Trade

EU Moves to Effectively Replace WTO Crippled By Trump

JM Ashby
Written by JM Ashby

Trump hasn't just waged a trade war against our traditional allies in Europe, he has also effectively crippled the deliberately body that was created by the United States to resolve international trade conflicts.

While the World Trade Organization (WTO) isn't perfect, it has ruled in favor of the United States in 80 percent of cases, but the other 20 percent where it has ruled against us is too high for Trump.

The Trump regime has crippled the WTO be refusing to appoint any new judges to the organization's appellate court leaving it without the number of judges required by law to actually issue any new rulings. Trump's obstruction led the European Union to conclude that they should create an alternative system to replace WTO enforcement and they moved another step closer to doing that this morning.

This is aimed directly at the United States.

The European Parliament gave the go-ahead on Friday in Brussels for negotiations with EU governments to upgrade the bloc’s legislation on enforcing international trade rules. The draft law would let the EU impose penalties against countries that illegally restrict commerce and simultaneously block the World Trade Organization’s dispute-settlement process.

EU Trade Commissioner Phil Hogan proposed the measure in December and won the backing of the bloc’s member countries in April. A final agreement requires the national governments to iron out differences with the 27-nation Parliament, which wants to go further than Hogan recommended by allowing EU penalties to cover not just goods trade but also services and intellectual property rights.

The EU is rushing to upgrade its trade arsenal after U.S. President Donald Trump’s administration sidelined the WTO’s key appellate body at the end of last year. The body ceased to be able to handle new cases because a U.S. veto of any appointments to the panel left it without the minimum three members required for verdicts.

Like many other legacies of the Trump era, this one that will persist when he's gone. The United States has historically led the world in both setting and abiding by international trade rules, but Trump threw half a century of progress out the window and declared war on the world.

The European Union may not even necessarily need an alternative system of enforcement after a hypothetical Biden administration ends Trump's trade war and lifts the blockade of the WTO, but that is only obvious from our perspective as Democrats living in America. From a European and global perspective and perhaps even our own, the United States is only ever another four years away from electing another nincompoop. A temporary respite from our insanity is not something our trading partners can rely on. No one can rest easy knowing the States have finally turned a page because we might turn another.

Trump has made it obvious to the world that American voters are not reliable partners. Personally, I find it at least a little bit comforting in a round-about way that other countries are creating their own systems and setting their own standards. That will limit the power of the next Trump wannabe who tries to abuse the systems we created.

  • muselet

    Good for the EU. The world needs a functional WTO, even if the US isn’t a meaningful part of it.

    The rest of the world will not trust the US for a very long time after Donald Trump leaves office, and rightly so.

    –alopecia