Not Following the WTO Process. It risks pushing everyone into a trade war and a seriously dangerous downward spiral. Trump’s memorandum on the tariffs gives the US trade representative that option of pursuing the four year process, even if his rhetoric did not indicate that.Criticisms of the WTO’s System Most trade experts see the WTO’s arbitration forum as one of its most successful efforts, helping to institutionalise rules and reduce the threat of trade wars. However, critics, including the Trump administration, have criticised the WTO system on several grounds. The US Trade Representative (USTR) Robert Lighthizer has argued the WTO has an anti US bias because 134 complaints have been brought against the US, more than any other country, and it has lost most of those cases. But, many economists argue this is misguided, noting that complain-ant countries, including the US, usually win cases they bring to the WTO because they tend to bring only the strongest cases. As former USTR Michael Froman points out, the US under President Barack Obama brought more cases to the WTO than any other country during that time, including sixteen against China. The US won all those cases that have been decided.
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US-CHINA Trade War: Analyses of Deeper Nuances and Wider Implications33Other analysts argue that the WTO has been increasingly undermined by its most powerful members, including the US. For instance, the Obama administra-tion ignored a series of unfavourable rulings and blocked the appointment of a WTO judge for the first time.37The WTO rules, written before many of these technologies were even envisioned, are not adequate for regulating, say, digital trade. Rather than expressing disgust with the WTO, Trump should want America to lead it, as it has before —by rewriting rules that need to be updated and putting more teeth into the enforcement mechanisms.Key Challenges Facing the WTO at Institutional LevelAt the institutional level, key challenges facing the WTO are:- Decision making in the WTO is close to be paralysed. Consensus based decision making all too often turns into veto politics, incoherence and turf battles amongst members, yet consensus in some form or another remains essential to legitimacy and good policy implementation. The WTO has focused far too much on trade liberalisation since its creation. Large multilateral trade negotiations are no longer feasible and many other venues for sector specific negotiation exist. More attention needs to be paid to upholding the WTO’s rule making function. The existence of the rules is more important than is under-stood by populist rhetoric as mechanisms for enhancing pre-commitment, levelling and compliance. The future of the WTO is in jeopardy unless responsible global actors can pick up the baton dropped by the US.
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