Opinion | US bending of rules must stop if WTO is to be effective trade forum
By Augustus K. Yeung
INTRODUCTION
Isn't it amazing that two years after former US president Donald Trump left the White House, Joe Biden, the incumbent president is still following to the letter Trump's anti-China trade policy, fueling US-China rivalry, and hurting bilateral ties?
It's true that Biden has regained US leadership in Europe by standing up to Russia in its conflict with Ukraine, leading NATO countries by concertedly sending arms and ammunitions to resist Russia's invasion, an act which is diametrically opposed to Trump's "America First" policy.
However, this US current trade policy of disobeying WTO trade rules is hurting Biden's legacy, which if not changed is detrimental to America and Joe Biden's reputation as the nation has been known as the champion of free trade. With these credentials gone, Biden's good name will be ruined.
In view of the Russia-Ukraine conflict, the American-led sanctions against Russia have economically hurt many European countries, as well as many other nations around the world.
Will this rule-breaking trade behavior on America's part be the last straw that break the camel's back?
To get a better understanding of the current trade issue, a case against America, it's better that the readers get to know exactly what's going on as far as WTO rules are concerned.
With Mid-terms Election Won, Biden Has No Excuse Not to Dump Trump's Initiated Trade War
A legacy of former president Donald Trump's trade war is that it fueled anti-China and protectionist sentiment in the United States. His critics therefore had to weigh the domestic political cost of reversing it, against the cost to America's free-trade credentials of going on with it. Politics won. President Joe Biden's administration has done little to improve relations. Now the US has suffered a further blow to its reputation, with a World Trade Organization panel brandishing it a rule-breaker. The WTO ruled that Trump's tariffs on steel and aluminum imports – on "security grounds" – contravened global trading rules in a judgment immediately criticized by Washington.
The ruling was a moral victory for China, Norway, Switzerland and Turkey, underscoring the argument that the tariffs war untenable from the start. Unfortunately, the Biden administration says the findings are "flawed" and that it will mount an appeal. If that were to happen, it would send the whole process into a legal void, because Trump blocked appointments to the WTO Appellate Body, which renders the final arbiter incapable of delivering a verdict.
Who's the Bigger Rule Breaker, China or the US?
China should, as is within its right, file a WTO complaint against the US Chips and Science Act, which aims to cut if off from certain high-end semiconductor chips made anywhere in the world with US technology. The spirit of "beggar thy neighbor" runs contrary to the spirit of globalization and fair competition, of which the US was a key proponent and frequent preacher, before Trump took office with his brand of populist politics.
According to a December 2021 study by Columbia University, 12.2 percent of all WTO dispute cases have targeted China since it joined the organization in 2001. Over the same period 28.4 per cent of cases have targeted the US, the purveyor of free trade, fair competition and globalization. In other words, WTO members regarded China as only half as likely as the US to violate its obligations, said Wei Shang-jin, a professor of finance and economics, who wrote the report.
China said it hoped the US would respect the panel ruling and "correct its wrongful conduct as soon as possible". The Office of the US Trade Representative said the panel report reinforced the need for WTO reform. To be fair, China too remains the target of at least three other complaints brought by Australia and Canada. They concern punitive import tariffs and bans on Australian wine, barley and Canadian canola, following Beijing's geopolitical tiffs with Canberra and Ottawa.
The WTO may indeed be in need of reform to help put globalization and multilateralism back on track. But that is hardly a reason for powerful nations to bend the rules to their own advantage rather than trying to restore it as an effective global trade forum. (Source: SCMP)
CONCLUSION
Bending of rules must stop if WTO is to be an effective trade forum: First, the United States whose violations of trade rules against China, Norway, Switzerland and Turkey must be put to an end; it is unfair and is setting a bad example, considering America's ambition of being a world leader in its own right.
In fact, the lukewarm ways that America is getting in the Middle East and Far East, should be a stark warning to the United States that its bullying trade policies must be revised, or there will be more loss of respect for American leaders on the world stage, taking the world's recent summits as signals, or bad omens.
China, too, must rethink its way of banning Australian export wines simply because their political leaders were rude and hostile to China for blatantly accusing it of spreading "the Wuhan virus" as its former PM Scott Morrison was instigated and misled by the Americans.
Although it was true that those Australia politicians and political leaders were wrong, it didn't seem right for China to punish Australian businesspeople who, in fact had opposed their government's anti-China sentiment and behavior. For example, the vice president of Macau's Australian business community even resigned in protest. The outcome of the general election, too, proved that China was right, but the innocent Australian businesspeople have already paid a hefty price.
The Columbia University study showed that 12.2 per cent of all WTO dispute cases have targeted China since it joined the organization in 2001, and that over the same period 28.4 per cent of cases have targeted the US, the purveyor of free trade.
Evidently, both economic superpowers must lead by observing and guarding WTO rules.
The author is a freelance writer; formerly Adjunct Lecturer, taught MBA Philosophy of Management, and International Strategy, and online columnist of 3-D Corner (HKU SPACE), University of Hong Kong.
The views do not necessarily reflect those of DotDotNews.
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