Trouble On The Shores Of Lake Geneva

By trying to kill the WTO, Donald Trump could end up saving it

It’s easy to think of President Trump’s trade assault on China as a one-on-one battle fought almost wholly with tariffs between two nations that, for very different reasons, depend heavily on goods and services that cross their borders. The world’s two largest economies have this year alone imposed import taxes on more than $360 billion in annual trade with each other.

That’s left much of the rest of the world looking like bystanders as the accusations about unfair trade practices fly. Yet the biggest long-term impact of the U.S.-China cage match may be felt not in Washington or Beijing, but in Geneva, home to the World Trade Organization.

Trump has long argued that the WTO, the traffic cop for the world’s trading nations, has favoured China unfairly ever since the Asian giant joined the body in 2001. And his bombastic rhetoric that global trade’s rules of the road have allowed policy makers in Beijing to run roughshod over U.S. businesses is as much a gripe with the WTO as it is with China’s government.

If the WTO doesn’t “shape up,” Trump told Bloomberg in an Aug. 30 interview, the U.S. will pull out. His administration has also provoked a more immediate crisis by blocking the appointment of judges to the institution’s appellate body, slowly strangling world trade’s supreme court.