Thread by @PIIE

THREAD: The WTO found that China's grain policies are a violation of WTO rules....so why is the US attacking the dispute system as unfair? (1/13)

Some background: @USTradeRep today said...
1) China's agricultural policies disregard WTO rules
2) the US will take all necessary steps to enforce the rules & ensure free & fair trade for U.S. farmers, ranchers, workers, & businesses. (2/13) ustr.gov/about-us/polic…

The WTO dispute settlement panel report agreed with the United States that China unfairly subsidized its agricultural producers in 2012, 2013, 2014, 2015, well in excess of its WTO commitments. That was the goal, right? (3/13)

Right, but China could appeal that decision to the WTO's Appellate Body...and the US has been blocking appointees to the WTO Appellate Body for some time. The Body is at 3 members, the minimum needed to render a decision. The panel won't have enough members after Dec 10. (4/13)

Why does the US keep blocking Appellate Body appointees? The US feels WTO members failed to update ambiguous or incomplete rules, so the Appellate Body often makes bad decisions. Appellate Body decisions are binding, which the US claims violates national sovereignty. (5/13)

The US does have legitimate claims about the Appellate Body. But if the entire dispute settlement mechanism grinds to a halt, the WTO would lose its system of final appellate review, & panel rulings would seldom become binding. (6/13)

Aggrieved countries would then lose their legal rights under WTO rules. Failure to resolve this crisis could return the world trading system to a power-based free-for-all, allowing big players to act unilaterally and retaliate to get their way. (7/13)

And this impasse harms US interests. The US is the #1 user of the WTO dispute settlement mechanism, exemplified by the ruling on US complaints about Chinese grain practices. #PIIECharts (8/13)

The US could push for improvements without crippling the dispute settlement mechanism. You can read more about the crisis plaguing the Appellate Body and how to fix it here: (9/13)
piie.com/publications/p…

Instead of paralyzing the Appellate Body, the US should work with WTO officials and member countries to reform the system so it works better for everyone. To learn more about the WTO dispute settlement mechanism... (10/13)

...listen to this podcast by @Trade__Talks: (11/13) piie.com/experts/peters…

...and watch this event and explore presentations and papers about the global trade system: (12/13) piie.com/events/china-u…

Reforming the multilateral trading system is hard. But it is worth it. (13/13)