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Chapter 17:

Trade Theory, Agreements & Patterns

U.S., China on the agenda, not at the table for WTO reform talks in Ottawa

October 22, 2018

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A delegate sits waiting for the start of the Ministerial Conference of the World Trade Organization in Buenos Aires, Argentina, Monday, Dec. 11, 2017. At first glance, it sounds like another dusty, pinstriped political gathering with a yawn-inducing agenda, dispute resolution systems, the appellate body appointment process and plurilateral solutions to the international trade and development nexus.

The World Trade Organization’s two-day gathering in Ottawa on how best to expedite WTO reform has as much to do with Donald Trump, job-killing global tariff wars and the countless would-be refugees trying to make their way to the United States as it does with plenaries, procurement and intellectual property. “Progress in the WTO has been glacial..glacial progress is not acceptable,” commented Alan Wolff on the U.S. openly blocking appointments of new judges to the WTO Dispute Settlement Body (tactic that threatens to paralyze WTO and prevent it from making decisions). This summit deals with reforming WTO on three main themes: safeguarding and strengthening the dispute settlement system, improving the efficiency and effectiveness of the WTO monitoring function and modernizing trade rules for the 21st century. Reform will be difficult especially as a growing share of the world’s wealth has moved out of the West, “leaving traditional powers with the dilemma: how shall we behave when we no longer dominate?” asked Stephen de Boer, Canada’s ambassador and permanent representative to the WTO. “As the relative might of the traditional powers invariably declines, now is the time when, more than ever, we must set aside the idea that might is right.” Take for example Trump, who has discovered the power of tariffs and aggressively uses it to help extract favourable terms of trade at the bargaining table. Canada and Mexico continue to feel the impact of Trump’s Section 232 tariffs on steel and aluminum imports despite the fact it has been weeks since they forged their successor to NAFTA, the newly christened U.S.-Mexico-Canada Agreement. WTO reform is needed now more than ever before, especially as Trump’s dominant style doesn’t seem to be going away anytime soon.

Glossary

1. World Trade Organization (WTO)

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            The 1995 successor to GATT; the WTO has expanded and strengthened the procedures for reducing trade barriers.

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2. Tariff

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            A tax on an import levied by a nation.

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3. Terms of Trade

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           The rate at which a country's exports are exchanged for its imports.

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4.NAFTA

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           The 1994 free trade agreement among Canada, U.S., and Mexico.

© 2019 Elaine Zhou

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