COLUMNS

Trump and the WTO's Uncertain Future

undefined and Senior Global Analyst at RANE
Matthew Bey
Senior Global Analyst at RANE, Stratfor

Nov 1, 2018 | 09:00 GMT

A sign of the World Trade Organization (WTO) is seen at the body's headquarters in Geneva on Sept. 21.

A sign of the World Trade Organization (WTO) is seen at the body's headquarters in Geneva on Sept. 21. The WTO will confront a severe test in 2019 as the Donald Trump administration attempts to sideline the body's dispute settlement process.

(FABRICE COFFRINI/AFP/Getty Images)

Highlights

  • The Trump administration will maintain its pressure on the World Trade Organization in an effort to undermine the body's dispute settlement process, arguing that it has obstructed the range of U.S. action.
  • Because the United States believes the WTO's rules-based order has failed to give the country the tools it needs to challenge China, Washington will continue to exert pressure on Beijing from outside the organization.
  • Efforts to reform the WTO, as well as persuade the United States to ease its pressure on the body, will struggle under the Trump administration.
  • In the long run, U.S. administrations are likely to push for new global trade rules that are geared more toward a 21st-century struggle with China, rather than a 20th-century fight with the Soviet Union.

U.S. President Donald Trump has his guns trained on China today, but a bigger war is brewing at the World Trade Organization -- where the future of the global trade system is at stake. For the past two years, the United States has blocked new appointments to the WTO's Appellate Body, the organization's de facto supreme court over trade disputes. And unless new appointments are made by Dec. 10, 2019, the body's membership will fall below the number needed to rule on cases. In effect, the United States is threatening to sideline the WTO's crowning achievement -- a strong dispute-resolution mechanism -- giving the rest of the world just one year to offer concessions on reform to the United States, to seek other options or to face a world where the mechanism disintegrates. With the ascendance of a new global power -- China -- the Trump administration may have already decided...

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