Donald Trump’s wrecking ball assault on WTO laid bare as US line up trade revolution

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Five candidates are in the running to take the reins of the WTO – at a time when the credibility of the institution is at its lowest. The current director general, Roberto Azevêdo, from Brazil, said he will leave the organisation on August 31 — one year before his mandate was due to expire. Mr Azevêdo cited personal reasons for leaving, but also said it would be good for the institution to have a different leader to face “the new post-COVID realities”.

Change is taking place at a time when many are questioning the future of the WTO as an advocate for international trade.

The WTO has been scared by the US’ decision in December to block the appointment of two new members to the Appellate Body, as the move meant that the organisation has not been able to rule on new trade disputes between member countries since then.

Moreover, earlier this year, US President Donald Trump called the WTO “broken,” saying countries such as China have taken advantage of it.

Meanwhile, the WTO’s largest members have been engaged in a series of tit-for-tat tariffs, which have taken their toll on the idea of multilateralism — when a group of countries agree on specific trade rules to boost their economies.

As many analysts believe the organisation needs to regain credibility, Dr Stephen Woolcock, head of the London School of Economics (LSE) ‘s International Trade Policy Unit and former consultant to the European Parliament and the European Commission, shed light on Mr Trump’s real plan for the WTO.

He told “The US is getting impatient. This was already happening under President Obama.

“Then, Donald Trump came to power and said ‘I don’t need this multilateralism’.

“His current position is threatening the organisation to undermine the credibility of it.

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“There are different ways of understanding it.”

He continued: “The general understanding is that the US wants to precipitate a crisis so it can change the rules.

“The US doesn’t believe that the rules reflect the US’ interests. But that they benefit China more than anyone else.

“So what Trump is doing is precipitating a crisis in order to shake things up.

“They have done this by blocking the appointment on the Appellate Body, which deals with disputes.

“That undermines the credibility of the WTO and also means that if there are any trade disputes, it won’t be resolved through balance in a multilateral setting.

“It will be the law of the jungle: the strongest will determine the outcome.”

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In a recent entry for the London School of Economics (LSE) blog, Mr Woolcock explained why the WTO does need deep reform.

He wrote: “Even before the coronavirus pandemic, the world trading system was not in great shape. Trade protection was averted in the aftermath of the 2008 financial crisis thanks to a shared commitment to resist protectionist responses on the part of the major trading powers.

“But over time, protectionist measures have grown.

“After years of trying, the Doha Development Agenda (DDA) in the World Trade Organisation (WTO) negotiations effectively came to an end in around 2014 with no real progress.

“Then the incoming Trump administration initiated an aggressive, unilateral trade policy in an attempt to force its trading partners to make concessions.”

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