WASHINGTON, March 1, 2017 – The Trump administration today announced a trade agenda that that would make the U.S. less beholden to rulings by the World Trade Organization, stressing that U.S. sovereignty should be the primary concern when it comes to international disputes.
In a major shift from current practices, the 2017 Trade Policy Agenda explained that “even if a WTO dispute settlement panel – or the WTO Appellate Body – rules against the United States, such a ruling does not automatically lead to a change in U.S. law or practice. Consistent with these important protections and applicable U.S. law, the Trump Administration will aggressively defend American sovereignty over matters of trade policy.”
The 200-plus page report, which also contains the annual report on trade programs for 2016, lays out a lengthy legal justification for weakening WTO constraints on the U.S. at a time when the Office of the U.S. Trade Representative is using the dispute settlement process to try to stop Chinese agricultural supports and trade barriers that impact U.S. farmers.
In December the USTR challenged China over its failure to import enough wheat, corn and rice to meet its promised tariff rate quotas. That was three months after the USTR filed a complaint on China’s domestic price supports that are far above market rates. Those supports, the U.S. claimed, distort world markets and cause billions of dollars in losses every year for U.S. farmers and exporters.
One of the key complaints registered in today's report is China’s accession into the WTO in 2001. Since then, the report charges, the U.S. trade deficit in manufactured goods has more than doubled from $317 billion in 2000 to $648 billion in 2016.
The report takes specific aim at countries with policies that “do not reflect market forces” and laments that the global economy has been “times distorted by foreign government subsidies, theft of intellectual property, currency manipulation, unfair competitive behavior by state-owned enterprises, violations of labor laws, use of forced labor, and numerous other unfair practices.”
The WTO, the report alleges, is at fault when it “adopts interpretations of WTO agreements that undermine the ability of the United States and other WTO members to respond effectively to these real-world unfair trade practices with remedies expressly allowed under WTO rules … “
It’s a situation the Trump administration says it will not accept.
“None of these outcomes is in the interest of the United States or a healthy global economy,” the report states. “Accordingly, the Trump Administration will act aggressively as needed to discourage this type of behavior – and encourage true market competition.”
A part of the report is also dedicated to supporting President Donald Trump’s preference for bilateral trade agreements over multilateral pacts as well as Trump’s insistence that the North American Free Trade Agreement be renegotiated.
“The Trump administration believes in free and fair trade, and we are looking forward to developing deeper trading relationships with international partners who share that belief,” the report says. “But, going forward, we will tend to focus on bilateral negotiations, we will hold our trading partners to higher standards of fairness, and we will not hesitate to use all possible legal measures in response to trading partners that continue to engage in unfair activities.”
Republican Reps. Kevin Brady of Texas and Dave Reichert of Washington said today that they firmly support Trump’s desire to renegotiate NAFTA, but also stressed the importance of a strong WTO.
“I strongly believe that our current trade agreements — including the WTO — have been successful for Americans because these agreements establish a firm rule of law to hold our competitors in check and open markets for us to sell our goods, services, and farm products,” said Brady, who is chairman of the House Ways and Means Committee. “They have also made a broad array of products available to American families at affordable prices. And when other countries don’t follow the rules, our agreements give us powerful tools through a dispute settlement process to retaliate against them.”