Will the US withdraw from the WTO?

With the elections closer and closer, President Trump will want to keep the stock market stable and avoid a potentially riotous move like the announcement of his withdrawal from the WTO.

Ms. CLAIRE READE (former assistant US trade representative in charge of trade policy with China)

The ruling published on September 15 pointed to many “inconsistent” with global trade principles when the US imposed additional tariffs on more than $ 200 billion of Chinese goods in 2018, sparking a tariff war. costly.

Beijing is reserved

A panel of three trade experts, set up by the WTO’s Dispute Settlement Agency, also agreed with Beijing’s view that the Trump administration’s tax action was inconsistent with the principle of non-discrimination between countries have equal conditions. The evidence is that Chinese goods are taxed higher than similar goods of other countries when imported into the US.

The Chinese government’s Global Times on September 16 called the decision “a great victory”, saying it was “a stern reminder to the US” of globalization and multilateralism. Meanwhile, the Ministry of Commerce of China, meanwhile, responded cautiously when declaring respect for the decision and calling on the US to fulfill its WTO obligations.

The Chinese Ministry of Commerce’s reservations suggests Beijing is aware that the ruling will likely make no difference in the ongoing trade war between the two countries. Because the Trump administration has undermined the WTO Appeals Office (AB), it will not be able to impose any sanctions even if the US continues to keep the current tariffs on China. .

Washington has the right to challenge the WTO ruling by filing an appeal at any time within the next 60 days. If the United States really did, the incident would fall into a stalemate, neither could go forward nor backward, but it was in Washington’s favor.

According to WTO rules, all appeals in disputes between WTO members will be handled by AB. However, the United States has repeatedly prevented the appointment of judges in the agency since 2017.

The appointment of members of AB is conducted on the principle of consensus, which means that if only one country objects, the appointment will fail. This leaves AB with only one member left at the moment, while it takes a minimum of 3 people to resolve a case. Without a member, AB will not be able to rule in any dispute when there is an appeal.

Withdraw or reform the WTO?

US Trade Representative Robert Lighthizer has criticized the WTO, emphasizing that because the WTO cannot change China’s “non-general law” trade policies that cause damage to the US, Washington has the right to self-control. act.

“Although the council does not object to the additional evidence that the US has submitted about China’s theft of intellectual property, the WTO ruling shows that the organization does not provide a remedy for such practices. that is, “- Mr. Lighthizer pointed out.

Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics, dislikes the way Trump presses China with tariffs because it affects Americans. But he agrees with Mr. Lighthizer about the backwardness of the WTO. “WTO rules are not enough to address China’s distortions in trade and investment”, Mr. Schott commented to CNN.

Margaret Cekuta, a former official at the Office of the US Trade Representative, said that the latest WTO ruling will either promote President Trump’s decision to leave the WTO, or reinforce the US argument that it is time to reform. this organization.

“The US will have grounds to say that the WTO is outdated. The WTO will be questioned that if this organization cannot make a ruling on intellectual property rights, where can they be in the broader economy in the future?” – Grandma Margaret said.

Republican Senator Josh Hawley said that the WTO ruling was proof that this trading organization was outdated, at the same time, had bad effects on the US in general. He urged the Trump administration to withdraw the US from the WTO.

China thanks to WTO for help from April 2018?

According to the Los Angeles Times, the Trump administration believes that the tariffs will force China to sit at the negotiating table, end acts of stealing intellectual property and technology, and a trade agreement with a closely watched mechanism.

The US newspaper said China was forced to sit at the real table, but while the negotiations were still ongoing, Beijing sought help from the WTO in April 2018, leading to a 15- 9.

Mr. Trump said Trump said ‘ignorant of WTO ruling’

US President Donald Trump on September 15 said he was not aware of the World Trade Organization’s (WTO) ruling regarding Washington’s imposition of additional tariffs on Beijing goods, said he would consider the judgment. this.

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