Trump Is Quietly Trying To Vandalize WTO | Global Trade Magazine
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  December 6th, 2017 | Written by

Trump Is Quietly Trying To Vandalize WTO

President Thinks Organization’s Purpose is to Beat Up on the US

Sharelines

  • Trump: The US has trade deficits with Mexico, Germany, and China, so they must be cheating us.
  • Trump: “The World Trade Organization was set up for the benefit of everybody but us.”
  • The US has won the majority of dispute settlement cases it has filed with the WTO.

President Trump complains that the United States is being bullied and pushed around by the likes of Mexico, Germany, and China. The US has trade deficits with those countries, he reasons, so they must be cheating us.

He holds a similar view of the World Trade Organization. He thinks its raison d’etre is to beat up on the United States, even though the United States played a central role in creating the WTO and writing its rules.

“The World Trade Organization was set up for the benefit of everybody but us,” Trump said in an interview with his biggest fan, Lou Dobbs of the Fox Business channel. “They have taken advantage of this country like you wouldn’t believe.”

His main gripe is that “we lose the lawsuits, almost all of the lawsuits in the WTO.” That’s not even close to being true. The United States has won the majority of the dispute settlement cases (they’re not lawsuits) it has filed with the WTO since its formation in 1994 and lost the majority of those that have been filed against it. Such is the case with most or all of the WTO’s 164 members. The plaintiff almost always wins.

Moreover, the United States as a plaintiff has a higher winning percentage – about 70 percent – than any other country, according to an analysis by the European University Institute. As a respondent, the United States has won about 42 percent of its cases. That, too, is a higher percentage than any other country.

Undaunted by facts, the Trump administration has blocked the nominations of jurists to fill vacant seats in the WTO’s Appellate Body. This is no small thing. The Dispute Settlement Body, and the Appellate Body, are where governments go when they think their trading partners are violating WTO rules. This is a hugely important part of what the WTO does. There are two vacant seats on the seven-member Appellate Body, and after Dec. 11, there will be three.

There is already a big backlog of cases waiting to be heard, and the administration’s recalcitrance will make it bigger. Its reasoning is that some Appellate Body judges continue to serve after their terms of office have expired, so replacements shouldn’t be considered until after they’ve left.

“In the US view, we cannot be considering launching a selection process to fill a vacancy if the person to be replaced continues to serve and decide appeals,” the Trump administration said at a meeting of the Dispute Settlement Body on Sept. 29.

This is a thinly veiled ruse intended to vandalize the dispute settlement system. If a federal judge were to announce that she planned to retire in six months, the White House would not wait until she had left the bench to start considering potential replacements. WTO rules allow judges to finish the cases they’re working on when their terms expire. No previous administration has taken the position the current one is taking.

Steve Charnovitz, a trade law professor at George Washington University, has proposed a solution: The Appellate Body should say that “in the event of three or more expired terms in the Appellate Body membership, the Appellate Body will be unable to accept any new appeals.”

This could, among other things, prevent the United States from appealing a DSB ruling that goes against it. The US has dozens of cases pending in the DSB.

Trump apparently thinks the WTO is a gang that’s out to get the poor little United States. If that were true, you’d have to conclude that it is, to paraphrase Jimmy Breslin, a gang that can’t shoot straight.

John Brinkley was speechwriter for former US Trade Representative Michael Froman and for Korean Ambasador Han Duk-soo during the Korean government’s quest for ratification of the Korea-US Free Trade Agreement. This article first appeared in Forbes.


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