Trump trade policy pulls away from WTO

The Trump administration on Wednesday said it may ignore decisions by the World Trade Organization that it views as threatening to U.S. sovereignty, according to a new report.

The White House’s aggressive new policy is aimed at broadening the ability of the U.S. to unilaterally punish countries they argue are violating international trade laws, according to the 2017 trade agenda sent to Congress by the Office of the U.S. Trade Representative.

The report says that the U.S. will resist “efforts by other countries — or international bodies like the World Trade Organization — to weaken the right and benefits of, or increase the obligations under, the various trade agreements to which the United States is a party.”

{mosads}If a WTO dispute settlement report “is adverse to the United States,” the USTR can consult with Congress to determine whether to implement a recommendation “confirming that these WTO reports are not binding or self-executing.”

“Even if a WTO dispute settlement panel — or the WTO Appellate Body — rules against the United States, such a ruling does not automatically lead to a change in U.S. law or practice,” the report said. 

“Consistent with these important protections and applicable U.S. law, the Trump administration will aggressively defend American sovereignty over matters of trade policy.”

Republican and Democratic lawmakers defended the trade body and highlighted its importance in ensuring the United States gets a fair shake in the global trading world. 

House Ways and Means Committee Chairman Kevin Brady (R-Texas) said, “I strongly believe that our current trade agreement, including the WTO, have been successful for Americans because these agreements establish a firm rule of law to hold our competitors in check and open markets for us to sell our goods, services and farm products.”

“They have also made a broad array of products available to American families at affordable prices. And when other countries don’t follow the rules, our agreements give us powerful tools through a dispute settlement process to retaliate against them,” Brady said.

Ways and Means Committee ranking member Richard Neal (D-Mass.) said he is concerned that the administration is going too far.

“The administration is right to criticize the WTO international dispute settlement process, but when it says it will ‘aggressively defend American sovereignty over matters of trade policy,’ it sounds like the administration is considering a far too drastic response,” he said.

“We need to fix the problems with the current international trading system, not scrap the system altogether.”

During a press briefing on Wednesday, White House press secretary Sean Spicer said the administration has “some concerns with the percentage of dispute resolutions that are brought to the WTO versus other nations.”

When asked if the White House would ignore WTO rulings, Spicer answered “no, no, no.”

The move would represent a sharp break from decades of U.S. trade policy and could cause a backlash around the globe, leading to trading partners levying higher tariffs on American exports. 

During his campaign, President Trump was critical of the WTO, saying that the global body had let China become an unchecked dominant economy and that Beijing’s failure to play by the rules had led to millions of American job losses. The U.S. joined the group in 1995. 

The document, which the White House is required to send to Congress on March 1, lists key objectives that include defending “national sovereignty over trade policy,” boosting enforcement of U.S. trade laws, using “all possible sources of leverage to encourage other countries to open up their markets” and negotiating new and better trade deals with countries in key markets around the world.

“The overarching purpose of our trade policy — the guiding principle behind all of our actions in this key area — will be to expand trade in a way that is freer and fairer for all Americans,” the report said. 

“Every action we take with respect to trade will be designed to increase our economic growth, promote job creation in the United States, promote reciprocity with our trading partners, strengthen our manufacturing base and our ability to defend ourselves, and expand our agricultural and services industry exports.”

To that end, the administration further emphasized their preference for bilateral trade deals over multi-country negotiations. 

“As a general matter, we believe that these goals can be best accomplished by focusing on bilateral negotiations rather than multilateral negotiations, and by renegotiating and revising trade agreements when our goals are not being met,” the report said. 

Trump withdrew the U.S. from the 12-nation Trans-Pacific Partnership deal. He also said he wants to renegotiate the North American Free Trade Agreement with Mexico and Canada.

The U.S. will update existing trade deals as necessary to “reflect changing times and market conditions,” the report said. 

Senate Finance Committee ranking member Ron Wyden (D-Ore.) scolded the USTR for failing to provide any new details on what deals the administration intends to pursue.

“While many of the president’s stated objectives are laudable, it is troubling that the President’s Trade Agenda still leaves the American people in the dark about the actions he intends to take on trade,” Wyden said.

“The election was nearly four months ago, and there remains little substance behind the promises the president made to American workers and American families throughout and after the campaign,” he said.

The report notes that a more comprehensive agenda will be sent to Congress after Robert Lighthizer, who has been nominated to head the USTR, is confirmed by the Senate.