President threatens to pull US out of WTO

WASHINGTON • President Donald Trump said he would pull out of the World Trade Organisation (WTO) if it does not treat the United States better.

"If they don't shape up, I would withdraw from the WTO," he said on Thursday in an Oval Office interview with Bloomberg News.

He said the agreement establishing the body was the single worst trade deal ever made.

A US withdrawal from the WTO would potentially be far more significant for the global economy than even Mr Trump's growing trade war with China, undermining the post-World War II system that the US helped build.

Mr Trump said in July that the US is at a big disadvantage from being treated "very badly" by the WTO for many years, and that the Geneva-based body needs to change its ways.

US Trade Representative Robert Lighthizer has said that allowing China into the WTO in 2001 was a mistake. He has long called for the US to take a more aggressive approach to the WTO, arguing that it was incapable of dealing with a non-market economy such as China.

Mr Lighthizer has accused the WTO dispute-settlement system of interfering with US sovereignty, particularly in anti-dumping cases.

The US has been blocking the appointment of judges to the WTO's appeals body, raising the possibility that it could cease to function in the coming years.

During the interview, Mr Trump said the US rarely won a lawsuit except for last year at the WTO.

"In the last year, we are starting to win a lot," he added. "You know why? Because they know if we don't, I am out of there."

For all of his complaints about the WTO, Mr Trump's administration has continued to file cases against other members.

Earlier this week, it launched a case against Russian duties on US products that it argues are illegal.

Countries that bring complaints to the WTO tend to prevail and defendants in trade disputes lose.

But WTO data also shows that the US does slightly better than the WTO average in both the cases it brings and that are brought against it, said Mr Simon Lester, a trade analyst at the Cato Institute, a Washington policy group that favours more open international trade.

Of the 54 cases brought by the US over the life of the WTO, Washington won at least one finding in its favour in 49, or 91 per cent, Mr Lester said.

Of the 80 cases brought against it, a WTO panel ruled against it in at least one aspect in 69 cases, or 86 per cent of the time.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on September 01, 2018, with the headline 'President threatens to pull US out of WTO'. Print Edition | Subscribe