The rules-based structure which has served the world for more than half a century is under more serious attack from the nation that reaped the greatest benefit. New US President Donald Trump, whose nation is 5% of humanity but controls 26% of global economic activity, is on a mission to rewrite rules he believes no longer serve his country. In the crosshairs right now is the Geneva-headquartered World Trade Organisation which is responsible for resolving disputes to ensure there is a level paying field in trade between 164 member nations. This week Trump’s new administration served notice it will no longer abide by WTO decisions. And on Tuesday night the colourful property mogul upped the ante by blaming the WTO for American job losses, telling Congress: “We’ve lost 60,000 factories since China joined the World Trade Organisation in 2001.” Nobody wins in war. And as the 1930 Depression taught the world, even less so when trade becomes the battlefield. But right now those running the world’s biggest economy are only referring to the history that suits their narrow agenda. They are too self-absorbed to care about unintended consequences of their actions on their country, and the world. Fasten your seat belts. – Alec Hogg
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(Bloomberg) – The U.S. isn’t bound by decisions made at the World Trade Organisation, President Donald Trump’s administration said in outlining a new trade agenda that promises to root out unfair practices by foreign countries.
America plans to defend its “national sovereignty over trade policy,” the Office of the U.S. Trade Representative said in an annual document laying out the president’s trade agenda. Under the terms of its entry into the WTO, the U.S. didn’t abandon its trade rights, according to the document, obtained by Bloomberg News and titled “2017 Trade Policy Agenda.”
“Given this history, it is important to recall also that Congress had made clear that Americans are not directly subject to WTO decisions,” according to the trade office, which takes the lead in negotiating trade deals. Trump’s pick to lead the USTR, lawyer Robert Lighthizer, hasn’t yet been confirmed.
The Trump administration’s skepticism toward the WTO, the Geneva-based body that referees trade disputes, signals a new willingness by the world’s biggest economy to pursue its interests — even if it means undermining the global order the U.S. has led since World War II.
“It reflects their belief that the global system isn’t serving U.S. interests and they’re going to do all they can to rewrite in favour of U.S. interests,” said Adam Taylor, a former senior Canadian trade official based in Ottawa. “The biggest worry is that you can’t have the rules that govern the global trading system being ignored by one party and expect the system to keep functioning.”
Reports that #Trump looking 4 ways 2 bypass WTO dispute system more evidence of new trade unilateralism. Limbering up 4 trade spat w #China
— Robert Ward (@RobertAlanWard) February 27, 2017
Expand Trade
The overarching purpose of the administration’s trade policy will be to “expand trade in a way that is freer and fairer for all Americans,” according to the report. “Every action we take with respect to trade will be designed to increase our economic growth, promote job creation in the United States, promote reciprocity with our trading partners, strengthen our manufacturing base and our ability to defend ourselves, and expand our agricultural and services industry exports,” it said.
These goals can be better met by focusing on bilateral negotiations than multilateral deals, the government said. Trump has withdrawn the U.S. from the Trans-Pacific Partnership, an agreement with 11 other nations. He has also said the U.S. plans to renegotiate the North American Free Trade Agreement with Mexico and Canada and level the playing field with China.
The U.S. will work to break down unfair trade barriers in markets that block U.S. exports, while strictly enforcing U.S. trade laws to prevent the U.S. market from being “distorted by dumped and/or subsidised imports that harm domestic industries and workers,” the USTR report said. The U.S. will update existing trade deals as necessary to “reflect changing times and market conditions.”
The contents of the document were reported earlier by the Financial Times and Wall Street Journal.
The Trump administration will also resist efforts by other countries, or international bodies such as the WTO, to “advance interpretations that would weaken the rights and benefits” of the U.S. under its trade agreements, the government said.
