
Chapter 3:
Evolution of Economic Thought
Canada proposes alliance to buffer World Trade Organization from Trump's protectionism
September 11, 2018

The World Trade Organization headquarters in Geneva.
The Canadian government is poised to release a blueprint to reform the World Trade Organization as countries adjust to a newly protectionist America that has threatened to leave the organization entirely. Canadian trade officials who finished a draft of the reform proposal are seeking to “restore confidence in the multilateral trading system” and discourage mercantilism by restoring the proper functioning of the WTO dispute settlement system and improving its ability to monitor international trade practices. Over the past year, this same mercantilism approach has caused Trump to aggressively negotiate with Canada, seeking to rebalance NAFTA out of “self-interest”, criticizing Canada’s dairy policies and imposing national security tariffs on imports of Canadian steel and aluminum. For the current conflict between U.S. and Canada, WTO is facing a systemic crisis due to Trump’s refusal to appoint or reappoint members to the appellate body, which has the final say in upholding, modifying, or reversing WTO rulings. If U.S. maintains this position, the body will be paralyzed by 2019 due to the lack of three panelists required to sign off on rulings.

Glossary