The top Democrat on the Senate Finance Committee on Thursday accused the Trump administration of running roughshod over Congress when it criticized longstanding trade principles at an international trade body.
Earlier this week, the U.S. sent a memo to World Trade Organization (WTO) members arguing that the most-favored nation (MFN) principle’s “era had passed,” the Financial Times reported. The MFN principle ensures countries do not discriminate between WTO members and is a core organization rule.
The Trump administration’s tariff adjustments since retaking office have run counter to WTO principles, which say that any tariff reductions offered to one partner should be offered to all WTO members equally unless implemented as part of a broad free trade agreement. But Sam Lowe, the trade policy lead at consultancy Flint Global, said in a weekly newsletter that the WTO memo served as confirmation that the administration “really really does not like [MFN].”
Sen. Ron Wyden, D-Ore., the ranking member of the Senate Finance Committee, defended the MFN principle in a Dec. 18 letter to U.S. Trade Representative Jamieson Greer, and argued that Congress, not the president, gets to decide the direction of U.S. trade policy.
“MFN principles are intended to prevent escalating trade wars that harm American industries, threaten jobs, and drive up consumer prices,” Wyden wrote. “They have been approved by Congress and enshrined in U.S. law.”
Accordingly, Congress, which has constitutional oversight over U.S. trade policy, must decide whether to abandon the principle, Wyden said, and not administration officials.
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USTR did not immediately respond to Agri-Pulse’s request for comment on Wyden’s letter.
The U.S. memo landed at the WTO ahead of a key meeting to discuss the WTO reform negotiations heading into the 14th Ministerial Conference (MC14), slated for March in Cameroon.
The facilitator of those discussions, Norwegian Ambassador Petter Ølberg told members in a report leaked this week by the Trade Beta blog that discussions had progressed since June, but that “considerable work remains.”
“[D]ivergences are real and persistent,” he wrote. When the group meets again in January, he said, members must “return with a genuine determination to reform — with concrete readiness to do things differently — not simply to repeat discussions that have become familiar, comfortable, or safe.”
He said discussions around WTO reform have so far focused on decision-making within the body, development issues and provisions that give developing countries more flexibilities in WTO agreements, known as special and differential treatment. But he said some members have also pushed for including discussions on MFN principles in reform conversations, as well as agriculture and food security.
To advance WTO reform discussions Ølberg suggested that a ministerial-level discussion take place in March at MC14 and get ministers to sign off on a plan for reform discussions post MC14 with clearly defined checkpoints.
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