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    World Trade Organization (WTO) headquarter in Geneva (Switzerland)

    Careless US Approach to Global Trade Shows It Doesn't Need to Formally Exit WTO

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    In early March, Trump's administration indicated its unwillingness to follow some of the World Trade Organization's decisions regarding trade disputes and other issues. According to political observer Tatyana Golovanova, Washington is "getting increasingly dissatisfied with the current WTO rules."

    Golovanova noted that the US trade deficit has mostly arisen as result of certain provisions of the trade organization, which is why the US has become increasingly unhappy about its membership.

    "Washington is dissatisfied with low tariffs on imported goods. Membership in the WTO also imposes certain restrictions on more favorable bilateral trade agreements. Donald Trump is very much unhappy about it. After all, all this contradicts his plans to make America great again," she added.

    Donald Trump believes that some WTO provisions bring the US economy more harm than good. In late April, he signed an order directing a systematic evaluation of the impact of every trade agreement that the United States has ever signed, including the General Agreement on Tariffs and Trade, which governs trade between World Trade Organization (WTO) members.

    According to Trump, bad trade deals are the main reason for US unemployment and the fact that the national economy has lost millions of manufacturing jobs. He has already withdrawn from the Trans-Pacific Partnership (TPP) and suspended negotiations over the Transatlantic Trade and Investment Partnership (TTIP) with the EU.

    At the same time, Golovanova believes that despite all its discontent, Washington is unlikely to withdraw from the WTO.

    "Can the largest economy leave the World Trade Organization? Theoretically, everything is in Trump's hands. But in practice — it is difficult for the new president to negotiate even simple problems with the establishment, let alone such strategic issues," Golovanova wrote.

    WTO members have repeatedly proposed reforming the organization. But these attempts failed, among other things, because of the emergence of protectionist projects like the TPP and the TTIP, the expert noted.

    "Many are also dissatisfied with the resolution of disputes in the World Trade Organization. Such procedures can last years and usually have no significant results," she noted.

    As an example, Golovanova cited Washington's unwillingness to follow the WTO's ruling with regard to US countervailing duties on carbon steel imports from India. The decision was made in 2014, but the White House still has not fulfilled his obligations.

    "A similar fate awaits a lawsuit over unfair support for Boeing. It is hard to believe that Trump will step back from his line of tax cuts for American producers and suddenly stop helping his aircraft industry," Golovanova noted.

    In her opinion, the US doesn't actually need to formally leave the WTO, taking into account how carelessly it has been already dealing with the world trade's rules.

    "If you do not follow the rules, you can destroy the system from the inside. Washington does it, and gives an example to others," Golovanova concluded.

    Related:

    Trade War: Trump Proposes to Ignore WTO Rules That ‘Violate’ US Sovereignty
    WTO Without US? Trump Trade Agenda Clashes With New Global Rules
    Tags:
    global trade, World Trade Organization (WTO), United States
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