How the US obstructs the World Trade Organisation | DW News
WTO loses its role of global arbiter because of the USA
The disruption of the global economic order in the US is becoming a major topic as the World Trade Organization (WTO) loses its ability to intervene in trade wars, threatening the future of the Geneva regulator.
Two years after the start of the blocking of appointments, the United States paralyzes the WTO’s appellate body, which acts as the supreme court for international trade, as two out of three members leave its membership and are left unable to rule.
Major trade disputes, including the US-China conflict and duties on metals imposed by US President Donald Trump, will not be resolved by the world trade arbiter.
Stephen Vaughn, who served as General Counsel to the U.S. Trade Representative during the first two years of Trump’s presidency, said many disputes will be resolved in the future through negotiations..
Critics say this means a return to the post-war period of inconsistent agreements, a problem that was supposed to be solved by the creation of the WTO in 1995..
On Monday, the EU ambassador to the WTO told his colleagues in Geneva that the paralysis of the appellate body could create a system of economic relations based on power, not rules..
The deterioration of dispute resolution comes at a time when the WTO is struggling for another important role in opening markets..
WTO Club 164 has not reached an international agreement since it ended the Doha Round negotiations in 2015.
Trade restrictive measures among the group of largest G20 countries hit all-time highs, exacerbated by Trump’s agenda «America first» and the trade war with China.
Phil Hogan, the new European Union Trade Commissioner, said on Friday that the WTO is no longer tackling the challenges and is in dire need of reforms that go beyond simply establishing an appeals mechanism..
In particular, for developed countries, the WTO rules should change taking into account the enterprises controlled by the state..
In 2017, Japan united the United States and the European Union in a joint effort to establish new global rules on government subsidies and forced technology transfer..
The US also insists on limiting the ability of WTO members to grant themselves developing status, which, for example, gives them more time to implement WTO agreements..
To such «developing countries» includes Singapore and Israel, but China is in the spotlight.
US Commerce Secretary Wilbur Ross told Reuters last week that the United States wants to end the concessions it made to the stalled economy..
«We have spoiled countries for a very, very long time, so naturally they resist when we try to change something.», – he said.
The problem with reforming the WTO is that changes require consensus. This should include support from China..
Beijing has published its own reform proposals with a number of complaints about US action. Reform should address critical issues that threaten the existence of the WTO, while preserving the interests of developing countries.
Many observers believe the WTO faced a turning point in mid-2020 when its trade ministers gathered to negotiate a cut in fishing subsidies..
«It is not the WTO that will save the fish. This fish will save the WTO», – said one of the ambassadors.