The Jan. 2 front-page article “Major hole in initial U.S.-China trade deal” documented the failure of “phase one” to tackle China’s enormous subsidies to industry. But there is a glimmer of light in this gloomy landscape. Recent developments in regional trade agreements and joint reform efforts of the United States, the European Union and Japan suggest a changing trade policy environment on subsidies. This has not escaped China’s notice, and it may be willing to consider first steps to “phase in” changes to subsidy rules.

All World Trade Organization members, including China, must “notify” the WTO when they create subsidy programs. China often fails to do so to avoid WTO challenges by other countries. Thus, steps to stiffen the penalty for nondisclosure would open the door to vital international scrutiny.

Japan and the European Union share U.S. concerns and are working jointly to strengthen WTO penalties for nondisclosure, such as an automatic finding of “injury” to Western firms. This would allow more immediate tariff retaliation for rules violations. This group also seeks to prohibit the most egregious subsidies that enlarge capacity beyond commercial demand and sustain failing companies.

China can see the handwriting on the wall. It would consider carefully a U.S. proposal to phase in enhanced transparency and subsidy limitations in the coming months.

The United States should seize the opportunity for important steps now and leave larger ambitions for another day.

Sherm Katz, Washington

The writer is a senior fellow at the Center for the Study of the Presidency and Congress.