With US going rogue, world seeks new trade consensus
washington — Trade ministers will meet in Argentina with one of the traditional defenders of free markets, the US, questioning the benefits of the international rules it helped to forge.
Even though trade volumes are set to grow faster than the world economy this year for the first time since 2014, members of the World Trade Organisation will gather in Buenos Aires concerned about the outlook. While he hasn’t followed through on many of his threats to rip up trade accords or take on China, Trump is questioning the WTO’s ability to police global commerce. He’s also threatening to walk away from the North American Free Trade Agreement after withdrawing from a 12-nation Asia-Pacific trade pact early this year.
With the US doubting the WTO’s very purpose, it will be difficult for trade ministers to make headway in their meetings on anything but narrow issues such as illegal fishing and agricultural subsidies.
“Without US leadership for a positive agenda, there is a clear risk that energies of WTO members could dissipate across the
Without US leadership for a positive agenda, there is a clear risk that energies of WTO members could dissipate across the fragmented set of issues and that few policy proposals will advance to conclusion
Douglas Lippoldt, chief trade economist at HSBC
fragmented set of issues and that few policy proposals will advance to conclusion,” Douglas Lippoldt, chief trade economist at HSBC, said in a research note.
The US played a leading role after the Second World War in negotiating a set of agreements, known as GATT, that committed countries to follow common rules and cut tariffs. The system formed the basis of the WTO, which was created in 1995 and now referees trade disputes.
At the dawn of the millennium, the WTO was pushing trade talks that would lead to a sweeping reduction in tariffs. Those talks, known as the Doha round, have collapsed. In Buenos Aires, ministers will be seeking progress on less challenging topics, including subsidies. — Bloomberg