2018-09-21 09:41:00 Fri ET
technology antitrust competition bilateral trade free trade fair trade trade agreement trade surplus trade deficit multilateralism neoliberalism world trade organization regulation public utility current account compliance
Former World Bank and IMF chief advisor Anne Krueger explains why the Trump administration's current tariff tactics undermine the multilateral global trade system. In the post-war era, America has led the way in establishing the troika of economic institutions, the International Monetary Fund (IMF), World Bank, and World Trade Organization (WTO) (formerly known as General Agreement on Tariffs and Trade (GATT)), that collectively form the primary basis of international economic order in place today. Due to the healthy expansion of a multilateral trade system under the WTO, world trade has grown 1.5 times faster than global GDP since World War II.
The WTO 164-member economies commit to supporting an open multilateral trade system with common rules and procedures. These rules achieve for international trade what domestic commercial codes accomplish for contracts and transactions between parties within a given jurisdiction. Under WTO rules, international trade partners are subject to the same national regulations just as domestic firms have the same rights in regional courts. Governments cannot discriminate against other WTO members, so trade benefits for one trade partner must apply to all other trade partners under WTO rules.
It is essential and paramount to ensure that trade partners receive fair regulatory and judicial treatment from WTO member-state governments, and the principle of non-discrimination has been a core tenet of the global trade system.
Under this WTO framework, the Trump administration now uses national-security concerns to justify hefty tariffs on steel-and-aluminum imports from China, Canada, Europe, Mexico, and Japan etc. Whether these tariffs would help reduce U.S. trade deficits remains complex and mysterious.
The Trump discriminatory tariffs undermine the WTO economic order and thereby induce China and some other countries to seek commensurate reparation through the WTO dispute-settlement mechanism.
These countries may retaliate against Trump tariffs and in turn would exacerbate the current global trade quagmire.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2023-12-07 07:22:00 Thursday ET
Economic policy incrementalism for better fiscal and monetary policy coordination Traditionally, fiscal and monetary policies were made incrementally. In
2019-09-19 15:30:00 Thursday ET
U.S. yield curve inversion can be a sign but not a root cause of the next economic recession. Treasury yield curve inversion helps predict each of the U.S.
2023-09-28 08:26:00 Thursday ET
Daron Acemoglu and James Robinson show a constant economic tussle between society and the state in the hot pursuit of liberty. Daron Acemoglu and James R
2018-08-07 07:33:00 Tuesday ET
President Trump sounds smart when he comes up with a fresh plan to retire $15 trillion national debt. This plan entails taxing American consumers and produc
2018-06-03 07:35:00 Sunday ET
Several recent events explain why Trump may undermine multilateral world order. First, Trump withdraws the U.S. from the 12-nation Trans-Pacific Partnership
2019-01-01 03:34:48 Tuesday ET
American allies assist AT&T and Verizon in implementing 5G telecommunication technology in the U.S. as such allies ban the use of HuaWei 5G telecom equi