By Simon Nixon | Jul 11, 2018
TOPICS: World Trade Organization
SUMMARY: The global rules-based trading system of the World Trade Organization (WTO) is under unprecedented strain. President Donald Trump’s trade agenda is creating a crisis that may unravel the trade arrangements that have been the basis for global trade and helped to avoid devastating trade wars for decades. Two actions in particular by the Trump administration are putting the WTO in a precarious position. First, the Trump administration used national security as its justification for tariffs on imported steel and aluminum. Second, the administration is blocking the appointment of new judges to the WTO’s appellate body, the ultimate arbiter of international trade disputes. There are articles of the WTO agreement that the other members of the WTO could invoke to try to preserve the rules-based system of the WTO, but using mechanisms to override a U.S. veto could trigger a U.S. exit from the WTO.
CLASSROOM APPLICATION: This article can be used to profile the role of the WTO and to discuss the challenges it currently faces.
1. What are the sources of crisis facing the WTO?
3. How should the WTO rule on complaints about the Trump administration using national security to impose tariffs on imported steel and aluminum? Defend your position.
4. Do you believe the United States should exit the WTO? Explain your point of view.