Trump need not bother ig­nor­ing trade body as his coun­try has had high rate of suc­cess in ar­gu­ing cases

New Straits Times - - Business World -


UNITED StatesPres­i­dent Don­ald Trump has hinted the US is pre­pared to ig­nore rul­ings by the World Trade Or­gan­i­sa­tion (WTO). He may not have to bother, be­cause Amer­ica’s lawyers of­ten win any­way.

The US has a bet­ter-than-av­er­age rate of suc­cess in ar­gu­ing cases at the WTO, ac­cord­ing to a Bloomberg anal­y­sis of the 524 cases lodged at the Genev­abased or­gan­i­sa­tion since it was founded in 1995.

“On bal­ance, it’s been a pretty good sys­tem for the US,” said Gary Huf­bauer, a se­nior fel­low and trade ex­pert at the Peter­son In­sti­tute of In­ter­na­tional Eco­nom­ics, here.

“The US has got­ten other coun­tries to change their prac­tices, where it would have been much harder through the old ways of diplo­matic ne­go­ti­a­tions or uni­lat­eral re­tal­i­a­tions.”

Trump has blamed com­pe­ti­tion from China and trade deals such as the North Amer­i­can Free Trade Agree­ment for cost­ing Amer­i­can jobs and hol­low­ing out its man­u­fac­tur­ing sec­tor.

As a can­di­date, he threat­ened to pull the US out of the WTO, which grew out of the sys­tem of global trade rules that coun­tries de­vel­oped af­ter the Sec­ond World War.

In a re­cent out­line of its trade agenda, the US govern­ment noted that the coun­try isn’t bound by de­ci­sions made at the WTO.

“The Trump ad­min­is­tra­tion will ag­gres­sively de­fend Amer­i­can sovereignty over mat­ters of trade pol­icy,” said a re­port by the Of­fice of the US Trade Rep­re­sen­ta­tive.

When the US has com­plained against the trade prac­tices of other coun­tries, it won 86 per cent of the time, slightly bet­ter than the WTO av­er­age, Bloomberg data shows.

For WTO cases filed against the US, it lost less of­ten than the av­er­age — about 75 per cent of the time com­pared with more than 84 per cent for all na­tions.

Gov­ern­ments that be­lieve other coun­tries have vi­o­lated in­ter­na­tional trade rules can bring com­plaints to the WTO, which es­tab­lishes pan­els of three to five ex­perts to hear the ev­i­dence.

Huf­bauer said com­plainants usu­ally win be­cause coun­tries try to file com­plaints they know they have a good chance of win­ning.

Amer­ica’s suc­cess rate is prob­a­bly due to a num­ber of fac­tors, in­clud­ing the rel­a­tive fair­ness of the coun­try’s trade prac­tices and the skill of US govern­ment trade lawyers, he said. Bloomberg

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