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Why it is not profitable for the United States to leave the World Trade Organization?

The criticism of the WTO by the United States is very often insufficiently reasoned.

When the World Trade Organization was created in the mid-1990s, the US Senate actively supported its creation. But now the US and the WTO are in conflict. The President of the United States, Donald Trump, even said that membership in the WTO is not profitable for the United States, writes Bloomberg.

“The World Trade Organization just used the United States to their advantage,” Donald Trump said at a press conference.

Trump has threatened to leave the WTO unless the organization gives the US more trade freedom.

Some representatives of the United States Republican and Democratic Party also agree that the United States is better off leaving the World Trade Organization.

However, criticism of the organization by the US authorities is often insufficiently reasoned.

For example, Trump’s comments on the WTO most likely reflect his “general hostility to imports.”

President Trump sees imports as damaging to American income.

Trump also complained that other countries set higher tariffs on American products, and the WTO is responsible for this state of affairs, according to Trump.

But the difference between the US and other countries’ trade tariffs is often exaggerated: the average US tariff is about the same as that of Canada or the European Union.

Some US officials believe the World Trade Organization is overly protective of foreign investors and hurts the United States’ Buy American strategy. However, such “accusations” are exaggerated.

According to some US officials, the US should negotiate new profitable trade deals outside of WTO membership.

The Americans must begin to build a “new network of reliable allies and partners to counter Chinese economic imperialism.” In general, this is a good idea, but its implementation does not contradict the membership in the WTO.

On the contrary, cooperation with the World Trade Organization opens up opportunities for the conclusion of many trade deals.

However, the WTO also requires some reforms. In particular, there is a need to speed up the process of settling trade disputes and improve legal remedies.

The US could also make more use of the mechanisms that the WTO already has, for example by filing more complaints against “Chinese trade abuse”. None of these positive steps require the US to leave the organization, but quite the opposite, it would be more profitable for the United States to cooperate with the WTO, Bloomberg concludes.

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Muzaffar Ahmad Noori Bajwa
Muzaffar Ahmad Noori Bajwa
Editor-in-chief, The Eastern Herald. Counter terrorism, diplomacy, Middle East affairs, Russian affairs and International policy expert.

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