James Bacchus
As the Trump administration imposes a barrage of illegal and unprecedented tariffs on an ever-increasing number of imported products, the rest of the world is showing that it can continue trading despite these tariffs and without the United States. Other countries are lowering trade barriers with each other by concluding new bilateral and plurilateral trade agreements, and exporters are reconfiguring supply chains to route around American protectionism. Regardless of whether the United States remains indispensable to the global economy, international trade continues—and increasingly so—without the United States.
At the same time, these countries should not be doing what they have mostly been doing: forging new trading arrangements outside the World Trade Organization (WTO). Although the temptation to go outside the WTO legal framework is understandable, the better course would be for the other 165 WTO members to redouble their efforts toward trade liberalization within the institution while pursuing a different approach. That approach should be WTO-based plurilateralism that can build up to multilateralism, which is precisely how, over decades, the original General Agreement on Tariffs and Trade (GATT) evolved into the WTO.
For this approach to succeed, WTO members must move on from their continued insistence on decision-making by consensus, without waiting any longer for the United States. Consensus and American engagement at the WTO are ideal, but plurilateral agreements offer an opportunity to address unfinished business and negotiate rules that meet the demands of the 21st-century economy, while also leaving the door open for other countries to join if they are willing to be bound by them.
The 165 other WTO members must also stand together to defend their rights under the WTO treaty. Although the singular actions of the United States have, at least for now, reduced the Appellate Body to a paper tribunal, that does not mean other WTO members have no recourse to stand up to the Trump administration’s bullying and hold the US accountable under WTO dispute settlement.
I explore these issues and expand on these brief comments in my upcoming policy analysis for Cato, “World Trade Without the US,” which will be published on Thursday.
