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TWN
Info Service on WTO and Trade Issues (Sep25/01) Trade:
US trade wars, sanctions & the WTO's failure Geneva, 1 Sep (D. Ravi Kanth) -- As the Trump administration appears to have escalated its unilateral trade, economic, and military actions against multiple countries, members of the World Trade Organization (WTO) are confronting an unsettling reality: the guardian of the multilateral trading system seems to be broken, incapable of preventing predatory tariffs and economic sanctions, according to people familiar with the development. On 31 August, United States President Donald Trump threatened to escalate what analysts describe as an illegal and unprovoked campaign against Iran. "We are going to hit them hard," he told Fox News. Analysts warn that the escalating conflict has already driven up oil prices and could further destabilize the global economy. In a post on his Truth Social platform on 31 August, President Trump declared: "Iran is officially a Failed Nation. IT IS DEAD! They have no Navy, they have no Air Force, they have no currency, they are not paying their soldiers or police, Inflation is at 300%, and their leadership is in total disarray and incapable of properly representing the country." Blaming the US media, President Trump said that "the only thing they (Iran) have is FAKE NEWS from the USA, a willingness to kill their protesters (now over 100,000 people dead. They must be tried for war crimes against humanity!), and a good line of "BULLSHIT"." Despite the WTO pursuing internal reforms ostensibly aimed at undermining the foundational trade rules that underpin the multilateral trading system - an effort widely seen as catering to the United States and other powerful nations - there is little hope that countries will find relief from the allegedly flawed changes, said a trade envoy who requested anonymity. The underlying logic of WTO reform appears to be to forge a double-edged sword: on one side, downgrading the multilateral trading system to a proverbial plurilateral club or casino; on the other side, relegating developing and the poorest nations to their historical underdeveloped status by widening disparities across all sectors, the trade envoy added. Against this backdrop, it remains uncertain how the WTO can address any unilateral actions in the near term, the trade envoy said. TRADE WAR The escalating trade war launched by the US against Canada, following the breakdown of bilateral negotiations early last week, suggests that Washington's unilateral trade demands may extend well beyond commerce into other areas of its choosing - including culture and beyond, according to media reports. Canadian Prime Minister Mark Carney stated that his country was being attacked through unilateral US tariff and trade actions, and that Ottawa avoided "a bad deal" that would have mortgaged its sovereignty to a President who wanted Canada annexed as the 51st US state, as per his public address available on YouTube. On 27 August, the President Trump announced the renaming of "Lake Ontario" to "Lake America," arguing that "because of the security and investment provided by the United States, this freshwater system (Lake Ontario) would not be open for shipping, recreation, and responsible use to the same extent as it is today." President Trump justified the renaming of the lake by noting that Washington "has invested nearly $4 billion in protecting the Great Lakes freshwater ecosystem in the last decade, while Canada has invested far less in similar initiatives over the same period." Earlier, the US also raised concerns about Canadian rules that promote French-language movies and shows online, effectively targeting French content in audiovisual programs popular in Canada. However, in an interview on Canada's CBC network on 26 August, US Trade Representative Ambassador Jamieson Greer said that US demands regarding Canadian content on US streaming platforms had not been a deal-breaker, according to a New York Times analysis on 30 August. Despite intense negotiations conducted under what appeared to be coercive conditions, the talks collapsed over various US demands to dictate Canadian steel tariffs on other countries. The Canadian Prime Minister said that "the attitude, at the negotiating table, [was] that Canada is a subsidiary of the United States," insisting that Ottawa would never accept a supplicant role. In response, Canada sought concessions on its autos, electric vehicles, and metal products, while rejecting the US President's demand to revive the Keystone XL pipeline. After Canada held its ground, talks broke down on 24 August, and President Trump threatened to raise tariffs on all cars, trucks, car parts, and steel from Canada to 50 percent, effective 1 January 2027. Clearly, the aggressive postures of the Trump administration, on display for the past eighteen months, have met with resistance from Canada - the third country to stand up to the US, after China and Brazil. ECONOMIC SANCTIONS Recent so-called "D-Day" economic sanctions against Iran, under which several countries face penalties for their trade ties with Tehran, signal a new wave of US global economic coercion and repression, said several analysts. On 19 August, invoking a Second World War analogy, President Trump announced a so-called "economic D- Day" operation against Iran. US Treasury Secretary Scott Bessent, who used the term "D-Day", described it as "economic warfare and isolation on an unprecedented scale," adding that other countries "are either with us or against us." When asked whether sanctions would apply to China, given that several Chinese companies trade with Iran, Bessent said that he would want China to join "the program" of sanctions against Iran. According to an editorial in China's Global Times, the "economic D-Day" operation is less a new US offensive against Iran than another attempt by Washington to cut losses quickly and extricate itself from the Middle Eastern quagmire. The Chinese daily argued that while economic sanctions can concentrate pressure on a single country, it is difficult to confine the costs to that country alone. War cannot solve problems, and sanctions only exacerbate them, it maintained. The Global Times said "the so-called "either with us or against us" rhetoric, in a sense, exposes Washington's strategic predicament: it "can no longer handle this mess on its own"." However, the "D-Day" sanctions appear to have garnered little support from US allies and other nations. G20 MEETING According to media reports, the US Treasury Secretary faces a major test of his economic diplomacy this week as he presses finance leaders from the G20 major economies to reduce global trade imbalances, boost growth, and sever business ties with Iran, while trying to calm concerns over rising US debt and bond yields. The G20 finance ministers' meeting, scheduled for 31 August and 1 September in North Carolina, takes place amid the ongoing illegal and unprovoked US-Israeli campaign against Iran, the Trump administration's tariff and trade war against Canada, and global financial turmoil. Bessent has warned that countries face secondary US sanctions if they continue buying Iranian oil or facilitating other transactions with Tehran. On 28 August, he imposed restrictions on a bank based in G20 member Egypt due to its alleged links with Iran through branches in the United Arab Emirates. In short, the US - which has successively upended global trade rules since imposing "fair and reciprocal" tariffs last year, later replaced by tariffs under Section 122 of the US Trade Act of 1974 and Section 301of the same Act on grounds of forced labour - has so far faced no collective action, either at the WTO or outside it. Nevertheless, a small group of industrialized countries is set to intensify efforts later this month to fundamentally alter the foundational rules of the Marrakesh Agreement, arguing that this would allow them to forge plurilateral trade agreements. Such pacts could exclude the majority of countries from decision-making, reducing them to mere recipients of outcomes. Worse still, these outcomes would likely entrench the historic divide between the major industrialized nations - long beneficiaries of centuries of brutal colonization - and the vast majority of developing and poorest countries. +
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