Trump administration hits out at WTO before crunch meeting

The Trump administration has stepped up its attack on the World Trade Organization ahead of a crunch meeting in March, stating that the body's core principle of reciprocity in trade is dead, Report informs referring to Financial Times.

The US declared that the "era had passed" for the long-standing most-favoured nation (MFN) principle, which requires countries not to discriminate between their trading partners, in a memo circulated to WTO diplomats and seen by the Financial Times. "The MFN principle... was designed for an era of deepening convergence among trading partners," the document said. "That expectation was naive, and that era has passed." The memo reflects Donald Trump's unilateralist approach to trade as the WTO enters a critical phase of reform. The trade body is considering allowing coalitions of willing nations to make "plurilateral" trade policy among themselves - something blocked by current requirements for unanimity.

The talks on reform will come to a head at the WTO"s ministerial meeting in the Cameroonian capital of Yaoundé next March. Sam Lowe, trade policy lead at consultancy Flint Global, said the document was "final confirmation" that the US "would rather set tariffs unilaterally with countries on a case-by-case basis." The six-page document lists US grievances against the organisation with what one diplomat called "brutal clarity". It includes thinly veiled attacks on China for racking up massive trade surpluses and India for blocking improvements to WTO decision-making.

However, a second diplomat involved in the WTO reform process welcomed the US contribution. "It is a good statement: constructive in tone and clearly stating what the US thinks of the ongoing reform process. This will help everyone understand better the realities under which we are doing this process," the diplomat added.

In an apparent warning to India and South Africa, which have both repeatedly blocked such reforms, the US said that "if there is no path for members to enter into plurilateral agreements at the WTO, we must acknowledge that the WTO is not a viable forum for negotiating". With China's trade surplus increasing to more than $1 trillion this year, the US attacked the WTO for its repeated failure to address trade imbalances, which it blames on unfair subsidies for the steel and auto industries. "The WTO - its committees, dispute settlement system and negotiating arm - is not able to address these systemic problems," the US delegation wrote.