U.S. Pledges Work to ‘Improve’ WTO Rather Than Destroy It

By Bryce Baschuk

The Trump administration may be frustrated with the World Trade Organization, but it would rather work to strengthen the Geneva-based trade body than blow it up.

The Office of the U.S. Trade Representative June 8 issued a three-paragraph statement that said the U.S. “recognizes the importance of international trading systems” and is committed to “working with other members to improve the functioning of the WTO.”

The USTR statement, which was not attributed, added that trade “has not always worked to the benefit of everyone” and certain “unfair trade practices” have harmed U.S. interests and created “large, persistent trade imbalances.”

The statement, released during a WTO mini-ministerial meeting in Paris, marks a shift in tone from President Donald Trump’s campaign description of the WTO as a “disaster” and his threat to withdraw from the organization entirely.

‘Quite Clear’

In his first WTO address as U.S. trade representative, Robert Lighthizer told his colleagues that the WTO was so essential that if it hadn’t already been invented it would need to be.

That said, the WTO isn’t working efficiently and it must be modernized to prevent unfair trade practices, Lighthizer said at the June 8 meeting in Paris.

Lighthizer’s speech “was quite clear,” Mexican Economy Minister Ildefonso Guajardo said. “They’re interested in a well-functioning and efficient multilateral institution, and obviously it is going to require debate.”

“The U.S. believes there is a need for the system,” Argentina’s Foreign Minister Susana Malcorra said. “Of course there are concerns, but we as member states share those concerns and have views on what to work on and what to improve,” Malcorra said after the Paris meeting.

“We should keep all the things at the core [of the WTO] that have been so useful to all of us—the trade rules that have provided stability and prosperity to all our nations for decades now—and look at things that can be modernized in that structure and that system,” Canadian International Trade Minister Franois-Philippe Champagne said.

Prospects for December Ministerial

The Trump Administration said it would “make the utmost efforts” to ensure the WTO’s 11th ministerial conference (MC11) is “successful,” though USTR did not specify what exactly would constitute a success.

“Ambassador Lighthizer has been clear that he wants a successful Ministerial Meeting for Argentina, and to that end, he is fully engaged with WTO members to focus on achievable outcomes,” USTR spokeswoman Emily Davis said.

The statement belied the growing concern among WTO members that the U.S. isn’t earnestly engaged in ministerial negotiations and is expected to oppose a multilateral outcome at the biennial meeting of the WTO’s highest decision-making body.

The U.S. delegation in Geneva recently told WTO members that there hasn’t been “significant progress” on advancing any sort of MC11 deal, and there is no consensus on any of the WTO’s negotiating areas.

WTO trade officials readily acknowledge that prospects for a deal-making at MC11 are uncertain and a likely outcome for the December ministerial could simply be a work program for future negotiating goals.

“It is difficult to know where we are and what we are going to achieve” at MC11, WTO Director-General Roberto Azevedo told Bloomberg BNA. “The whole point of this conversation is that we need to accelerate and identify things that are doable before the end of the year.”

Members plan in October to hold another “mini-ministerial” meeting in Morocco to establish the ambition level of what is doable at MC11.

Public Stockholding

India’s top trade minister, Nirmala Sitharaman, told Bloomberg BNA that an agreement on public stockholding programs for food security purposes “is a commitment” that the WTO “will have to deliver” at MC11.

WTO members in 2013 agreed that before the end of 2017 they would update the organization’s 1986-1988 pricing benchmark for calculating trade-distorting measures related to agricultural subsidies.

The issue languished for years because developed WTO members such as the U.S. and European Union are reluctant to sanction higher levels of trade-distorting agricultural subsidies.

Last month the EU said that any progress on the public stockholding issue should “go hand in hand” with an agreement to cut members’ farm subsidies.

To contact the reporter on this story: Bryce Baschuk in Geneva at correspondents@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

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