The World Trade Organisation (WTO), born out of tough trade talks and negotiations in which China and Russia had to fist-fight their way in, is now in danger.
President Donald Trump’s unilateral imposition of tariffs in what is now becoming a technological warfare against China is indeed a big slap to the WTO.
However, Trump’s possible reconsideration to join the Trans-Pacific Partnership (TPP) might – ironically – save the global trade organisation.
How would that happen?
If the U.S. were to rejoin the TPP after leaving it last year following Trump’s electoral promises to quit the deal, it will boost the WTO’s existentialism.
At least to a certain extent, since it will mean that the U.S. has finally accepted the facts of global trade life.
That is there must be a balance between fair trade and free trade, and the world cannot survive on protectionism.
Last week, the Wall Street Journal said allies are urging Mr. Trump to fix the 164-country body, not marginalize it.
The WTO’s future is particularly uncertain because many member nations – allies with the U.S. – complained about the way China does business.
They accused Beijing of copying the success stories from the Western hemisphere to later abandon the western ‘partners’ that willingly surrendered their technology in a one-way-trafic-technology-transfer-ordeal.
Last year, the Journal hinted at Trump’s move against China with an article that suggested Beijing had swallowed the WTO.
If the U.S. helped created the organisation to smoothen global commerce, the integration of China turned it into a massive battleground.
“It is important to stick to WTO rules, from which the United States is deviating right now,” said Thore Schlaak, with German Institute for Economic Research (DIW Berlin) in an interview with Xinhua today.
Schlaak believes both sides should go back to the table and negotiate on the basis of rules. “This will help go forward to prevent the world from falling into a trade war,” he said.
But the U.S. is negotiating trade deals with other global capitals outside the WTO.
Trump has called the WTO a “disaster” and “very unfair” to the U.S.
Japan’s trade minister, Hiroshige Seko, last Friday called for “a WTO-centered resolution.”
German Chancellor Angela Merkel said European Union leaders “want to continue talks, but only within what we all signed up to in the WTO.”
Experts are saying the U.S. and other nation’s bilateral deals outside the WTO (allowed under the WTO rules) have reduced the organisations’ stature.
It is the proliferation of such deals that have weakened the WTO they say.