Two great questions here.
- Is the @WTO doomed?
- What is the FART Act, really?
Answering in a thread 👇 and retweeting in case others are interested.
- Is the @WTO doomed?
- What is the FART Act, really?
Answering in a thread 👇 and retweeting in case others are interested.
The WTO is unquestionably facing its greatest challenge in its history.
The WTO has struggled before, but generally this has been combined to the negotiations (new rules) pillar of its work, while monitoring and dispute resolution ticked along.
This situation is different.
The WTO has struggled before, but generally this has been combined to the negotiations (new rules) pillar of its work, while monitoring and dispute resolution ticked along.
This situation is different.
The dispute settlement system is in trouble because the US is blocking appointments to the Appellate Body (think WTO Supreme/High Court).
Because appointments are for a fixed term, the Body may soon drop to less than the three judges it needs to convene a panel.
Because appointments are for a fixed term, the Body may soon drop to less than the three judges it needs to convene a panel.
Monitoring is in trouble too. The US has been arguing for a while that Members aren't taking their transparency requirements seriously, making a mockery of the system.
Thats kind of fair. China for example spends billions on Agriculture Subsidies. Last notification was 2010.
Thats kind of fair. China for example spends billions on Agriculture Subsidies. Last notification was 2010.
More fundamentally there is an argument that existing rules just can't cope with State Capitalism on the scale being practiced by China.
Of course the more pressing issue is the trade war. The WTO and the GATT are built on the consensus that tit for tat tariffs are bad for everyone.
The Trump administration in contrast believes trade wars are good and easy to win.
That brings us to the FaRT Act.
The Trump administration in contrast believes trade wars are good and easy to win.
That brings us to the FaRT Act.
Useful to understand what the Act does.
Under US law, Congress is in charge of tariffs but the President has some 'break in case of emergency' powers.
This is similar to how only Congress can declare war, but the President can still send troops places.
Under US law, Congress is in charge of tariffs but the President has some 'break in case of emergency' powers.
This is similar to how only Congress can declare war, but the President can still send troops places.
So far, when firing broadsides in the trade war, Trump has had to follow a strict set of procedures (so called 232 and 301 investigations).
Put very simply, the Commerce Department has to investigate each product and determine there's an emergency or national security threat.
Put very simply, the Commerce Department has to investigate each product and determine there's an emergency or national security threat.
Under the FaRT Act, this would no longer be necessary. Congress hands Trump the authority to set tariffs, including in excess of international commitments under the WTO and US FTA's like NAFTA and KORUS.
The image of handing a flamethrower to a toddler comes to mind.
The image of handing a flamethrower to a toddler comes to mind.
So is the WTO doomed?
Well, first the FaRT Act was drafted in May and immediately forgotten because it would be dead on arrival in Congress.
Second, as often happens the attack on the system has reminded Members why they need it. The EU, Japan and even China are rallying to it.
Well, first the FaRT Act was drafted in May and immediately forgotten because it would be dead on arrival in Congress.
Second, as often happens the attack on the system has reminded Members why they need it. The EU, Japan and even China are rallying to it.
Third, this crisis is kick-starting a much needed conversation about WTO reform.
Fourth, finally and most importantly, the system has to survive because I have literally no other skills. If the WTO dies, send food.
/Thread
Happy to expand/clarify/be corrected.
Fourth, finally and most importantly, the system has to survive because I have literally no other skills. If the WTO dies, send food.
/Thread
Happy to expand/clarify/be corrected.
