Anne Krueger explains why the Trump administration's current tariff tactics undermine the multilateral global trade system.

Fiona Sydney

2018-09-21 09:41:00 Fri ET

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.

Blog+More

Innovative investment theory and practice

Olivia London

2022-05-15 10:29:00 Sunday ET

Innovative investment theory and practice

Innovative investment theory and practice Corporate investment can be in the form of real tangible investment or intangible investment. The former conce

+See More

Mike Pompeo switches his critical role from CIA Director to State Secretary in a secret visit to North Korea.

Peter Prince

2018-04-13 14:42:00 Friday ET

Mike Pompeo switches his critical role from CIA Director to State Secretary in a secret visit to North Korea.

Mike Pompeo switches his critical role from CIA Director to State Secretary in a secret visit to North Korea with no regime change as the North Korean dicta

+See More

Ramit Sethi suggests that it is important to invest in long-term gains instead of paying attention to daily dips and trends.

John Fourier

2018-10-30 10:41:00 Tuesday ET

Ramit Sethi suggests that it is important to invest in long-term gains instead of paying attention to daily dips and trends.

Personal finance author Ramit Sethi suggests that it is important to invest in long-term gains instead of paying attention to daily dips and trends. It

+See More

Federal Reserve raises the interest rate to the target range of 2.25% to 2.5% as of December 2018.

Charlene Vos

2018-12-22 14:38:00 Saturday ET

Federal Reserve raises the interest rate to the target range of 2.25% to 2.5% as of December 2018.

Federal Reserve raises the interest rate to the target range of 2.25% to 2.5% as of December 2018. Fed Chair Jerome Powell highlights the dovish interest ra

+See More

Ford and Baidu team up to test autonomous cars in China.

Jonah Whanau

2018-11-01 08:36:00 Thursday ET

Ford and Baidu team up to test autonomous cars in China.

Ford and Baidu team up to test autonomous cars in China. For the next few years, Ford and Baidu plan to collaborate on the car design and user acceptance te

+See More

Donald Trump and Kim Jong Un meet, talk, and shake hands in the historic U.S.-North-Korean peace summit in Singapore.

Daphne Basel

2018-06-06 09:39:00 Wednesday ET

Donald Trump and Kim Jong Un meet, talk, and shake hands in the historic U.S.-North-Korean peace summit in Singapore.

Donald Trump and Kim Jong Un meet, talk, and shake hands in the historic peace summit between America and North Korea in Singapore. At the start of the bila

+See More