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TWN
Info Service on WTO and Trade Issues (Mar26/03) Geneva, 3 Mar (D. Ravi Kanth) — Amid an escalating war with Iran, the United States on 2 March unveiled its trade priorities for the World Trade Organization’s 14th ministerial conference (MC14), as it did for the WTO’s fourth ministerial conference in Doha, Qatar, in 2001, while simultaneously launching a war on Iraq. It is common knowledge that both meetings were structured to bring the WTO to accomplish the developmental goals in Doha then, and now to have the trade body implement Washington’s new vision in Yaounde, Cameroon beginning from 26 March, according to people familiar with the US stance. In 25 years, the more things changed at the WTO, the more the US strategies remained the same, said a former General Council chair, who asked not to be quoted. Announcing “The President’s 2026 Trade Policy Agenda – The America First Trade Policy” on 2 March, the US Trade Representative (USTR), Ambassador Jamieson Greer, asserted that “the Trump Administration is doubling down on the America First Trade Policy in 2026 to capitalize on the wins from 2025 and keep momentum going for American workers, their families, and the US economy.” The USTR said “President Trump continues to flip the script of forty years of non-reciprocal trade practices and harmful globalist policies, eliminating long-standing barriers and strengthening our workers’ competitiveness.” Elaborating on the report, the USTR announced that Washington “will focus on six core areas in furtherance of the America First Trade Policy: * Continue the Agreement on Reciprocal Trade (ART) Program; * Pursue Robust Enforcement of ARTs, Other Trade Agreements, and United States Trade Laws; * Secure Supply Chains for Critical Minerals and Sectors; * Conduct the Review of the US-Mexico-Canada Agreement (USMCA); * Manage Trade with China for Reciprocity and Balance; and * Promote American Interests in International Fora.” However, the USTR did not mention how the US will adopt these policies following its Supreme Court’s sweeping verdict that reciprocal trade policies based on the International Emergency Economic Powers Act (IEEPA) are illegal. The report gives no indication whether unilateral reciprocal duty collections from companies will be refunded if the courts so decide. Promoting “American Interests in International Fora” appears largely centered on the WTO, particularly the upcoming MC14 in Yaounde. The report points out that the United States will pursue “realistic and practical outcomes of benefit to all trading nations.” Washington has not explained what would constitute such outcomes, as many countries reckon that the US policies are undermining the rules enshrined in the Marrakesh Agreement. For example, for the 95th time, the US blocked a joint proposal from 130 countries to immediately begin the selection process to fill all seven vacancies at the WTO’s Appellate Body, the adjudicating arm of the dispute resolution mechanism. The report notes that “at the upcoming 14th Ministerial Conference (MC14), the United States will be clear-eyed about the limited opportunities for outcomes and reform, but will continue to seek realistic outcomes including permanent extension of the moratorium on customs duties on electronic transmissions.” The report’s silence on the long-pending unresolved issues since 2001, particularly in agriculture, is a telling comment on how Washington secures outcomes like the Trade Facilitation Agreement at MC9 in Bali, Indonesia, in December 2013, while blocking outcomes in other areas, including dismantling the Doha trade negotiations at MC10 in Nairobi, Kenya in December 2015, said people familiar with the US negotiating positions. The report argues that “at MC14 and beyond, the United States will encourage a reorientation of the WTO’s atrophied negotiating function by favouring meaningful plurilateral agreements and urging reassessment of the MFN principle so that trading nations can differentiate among trading partners more effectively in their liberalization commitments. The United States is pleased and encouraged that other countries already have begun to share US views on these issues and recognize the importance of balance and reciprocity.” The other countries referred to include the European Union and the so-called “Friends of the System” group, which includes Norway, Switzerland, Singapore, Australia, New Zealand, and Korea among others. Interestingly, China has opposed any change in the MFN framework, while showing eagerness for more plurilateral negotiations, as it doubles down on the controversial Investment Facilitation for Development Agreement (IFDA) to be incorporated into Annex 4 of the WTO Agreement. On the two-tier dispute settlement system, while the report argues eloquently on reorienting the negotiating function and changing the MFN (most-favored-nation) framework, it remained silent on the “atrophied” enforcement function of the two-tier dispute settlement system. However, it detailed the trade disputes that Washington won while barely commenting on those that it lost. For example, half a dozen disputes where the US has failed to implement the panel rulings figure on the agenda of the regular meetings of the Dispute Settlement Body every month like a proverbial eyesore. Also, while the US has blocked the filling of vacancies at the dysfunctional Appellate Body, it rarely misses an opportunity to approach it to ensure that disputes remain voided, said people familiar with the development. On the Section 301 investigations, the report said that, “In July, USTR will also consider whether to take action in the Section 301 investigation involving the enforcement of US rights in the World Trade Organization (WTO) disputes involving large civil aircraft.” Though this dispute involves the subsidy war between Airbus and Boeing, it is unclear whether the European Union has fully implemented the