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KT edit: World needs the WTO

Filed on September 17, 2020

The Trump administration is no fan of the trade body, and believes in taking unilateral decisions to keep American interests 'first'

The recent ruling by the World Trade Organization (WTO) suggests the tariffs imposed by the United States on Chinese goods in 2018 were inconsistent with the international trade rules. This observation is unlikely to make any difference to the ongoing trade war between the world's two largest economies. Even as the verdict vindicates China it points at the ineffectiveness of the world body in being an arbiter of the trading system. By the same token the US is unlikely to give the ruling the attention it deserves. It can afford not to do so. It had not even challenged the claims made by China in the first place, which is why the WTO investigated the US tariffs and not the reciprocal action taken by China. Moreover, it is the appeals court that issues the final rulings in trade cases and had the US not used its veto last year to block the appointment of the judges, it could have appealed against the latest decision. So, it will simply sidestep it. The Trump administration is no fan of the trade body, and believes in taking unilateral decisions to keep American interests 'first'. This is almost a given. 

The US veto has been paralysing the dispute system. But to think that the world can do without a trade body to prevent trade protectionism would also be wrong. Open trade has helped countries globally flourish. Reforming the multilateral trade system would be the best way to address trade issues. Nationalist leaders who have been using trade policy as a tool of domestic politics, levying quotas and tariffs on countries as punitive measures, must be discouraged and that can happen only through a world body such as the WTO. Leaders of the US, China, India, Japan, for instance, have used such tactics. A new global trade regime should be logically constructed by reforming and modernising the WTO. 

 



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