Internationalists have always dreamed of a court with jurisdiction over all the countries of the world. In 1995, the World Trade Organization was created — allowing the world’s countries to press claims against one another for the first time.
The state of play: That era lasted just 25 years. On Tuesday, the Trump administration — to all intents and purposes — brought it to an end.
Why it matters: By defanging the WTO, Trump ensures that almost every nation will be hurt — including the U.S., which won a record $7.5 billion award in October after it sued Europe for granting illegal subsidies to Airbus.
How it works:
- By blocking all new appointments to the WTO’s dispute-resolution court, President Trump has allowed the body to dwindle from seven members to just one remaining judge.
- That’s not enough for the court to issue a binding ruling.
- From now on, countries will be able to appeal any ruling they don’t like to the WTO’s highest court. Since that court will have no power to rule against them, they’ll be free to continue infringing any WTO rule they want.
Flashback: For some 350 years — from the Treaty of Westphalia in 1648, which marked the beginning of the modern system of nation-states — no such court existed.
- Then, the WTO was created — and, for the first time ever, the world’s countries could take one another to court.
Be smart: “America First” implies an expansion of unilateralism at the expense of the kind of multilateralism exemplified by the WTO, which marked a post-Cold War high point of international cooperation.
What they’re saying: Carla Anderson Hills — who was U.S. Trade Representative when the WTO was created under President George H.W. Bush — tells Axios that the WTO is already being replaced by plurilateral agreements.
- The Trans Pacific Partnership (which continues without U.S. involvement) and RCEP, the China-dominated Regional Comprehensive Economic Partnership, are two examples.
- USTR referred Axios to a statement made Monday by Dennis Shea, the U.S. ambassador to the WTO. Shea’s main complaint is that the WTO court hasn’t been abiding by its own rules, as laid down in 1995.
Winners: Donald “Tariff Man” Trump (his words) can now impose whatever tariffs he likes, without fear that the WTO might find them illegal.
My thought bubble: The WTO was negotiated before China dominated international trade — and before the internet disrupted all global commerce. A new agreement is desperately needed.
- While there’s no way that Trump and U.S. Trade Representative Robert Lighthizer will negotiate such a deal, Trump’s successor might yet do so.
