The U.S. of A. at the W.T.O.: Reform Is Needed

By Matthew McMullan
Dec 11 2017 |
Trade
Wikimedia Commons

A lot of the dispute comes down to how the organization treats China.

The World Trade Organization (WTO) is holding a ministerial meeting in Buenos Aires, Argentina today. The remarks from one of those ministers have been anxiously anticipated.  

Here was a curtain-raising profile, published Sunday in the Financial Times, of U.S. Trade Representative Robert Lighthizer:

Though he is a life-long Republican and served as the treasurer for mentor Bob Dole’s 1996 presidential campaign Mr Lighthizer has long been at odds with the party’s pro-trade mainstream. As a top lawyer for the US steel industry he also developed strong relationships with fellow trade skeptics in the Democratic party and at labour unions. 

“He’s true to his principles,” says Thea Lee, incoming president of the left-leaning Economic Policy Institute. “He does care about the US trade deficit and he cares about jobs on American soil. A lot of business interests don’t care about either one of those things.” 

Lighthizer is considered a trade hawk within the Trump administration, whose personal views on this issue hew closely to the president’s — skeptical, in a word.

If that’s what was expected of Lighthizer when he addressed the WTO gathering today, then the trade ambassador didn’t disappoint.

It has been observed that this criticism is part and parcel of a telegraphed Trump administration strategy to pull back U.S. leadership from institutions of which it’s skeptical. That’s a departure from the tack of the Obama administration, which had beef with the WTO but remained willing to work within the system.  

From another FT article:

Administration officials argue the WTO has failed in its mandate to negotiate new rules for the global economy and locked the US into mismatched tariffs. Its current procedures were never designed to cope with the brand of state capitalism that China has ridden to success for three decades, they say.

And that – our skewed trading relationship with China – is really what this is all about. Today is the one-year anniversary of China’s 15th year as a WTO member, which is when it expected to be treated like a market economy in disputes with its trading partners.

China is clearly not a market economy, and it shouldn’t be granted the benefit of being treated like one.

AAM isn’t advocating for the dismantling of the WTO. But it certainly needs reform, and we approve of the Trump administration’s unilateral moves to take on unfair Chinese trade. Said AAM President Scott Paul:

"The White House has voiced valid criticism of the WTO and should continue fighting for a fair dispute system. Concurrently, the administration should follow-through on open Section 232 steel and aluminum imports. American jobs are at stake, and workers deserve action now."