dialogue (S&ED), (2) describe U.S. agency tracking of China’s  implementation of these commitments, and (3) evaluate U.S. agency  reporting on the status of commitment implementation. According to senior USTR officials, the  commitments as presented in the fact sheets are high-level political  commitments and are the outcomes of the structured dialogues  established to address and resolve a range of issues. (An inventory of the commitments we identified  and their categorization by issue area, described below, is provided in an  online e-supplement, GAO-14-224SP.)
Why GAO Did This Study

China is the largest destination for U.S. exports outside North America and also the source of the largest U.S. bilateral trade deficit. The countries engage in two high-level dialogues to address trade barriers and cross-cutting economic issues. These are the JCCT, co-led for the United States by Commerce and USTR, and the economic track of the S&ED, led by Treasury. GAO was asked to review China's bilateral trade commitments made in these dialogues. This report (1) describes trade and investment commitments China has made at the JCCT and S&ED; (2) describes U.S. agency tracking of China's implementation of these commitments; and (3) evaluates U.S. agency reporting on implementation. GAO analyzed documents, including public fact sheets stating commitments; interviewed officials, industry representatives, and other experts; used a structured process to categorize commitments; and reviewed reports officials identified as reporting implementation status of commitments.

What GAO Found

GAO identified 298 trade and investment commitments made by China in the U.S.-China Joint Commission on Commerce and Trade (JCCT)—184 since 2004—and the U.S.-China Strategic and Economic Dialogue (S&ED) and its predecessor—114 since 2007. The commitments range from affirmations of open trade principles to sector-specific actions. GAO identified 11 issue areas to characterize the content of each commitment. The prominence of issue areas, measured in number of commitments associated with an issue area, differs between the dialogues, reflecting differences in the dialogues' structure and focus. Intellectual property rights commitments are among those most common in the JCCT and investment commitments are among those most common in the S&ED. (For a detailed inventory of commitments and their categorization, see GAO-14-224SP .)
U.S. agencies track commitment implementation through several means, including outreach to domestic stakeholders, issue-based working groups with China in the JCCT, and consultations in advance of S&ED annual meetings. No single document is used to track implementation, according to U.S. officials. In addition, although there have been calls to use metrics such as exports and sales in developing commitments, agencies identified only one such commitment in the dialogues and cited challenges in identifying appropriate data.
Although several reports on trade barriers present information on JCCT and S&ED commitments, information on commitment implementation in these reports does not provide a clear and comprehensive picture of progress across the dialogues. The Office of the U.S. Trade Representative (USTR) produces these reports with assistance from other agencies, including the Departments of Commerce (Commerce) and Treasury (Treasury). GAO's analysis of 10 software commitments from 2008-2011 shows, for example, that the implementation status of most could not be clearly identified. More comprehensive reporting would give Congress and other policy makers a clearer understanding of progress and the role of the dialogues as they continue to assess challenges in the U.S.-China relationship.

What GAO Recommends

To improve understanding of progress through the bilateral dialogues in increasing access to China's markets, USTR, in conjunction with Commerce and Treasury, should work to improve reporting on China's implementation of JCCT and S&ED trade and investment commitments. In written comments, USTR and Commerce did not directly agree or disagree with the recommendation, but raised several concerns. USTR maintained current reporting is comprehensive and Commerce noted resource constraints. GAO continues to believe improved reporting would benefit policymakers.