President Donald Trump has said he will pull out of the World Trade Organisation (WTO) if it doesn’t treat the US better, targeting a cornerstone of the international trading system.
“If they don’t shape up, I would withdraw from the WTO,” Trump said on Thursday in an Oval Office interview with Bloomberg News. Trump said the agreement establishing the body was “the single worst trade deal ever made”.
A US withdrawal from the WTO potentially would be far more significant for the global economy than even Trump’s growing trade war with China, undermining the post-World War II system that the US helped build.
Trump said last month that the US was at a big disadvantage from being treated “very badly” by the WTO for many years and that the Geneva-based body needed to “change their ways”.
US Trade Representative Robert Lighthizer has said allowing China into the WTO in 2001 was a mistake. He has long called for the US to take a more aggressive approach to the WTO, arguing that it was incapable of dealing with a non-market economy such as China.
Lighthizer has accused the WTO dispute-settlement system of interfering with US sovereignty, particularly on anti-dumping cases. The US has been blocking the appointment of judges to the WTO’s appeals body, raising the possibility that it could cease to function in the coming years.
‘We rarely won a lawsuit’
In the Oval Office interview, Trump said at the WTO “we rarely won a lawsuit except for last year”.
“In the last year, we’re starting to win a lot,” he added. “You know why? Because they know if we don’t, I’m out of there.”
For all of his complaints about the WTO, Trump’s administration has continued to file cases against other members. Earlier this week it launched a case against Russian duties on US products that it argues are illegal.
Countries that bring complaints to the WTO tend to prevail and defendants in trade disputes lose.
But WTO data also shows that the US does slightly better than the WTO average in both cases it brings and that are brought against it, said Simon Lester, a trade analyst at the Cato Institute, a Washington policy group that favours more open international trade.
Of the 54 cases brought by the US over the life of the WTO, Washington won at least one finding in its favour in 49, or 91%, Lester said. Of the 80 cases brought against it, a WTO panel had ruled against it in at least one aspect in 69 cases, or 86% of the time.
The Trump administration has taken his complaints a step further by arguing that the WTO’s dispute settlement system is broken and in need of a major overhaul.
The EU has been leading an effort to propose reforms to try and defuse the conflict. Officials from the EU and Japan visited Washington last week to discuss potential changes as well as joint efforts to take on China at the WTO. But change at the organisation may not come easy.
“Now it’s true that the threat by the US to withdraw is really serious, that will concentrate minds, and then things could happen,” Alan Winters, a professor of economics at the University of Sussex, said in a Bloomberg interview. “But the WTO is in for a very large shock if it actually has to agree a new set of rules.”
Since World War II, successive US presidents have led efforts to establish and strengthen global trading rules, arguing that they would bring stability to the world economy.
The WTO was created in 1994 as part of a US-led effort by major economies to create a forum for resolving trade disputes.
Tunisia’s Parliament Approves New 2019 Budget With No New Taxes
Tunisia’s parliament has approved a 2019 budget imposing no new taxes on individuals and easing the burden on some sectors after years of tax hikes that have stoked public anger and at times violent protests.
The budget, adopted by 113 votes out of 217, projected a fall in the deficit to 3.9 percent of the gross domestic product next year, from about 5 percent expected this year.
Prime minister Youssef Chahed said earlier this year that 2018 would be the last difficult year for Tunisians, but his government remains under pressure from the international monetary fund to trim the budget deficit by cutting subsidies and reforming the bloated public sector.
Budget analysts expect Tunisia’s economy to grow by 3.1 percent next year, up from an estimated 2.6 percent this year.
The government will cut taxes in half next year to thirteen and a half percent for companies operating in sectors including technology, textiles, engineering, and pharmaceuticals.
Taxes on bank profits were raised from 35 to 40 percent.
Experts Support Trade Multilateralism
Several experts from different countries have voiced their support for multilateralism in trade. They particularly pointed to china’s actions to promote cooperation based on win-win results.
Sanusha Naidu, a foreign policy analyst based in South Africa, said the recent G-20 summit has told the world the significance of multilateralism in trade which has played an active role for the global economy.
Saudi Arabia To Invest 100m Euros In Africa’s Sahel Region
Saudi Arabia has pledged 100 million euros to support priority investment programs in Africa’s Sahel region.
Saudi’s state minister for African affairs Ahmed Qattan made the announcement at a donors meeting for the five-member Sahel group, held in the Mauritanian capital Nouakchott. The other countries making up the Sahel group are Burkina Faso, Chad, Mali and Niger.
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