ruling, said a legal analyst. On China, the report points out that the “United States lost millions of jobs as the result of unfair competition after China acceded to the WTO in 2001. China has been the largest driver of the United States’ trade deficit for over 20 years, and many critical supply chains have been weakened as a result of China’s non-market policies and practices.” This is a recurring refrain from successive US Trade Representatives relying on correlation, not organic data, said an analyst. The report states: “Under the GATT system and its successor, the World Trade Organization (WTO), countries committed to lowering trade barriers in exchange for, theoretically, greater access to each other’s markets. The architects of these systems presupposed that trade liberalization under a common set of rules would yield convergent economic behaviour, expanded consumption abroad, and enhanced export opportunities for all – with few if any downsides or collateral imbalances – and the United States led the way in providing increased access to its market on the basis of these suppositions. Yet, as is now apparent, there was insufficient reciprocity in these multilateral negotiations. While the United States opened its market almost completely, nearly every other country kept its markets closed to US exports. They leveraged a variety of methods to achieve this goal, including high tariffs or various non-tariff barriers – such as regulatory arbitrages established via weak or non- existent enforcement of fundamental standards across labor, environment, and other areas – to promote their own competitiveness at the expense of the United States.” Here again, the evidence suggests that the US is among the biggest beneficiaries of the WTO agreements, particularly on trade in services and the collection of royalties due to stringent intellectual property rules, said an analyst. On MFN, the report states that “because of the centrality of the Most-Favored Nation principle to the GATT and WTO regimes, countries were able to enjoy the benefit of access to the US market at low, bound tariff rates without committing to comparable levels of market openness or discipline. As a result, the United States – maintaining one of the world’s lowest average applied tariff rates of 3.4 percent – increasingly opened its market to imports and was rewarded with limited leverage against persistent tariff and non-tariff barriers maintained by trading partners, exacerbating deficits in goods trade and accelerating the decimation of its manufacturing base.” While the 3.4 percent rate seems low, it conceals Washington’s high tariffs and peaks for goods such as textiles from developing countries. With the advent of unilateral reciprocal trade agreements, the US now imposes the highest average applied tariff across the board, according to several studies by American universities. FULL IMPLEMENTATION The report maintains that “ensuring full implementation of US trade agreements is one of the strategic priorities of the United States.” The USTR, according to the report, “seeks to achieve this goal through a variety of means, including: 1. Invoking US trade laws to promote compliance, including in conjunction with bilateral, plurilateral, and World Trade Organization (WTO) mechanisms when appropriate; 2. Promoting US interests under free trade agreements (FTAs) through work programs, accelerated tariff reductions, and strategic use of dispute settlement mechanisms, including with respect to labor and environmental obligations, such as through the United States-Mexico-Canada Agreement (USMCA) Facility- Specific Rapid Response Labor Mechanism (RRM); 3. Vigorously monitoring and enforcing other bilateral and plurilateral agreements; 4. Asserting US rights through WTO bodies and committees charged with monitoring implementation and surveillance of agreements and disciplines, and use of dispute settlement as appropriate (like counter- notifications on India’s subsidies for rice and wheat in the Committee on Agriculture); and 5. Providing technical assistance to trading partners, especially to developing countries, to ensure that key obligations are implemented on schedule.” It claims that “through the vigorous application of US trade laws and strategic use of international dispute settlement procedures, the United States helps defend US workers, businesses, and farmers against unfair practices.” On the level-playing field, according to the report, Washington will promote “a level playing field characterized by fair, competitive, market-oriented conditions; and opens foreign markets to US goods and services.” Perhaps, the controversial Norwegian facilitator, overseeing WTO reform comprising three proposed issues – changing the practice of consensus-based decision-making, the special and differential treatment architecture, and addressing the level-playing field issues – appears to have an inkling of Washington’s priorities well in advance before framing the three issues. The report states that the “USTR’s Office of Monitoring and Enforcement leads US efforts to defend US interests through investigations and actions under Section 301, in WTO and FTA disputes, and through investigations and actions under the USMCA RRM. These enforcement efforts have resulted in major benefits for US workers, farmers, ranchers, and businesses, as well as workers around the world.” The USTR also indicated that the US will go beyond trade channels to enforce its laws. The report said that the USTR also worked in consultation with other US Government agencies to ensure the most effective use of US trade laws to obtain elimination of foreign government acts, policies, and practices that are unreasonable or discriminatory and burden or restrict US commerce. The reason offered for engaging other US government agencies is because “these problems are not covered by existing WTO and US free trade agreements.” +
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