Opinions
2019.07.18 21:45 GMT+8

The WTO is not power-based as the U.S. hopes

Updated 2019.07.18 21:45 GMT+8
Zhao Yuanzhen

Editor's note: Zhao Yuanzhen is an opinion editor with CGTN Digital. The article reflects the author's opinions, and not necessarily the views of CGTN.

This story goes back to 2012.

China opened a case in the World Trade Organization (WTO) to challenge the anti-subsidies tariffs the U.S. launched against certain products from China, including steel tire rims, solar panels, wind power equipment and aluminum goods. In 2014, the WTO ruled that the U.S. measures did not fully comply with WTO rules. But the U.S. refused to accept ruling and remove the tariffs. In 2018 the U.S. appealed again, the Appellate Body issued a report on Tuesday this week that the U.S. has failed to comply with the ruling.

It seems that this should be the end of the story, except the U.S. has blasted the WTO decision again, stating that the report "undermines WTO rules, making them less effective to counteract Chinese SOE subsidies that are harming U.S. workers and businesses and distorting markets worldwide. "

This was not the first time that America openly showed its disrespect and disappointment to the WTO. Last year, U.S. President Donald Trump even threatened to withdraw from the WTO, the only organization that deals with trade rules between nations. Does the U.S. have the right to criticize its performance? Rightfully yes. But the most important question is: On what criterion?

The WTO was created to promote world free trade and create level playing field for member countries rather than to protect U.S. interests specifically. To use "America's interest" as the ruler to measure WTO's decisions fundamentally undermines the role of the WTO and other countries' rights.

White House spokeswoman Sarah Sanders speaks during a press briefing about Trump administration's allowing the U.S. to abandon the basic principles of the WTO and giving the U.S. President greater discretion at the White House in Washington, U.S., July 2, 2018. /VCG Photo

"U.S. actions are seriously undermining the rules-based trade system," said Cheng Dawei, a professor at the School of Economics at China's Renmin University, "this case has further proved its disrespect for the rules system."

In the 2019 Trade Policy Agenda and 2018 Annual Report issued by the USTR, the U.S. accused the WTO of impinging on its national sovereignty. It has specifically emphasized its dissatisfaction against the WTO's Dispute Settlement Body (DSB), claiming the "judicial activism" of WTO Appellate Body has led to a "lack of trust" in its decisions. It is also blocking the new appointment of the judges of the Appellate Body, causing a looming crisis of a paralyzed "court of the world trade."

Ironically though, the U.S. is the most frequent user of the dispute settlement mechanism, it has filed more cases than the European Union (EU) and China combined. The overall winning rate of the U.S. is also higher than other entities. In the meantime it has enjoyed a special privilege that the seven judges has to include one from America.

This has shown the bare hypocrisy of the U.S. administration that their views of a successful WTO is not to bring trade benefits for all but to keep up with what the U.S. conceives the best for its own interests.

Former U.S. secretary of commerce Carlos Miguel Gutierrez attends the 2019 Boao Asia sub-forum with the theme of WTO reform in Hainan, China, March 27, 2019. /VCG Photo

In the meantime, however, the need for WTO reform is urgent, perhaps not in America's way though. "There are indeed some loopholes in the current system", Cheng pointed out, "some are due to the lack of precision in the definition at the beginning; some rules are also in need of updates to accommodate new changes in the world trade system."

China, the EU and India have all submitted proposals regarding reforms of the WTO, calling a more inclusive and efficient WTO which could play a bigger role in the current global trade crisis. But it is necessary to admit the precondition that at the heart of WTO is the value to sort out trade problems through negotiations and consultations. Unless the U.S. gives up the idea that global trade is a zero-sum game, no amount of reform could win America's trust as its America First philosophy is rooted with fundamental distrust against multilateralism.

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