Trump Ended WTO Dispute Settlement. Trade Remedies are Needed to Fix it

Abstract

Unhappy with the rulings of the WTO dispute settlement system, which disproportionately targeted US use of trade remedies, the United States ended the entire system in 2019. There are multiple hurdles to agreeing to new terms of trade remedy use and thus potentially restoring some form of binding dispute settlement. First, a change would affect access to policy flexibility by the now large number of users of trade remedies. Second, although China's exports are the overwhelming target of trade remedies, exporters in other countries increasingly find themselves caught up in trade remedy actions linked to China. Third, critical differences posed by China's economic model may call for new rules for trade remedies, but no consensus on those rules has emerged. Even some of the most promising reforms have practical limitations, create additional challenges, or may be politically unviable.

Review of the Role of Trade in the Work of the Fund

“…Not for Redistribution Technical barriers to trade (TBTs) and sanitary and phytosanitary measures (SPS) make up the bulk of this increase. 4 The number of contingent measures such as antidumping, countervailing duties, and safeguards, is below early 2000s levels and has remained steady over the review period, but their coverage of trade reached record levels in 2019 (Bown, 2022). AEs are relatively larger users of NTMs, although their use has increased also in EMs.…”

Retaliation through Temporary Trade Barriers

“…Perhaps of more concern is if TTBs are used to retaliate against foreign government policy rather than to mitigate a specific sectoral injury, as this would run against the grain of multilateral trade cooperation promoted by the WTO. In this context, Bown (2022) describes how TTBs have been disproportionately targeting China.…”