Trump government declares US is not bound by WTO rulings

US President Donald Trump speaking during a lunch with House and Senate leadership in the Roosevelt Room of the White House in Washington, DC, on March 1, 2017.
US President Donald Trump speaking during a lunch with House and Senate leadership in the Roosevelt Room of the White House in Washington, DC, on March 1, 2017.PHOTO: AFP

Decision may threaten viability of its dispute settlement body; WTO chief extends olive branch

GENEVA • The World Trade Organisation (WTO) has become the target of a concrete attack launched by US President Donald Trump's administration when Washington declared it was not bound by the body's rulings.

The US decision is a clear break from precedent and could threaten the viability of the WTO's dispute settlement body, where major trade conflicts have been adjudicated.

A letter sent from the US Trade Representative to Congress on Wednesday, outlining Mr Trump's policy, reviewed the terms under which the US joined the WTO when it was founded in 1995.

According to the Trump government's interpretation, "Congress had made clear that Americans are not directly subject to WTO rulings", said the document.

The text - entitled The President's 2017 Trade Policy Agenda - also says Mr Trump's government "will aggressively defend American sovereignty over matters of trade policy".

In another rebuke to the 164-member WTO, which aims to forge deals applicable to its whole membership, the US said it believed American trade goals "can be best accomplished by focusing on bilateral negotiations rather than multilateral negotiations".

Overall, the document reads like the trade version of Mr Trump's "America First" foreign policy doctrine and follows the President's call for companies to "Buy American and hire American".

In another rebuke to the 164-member WTO, which aims to forge deals applicable to its whole membership, the US said it believed American trade goals "can be best accomplished by focusing on bilateral negotiations rather than multilateral negotiations".

WTO director-general Roberto Azevedo responded with an olive branch yesterday, noting it was "clear that the United States has a variety of trade concerns, including about the WTO dispute settlement system".

"I am ready to sit down and discuss these concerns and any others with the trade team in the US whenever they are ready to do so."

China, seeking to position itself as a defender of the international trade system in response to a rising tide of American protectionist sentiment, said yesterday that it will continue to support the "open and unbiased" WTO.

"China would like to work with all WTO members to ensure that the WTO can play an important role in global trade," Foreign Ministry spokesman Geng Shuang told reporters in response to a question about the Trump policy letter.

Mr Azevedo has sought to downplay the threat posed by the US President, who called the WTO "a disaster" during his campaign.

The organisation's dispute settlement mechanism has been criticised by several camps over delays and backlogs.

But, since 1995, it has heard more than 500 disputes on issues such as subsidies, customs and tariffs and made more than 350 rulings. The WTO cannot punish countries that do not abide by its rulings, but can authorise retaliatory measures.

For Professor Sebastian Dullien, a fellow at the European Council on Foreign Relations, the dispute settlement body has been an important venue for non-super powers to have grievances addressed.

"Contrary to what Donald Trump is saying, it is not just other countries screwing the US, but sometimes it's the United States screwing other countries," he said, noting that if the WTO is marginalised, smaller but still significant economies could suffer.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on March 03, 2017, with the headline 'Trump govt declares US is not bound by WTO rulings'. Print Edition | Subscribe