1/
Trump has ended the WTO’s way of resolving trade disputes disputes. The system worked for 25 years.
The big question is WHY.
In a new essay, @SoumayaKeynes and I tell the story…
piie.com/publications/w…
Trump has ended the WTO’s way of resolving trade disputes disputes. The system worked for 25 years.
The big question is WHY.
In a new essay, @SoumayaKeynes and I tell the story…
piie.com/publications/w…
2/
The origins of WTO dispute settlement are a HUGE part of the story.
Before the WTO there was the GATT. But GATT dispute settlement did not work.
And other problems plagued the 1980s.
The world HATED America's voluntary export restraints - on Japanese cars, EC steel...
The origins of WTO dispute settlement are a HUGE part of the story.
Before the WTO there was the GATT. But GATT dispute settlement did not work.
And other problems plagued the 1980s.
The world HATED America's voluntary export restraints - on Japanese cars, EC steel...
3/
In 1995, the WTO became the compromise. It provided binding dispute settlement, which MOST Americans LIKED.
It asked the US to stop using VERs. (The US mostly stopped using those.)
But the WTO also preserved "policy space" (the Americans thought) to use TRADE REMEDIES**...
In 1995, the WTO became the compromise. It provided binding dispute settlement, which MOST Americans LIKED.
It asked the US to stop using VERs. (The US mostly stopped using those.)
But the WTO also preserved "policy space" (the Americans thought) to use TRADE REMEDIES**...
4/
**TRADE REMEDIES = special tariffs, and refer to
• Antidumping
• Countervailing duties (CVDs) – anti-subsidy tariffs
• Safeguards
These are politically important to Congress in America.
As well as to people like Trump's USTR Robert Lighthizer, it turns out.
**TRADE REMEDIES = special tariffs, and refer to
• Antidumping
• Countervailing duties (CVDs) – anti-subsidy tariffs
• Safeguards
These are politically important to Congress in America.
As well as to people like Trump's USTR Robert Lighthizer, it turns out.
5/
WHAT HAPPENED?
A quick look at WTO dispute caseload reveals nothing odd.
US is the biggest using country ON BOTH sides, but normal:
• Its offensive disputes line up with its share of global exports.
• Its defensive disputes line up with its share of global imports.
WHAT HAPPENED?
A quick look at WTO dispute caseload reveals nothing odd.
US is the biggest using country ON BOTH sides, but normal:
• Its offensive disputes line up with its share of global exports.
• Its defensive disputes line up with its share of global imports.
6/
WHAT WAS THE PROBLEM?
The policies that trading partners TARGETED with their WTO disputes against America became a sore point.
Nearly 2/3 of all WTO disputes against America were about US trade remedies.
And the Americans lost those cases.
WHAT WAS THE PROBLEM?
The policies that trading partners TARGETED with their WTO disputes against America became a sore point.
Nearly 2/3 of all WTO disputes against America were about US trade remedies.
And the Americans lost those cases.
7/
To some Americans, the CAUSE of the DECLINE in US trade remedy use (eg, 1999-2013) is obvious!
“The WTO Appellate Body took our trade remedies away!!!”
But there were LOADS of other causes - including GVCs. F
Firms often decided they DID NOT WANT trade remedy protection.
To some Americans, the CAUSE of the DECLINE in US trade remedy use (eg, 1999-2013) is obvious!
“The WTO Appellate Body took our trade remedies away!!!”
But there were LOADS of other causes - including GVCs. F
Firms often decided they DID NOT WANT trade remedy protection.
8/
But A LOT of US trade remedies subsequently became subject to WTO dispute.
And the US mostly lost those cases, as most defendant countries do. (Nothing un-ordinary there either)
NOTE: the US WON most of its cases against other countries it brought on the OFFENSIVE side.
But A LOT of US trade remedies subsequently became subject to WTO dispute.
And the US mostly lost those cases, as most defendant countries do. (Nothing un-ordinary there either)
NOTE: the US WON most of its cases against other countries it brought on the OFFENSIVE side.
9/
Look at the USTR’s “Report on the Appellate Body of the World Trade Organization” published on February 11.
Note: FOUR of the five USTR complaints are about TRADE REMEDIES (antidumping is in there TWICE!)
👉🏾 ustr.gov/sites/default/…
Look at the USTR’s “Report on the Appellate Body of the World Trade Organization” published on February 11.
Note: FOUR of the five USTR complaints are about TRADE REMEDIES (antidumping is in there TWICE!)
👉🏾 ustr.gov/sites/default/…
10/
Are there some legitimate US gripes with WTO dispute settlement?
Arguably yes. But not in the way the Trump administration complains about it.
It involves China.
But the concern is TOO FEW OTHER COUNTRIES were willing to pull their weight to challenge China at the WTO
Are there some legitimate US gripes with WTO dispute settlement?
Arguably yes. But not in the way the Trump administration complains about it.
It involves China.
But the concern is TOO FEW OTHER COUNTRIES were willing to pull their weight to challenge China at the WTO
11/
Thanks for reading this thread (it was long).
And the essay is longIish too (sorry about that), but the issue is important.
(It is maybe a good weekend read? 🤓 )
piie.com/publications/w…
Thanks for reading this thread (it was long).
And the essay is longIish too (sorry about that), but the issue is important.
(It is maybe a good weekend read? 🤓 )
piie.com/publications/w…
12/
In the meantime, if you would like the ONE PAGE version of this story (with only ONE chart), here it is....
"Why did Trump end the WTO's Appellate Body? Tariffs."
By @ChadBown & @SoumayaKeynes
ENDS /
piie.com/blogs/trade-an…
In the meantime, if you would like the ONE PAGE version of this story (with only ONE chart), here it is....
"Why did Trump end the WTO's Appellate Body? Tariffs."
By @ChadBown & @SoumayaKeynes
ENDS /
piie.com/blogs/trade-an…
