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Experts Say Trump's Hostility To The WTO Could Cripple It

Sep 20, 2018
Originally published on September 24, 2018 4:28 pm
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ARI SHAPIRO, HOST:

President Trump has attacked organizations such as NATO and the European Union for what he sees as taking advantage of America. Now he's targeting the World Trade Organization, known as the WTO. And the president's approach could cripple the group in the next 18 months. NPR's Frank Langfitt is in Geneva, home of the WTO. Hi, Frank.

FRANK LANGFITT, BYLINE: Hey, Ari.

SHAPIRO: First remind people what the WTO does and what President Trump is now doing.

LANGFITT: Well, among other things, the WTO kind of acts as a global court of justice for trade disputes. It keeps countries following the agreed upon rules to, one thing, prevent trade wars, things like that. Of course they need judges to handle appeals of these cases, and the U.S. is unilaterally blocking the appointment of new judges. It's the first time this has happened in the history of the WTO. Bottom line is the WTO is running out of judges and in the future might not be able to handle trade disputes.

SHAPIRO: Why is the U.S. taking this line?

LANGFITT: Well, the U.S. complains that the judges overstep their bounds, making rulings that interfere with U.S. domestic law, basically telling the U.S. what it should do inside of America's borders. Now, other administrations have complained about the WTO. The Obama and Bush administrations have had their differences. But President Trump with his emphasis on "America First" - this is the first time the U.S. has taken such a dramatic step and basically tried to starve the WTO of judges.

SHAPIRO: What has the reaction been from the World Trade Organization?

LANGFITT: Well, you know, the WTO admits that there's room for reform. The EU is actually - European Union is working on a reform plan. But I was talking to Keith Rockwell today. He's the spokesman for the WTO. He says there's really a sense of crisis, and he walked me through the math.

KEITH ROCKWELL: Over the course of the last couple of years, we have gone from seven jurists, and we're now down to three. By December of next year, we'll be down to one.

LANGFITT: And they won't be able to handle appeals anymore, basically be crippled.

SHAPIRO: Most people don't know a lot about international trade rules. What are the risks here?

LANGFITT: No (laughter).

SHAPIRO: What's at stake?

LANGFITT: Well, you know, as part of the bigger picture - is President Trump has slapped huge tariffs of course on China, appears to be provoking a trade war. He has opposed other trade pacts, particularly the one - the Trans-Pacific Partnership. And analysts say all of this makes trade much more unstable and actually can hurt - backfire on the U.S. I was talking to Meredith Crowley. She's with the University of Cambridge. And here's how she explained it.

MEREDITH CROWLEY: The big threat is foreign markets will close to American firms. We'll basically face high tariffs and taxes to sell our things there. And this will basically - essentially it's like throwing sand into a wheel.

SHAPIRO: How do you expect this to end?

LANGFITT: Well, we don't know. President Trump doesn't like organizations like the WTO. He wants to do more one-on-one trade deals. He thinks they're better for the U.S. But there's a sense here in Geneva and elsewhere in Europe that he really in the long run actually wants to damage the WTO. And we'll see how it turns out.

SHAPIRO: Frank, as long as we have you on the line, I want to ask about another big story that's coming out of Europe today. In Salzburg, Austria, Theresa May has been trying to sell her plan for Britain's future trading relationship with other European leaders. How did that turn out?

LANGFITT: Badly, Ari, as was expected. You know, Prime Minister May keeps pushing a deal to stay inside the EU single market for goods - trading goods - and avoid a hard border across the island of Ireland. But the EU, as it has said for a long time - no way. This undermines the whole idea of the single market and membership in the European Union. That said, next month when the European Council is meeting, this is going to be a moment of truth in Brexit negotiations. And frankly, May and the United Kingdom are running out of time.

SHAPIRO: That's NPR's Frank Langfitt in Geneva. Thanks, Frank.

LANGFITT: Happy to do it, Ari. Transcript provided by NPR, Copyright NPR.