Thursday, 24 May 2018

The World Trade Organisation relies too much on international goodwill

As Tahir Maher points out in Liberal Democrat Voice, "decision making in the WTO is still based on consensus diplomacy by 160 members with different outlook and views working on the principle that nothing is agreed until everything is decided." As a result,

Over the last decade, numerous stalled negotiations have beset WTO credibility. [...] An ineffectual WTO will hurt everyone, but the most significant impact will be felt by the poor. In 2010 the Millennium Development Goals achieved one of its objectives, and that was to cut extreme poverty by half. Achieving this objective was aided by economic growth in poorer countries that took advantage of low tariffs and open markets where WTO played an essential role in overseeing trade rules are appropriately negotiated, implemented and monitored. A possible trade war and a weak WTO will result in wealthier countries uplifting their tariffs and introducing other protective measures. The current playing field, as it were, would be ineffective, and the strong countries would push poorer countries to accept harsher trade deals.

The disputes procedure is also hamstrung, with the result that President Trump's recent imposition of tariffs on "national security" grounds has practically passed unpunished. China has a case.

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