US rumblings over WTO downplayed

Officials and experts have played down concerns that US President Donald Trump’s administration might defy World Trade Organization rulings, as some believe is signaled in its latest trade agenda report.

In its 2017 trade policy agenda released to Congress on Wednesday, the US Trade Representative office said the administration “will not tolerate” unfair trade practices that distort markets, from currency manipulation to unfair government subsidies and intellectual property theft.

The report signals that the Trump administration may try to push the limits of what is acceptable under WTO rules in its quest to make good on campaign promises to slash US trade deficits with China and Mexico and bring manufacturing jobs back home, Reuters reported.

Asked how China would respond if the US government was to ignore WTO rulings, Foreign Ministry spokesman Geng Shuang said that preserving and improving the WTO-centered, rules-based, fair and open multilateral trade regime is conducive to boosting world trade and economic growth and is in the best interest of all parties.

“China will work with all WTO members to safeguard the important status of the WTO in global economic governance and ensure that the WTO will continue to play a constructive role in world economic affairs,” he told a daily briefing in Beijing on Thursday.

Wayne Morrison, a specialist in Asian trade and finance with the Congressional Research Service, said that despite the rhetoric on trade policies, it is difficult to predict what the Trump administration intends to do regarding the WTO dispute settlement process.

He noted that it was the US that pushed for a strong and effective dispute settlement mechanism when the WTO was created in 1995 because of the ineffectiveness of the dispute settlement process under the GATT. “So it would be somewhat ironic if the United States chose to undermine the WTO’s dispute settlement mechanism,” he told China Daily on Thursday.

Morrison expressed his doubts that it would happen.

The US has been one of the biggest users of the WTO dispute settlement process, although it has been one of the biggest targets as well, according to Morrison. The US has brought 21 dispute settlement cases against China and has largely prevailed.

Morrison argued that not abiding by WTO dispute settlement rulings could undermine the process. “How could one WTO member insist that other members comply with WTO dispute settlement decisions that it prevails in but then refuse to comply with cases that go against it?” he said.

White House Press Secretary Sean Spicer was also asked on Wednesday if the US will potentially ignore WTO rules.

“No,” Spicer said. “That is not our policy and that’s not where we’re going.”

Edward Alden, a senior fellow at the Council on Foreign Relations, said the document does not suggest that the US is prepared to blow up the dispute settlement rules of the WTO.

But he said it rightly notes that the WTO dispute bodies have at times overstepped their authority in challenging US trade laws in such areas as the “safeguard” rules designed to protect US industries from a sudden, harmful surge in imports.

“More importantly, it calls out the limitations of WTO rules in ensuring fair trading relationships with ‘large countries that do not adhere to free-market principles in the organization of their economic systems’ — an unspoken reference to China,” he wrote on the CFR website on Wednesday.

Morrison noted the frustration on the US side regarding China’s compliance with its WTO commitments.

“Therefore, it is very important for the two sides to do more to resolve trade disputes, as well as to push forward on new agreements, such as completing negotiations for a US-China Bilateral Investment Treaty and the completion of China’s accession to the WTO’s Government Procurement Agreement,” he said.

China will work with all WTO members to safeguard the important status of the WTO ... ” Geng Shuang, Foreign Ministry spokesman