The Problematic Future of The World Trade Organization.

• Author: Frazier, Tyler

INTRODUCTION

The World Trade Organization (WTO) is based in Geneva, Switzerland and was established in 1995, replacing the General Agreement on Tariffs and Trade (GATT), which started in 1948. It is responsible for overseeing the rules of international trade among its 164 member countries. The WTO also monitors the implementation of trade agreements and acts as a forum to help settle any trade disputes between countries. Its most basic founding principle is "a commitment to openness, meaning reducing tariffs as well as limiting quotas, import bans, distorting subsides, and other barriers to trade" (McBride, 2018). Another principle is nondiscrimination, whereby all member countries must treat trade with other countries equally. The WTO as an organization strives for transparency and predictability when it comes to trade related regulations. James McBride, writing recently for the prominent Council on Foreign Relations, says, "the WTO is also committed, in principle, to giving less-developed countries flexibility and accommodations to help them adjust to new rules" (McBride, 2018). Trade decisions made by the WTO must be unanimous and these decisions are binding on its members with rare exceptions. The rules and decisions made by the organization are enforced by the individual countries themselves, including the imposition of trade sanctions on other members that violate these agreements and decisions.

To better understand the tensions between the WTO and the Trump administration, it is important to know the WTO history of handling conflicts. Out of the more than 500 official disputes that the WTO has overseen since 1995, most of them are settled by consultation with the remaining few requiring litigation. When an issue arises and a member country files a complaint against another country, they must first try to resolve the problem via negotiation. If consultation does not work, then a three judge WTO panel is chosen from a group called the Dispute Settlement Body which has seven judges. These judges are selected for four-year terms and are eligible for reappointment to a second term. After a WTO ruling, the offending country must then implement whatever recommendation the panel provides, unless it is overturned on appeal. Upon failure to implement the panel's recommendation, the complaining country can use punitive measures such as raising tariffs or blocking imports.

President Trump claims that the dispute settlement system is biased against the United States, despite the fact the U.S. wins the majority of the cases it is involved with. Unsurprisingly, the United States has been a very active member when it comes to dispute settlements (116 filed complaints and 136 cases as a defendant), especially when it comes to China. Of the 25 cases the United States filed with the WTO during the Obama administration, 16 of them were against China. President Trump's administration went further by instituting tariffs targeting steel and aluminum from China and other nations. These unilateral tariffs violate WTO rules. Pascal Lamy, former Managing Director of the WTO from 2005 to 2013, has an...