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Breakingviews - Trump’s anti-WTO rhetoric hurts America first

"Myths of Globalization: Noam Chomsky and Ha-Joon Chang in Conversation"

Gina Chon

3 Min Read

WASHINGTON (Reuters Breakingviews) - Donald Trump’s rhetoric against the World Trade Organization hurts America first. The U.S. president is no friend to the global trade body, which is hunkering down for its biennial confab. Reforms are needed but America has won most of its complaints, including against China.

[PHOTO:]
U.S. Trade Representative Robert Lighthizer speaks at the 11th World Trade Organization's
ministerial conference in Buenos Aires, Argentina December 11, 2017. REUTERS/Marcos Brindicci

Trump’s trade chief Robert Lighthizer will emphasize national sovereignty over multilateralism at meetings in Buenos Aires this week. His push for WTO reforms and fair trade policies has tamped down expectations for this year’s gathering, when reducing agricultural subsidies is on the agenda. During his presidential campaign, Trump threatened to pull out of the WTO and has repeatedly said the United States has been treated unfairly.

Yet America, the most frequent WTO complainant, has won more than 90 percent of the cases it has brought over the last 20 years. China has been a frequent target. In 2015, China eliminated quotas for rare earths used in mobile phones after the WTO declared the system violated trade policies. The United States followed up with a complaint against Chinese quotas on raw materials used in the steel and auto industries.

The Trump administration is also undermining the WTO’s dispute-settlement system by blocking the appointment of new judges for its seven-member appellate body. With another judge’s term ending this month, the panel will go down to four members, with three of them needed to decide cases. That could slow down U.S. cases, such as a complaint on Chinese quotas on wheat, rice and corn advocated by American farmers.

Lighthizer has a point in calling for the WTO to change. The unwieldy body has not been able to update global trade rules since the mid-1990s. America has also lost 90 percent of cases when it’s a complaint defendant, but that’s because it often doesn’t adhere to rulings, spurring multiple decisions on the same issue. In one case, the United States declined to address cotton subsidies for 10 years after a 2004 WTO ruling.

China’s WTO membership also hasn’t stopped it from dumping steel and other products. But Beijing tends to adhere to WTO rulings, making it at least somewhat effective in curbing unfair trade practices. Trump’s weakening of the body has consequences for U.S. business, too.

https://in.reuters.com/article/us-trade-wto-breakingviews/breakingviews-trumps-anti-wto-rhetoric-hurts-america-first-idINKBN1E52FE