Preparing for a World Without the World Trade Organization

Preparing for a World Without the World Trade Organization
President Donald Trump shakes hands with Chinese Vice Premier Liu He before signing the “phase one” trade agreement, at the White House, Washington, Jan. 15, 2020 (AP photo by Steve Helber).

Editor’s Note: Guest columnist Edward Alden is filling in for Kimberly Ann Elliott.

The World Trade Organization is dying. We’ll miss it when it’s gone, for many reasons. But one stands out in particular: The WTO helps keep national leaders from doing economically harmful things for domestic political reasons. Without that constraint, we can expect governments to take more and more actions that are politically popular but harmful to both their national economies and to the global economy.

The decision last week by a WTO dispute settlement panel that ruled against the Trump administration’s tariffs on China is a sign of what’s in store. The president’s China trade policy has been a colossal failure—Linette Lopez of Business Insider called it “an unmitigated, farcical disaster.” The U.S. trade deficit with China that once so concerned Trump is now back at the record levels of 2008. China’s purchases of American goods are falling far short of its pledges under Trump’s cherished “phase one” trade deal. And Beijing is backing farther away from structural reform in favor of state-led development. For that, U.S. consumers and manufacturers are paying tariffs of as high as 25 percent on most Chinese imports, while U.S. farmers still face retaliatory tariffs in China and are being bailed out yet again by the government.

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