US challenges WTO for solving trade issues
The United States has strongly criticized the World Trade Organisation (WTO), accusing it of causing global imbalances and claiming it is not the right place to solve problems in the current trading system.
In a statement released late Monday, the US said it has major concerns about the WTO's trading system, which it says has allowed and caused serious and long-term imbalances in the world.These imbalances, partly due to overproduction and concentration of manufacturing, have made many countries depend too much on others and have made it hard for them to build or keep their own industries.
The US listed several issues, mainly pointing to China.It argued that trade imbalances happened because countries gave out subsidies, kept wages low, misused workers and the environment, and used unfair currency policies. This led to big trade deficits for the US, which it wants to fix. The US also said non-market policies in some countries have caused too much production in certain areas. It also pointed out that the WTO does not have the authority to handle security issues or improve supply chain strength.
The US criticized the most-favoured nation (MFN) principle, which requires all countries to treat products the same way in terms of tariffs."The MFN principle is not fit for today's world," it said. "It stops countries from building trade relationships that could help both sides. In short, MFN stops trade liberalization that makes people better off. It pushes countries to use only the WTO and try to do everything the same way."
The US paper said the current system is very different from what was previously expected.It said that the world has become more divided because some countries don't support fair competition, others keep economic systems that go against WTO rules, and many countries keep large trade surpluses, causing economic and political problems in deficit countries. To deal with these issues, trading countries must be allowed to treat different partners in different ways.
The US also criticized the current system for reducing manufacturing capabilities in not just the US but also other developed and developing countries.It called for major changes to the WTO. While not naming India directly, it criticized countries that block plurilateral agreements, where groups of WTO members work on specific areas like investment facilitation.
Finally, the US attacked the special and differential treatment, which gives poor and developing countries more time to meet trade rules and lower commitments.The US wants this to be removed.
