Photo: FABRICE COFFRINI/AFP/Getty Images
I’ve written about the World Trade Organization (WTO) in the past, most recently criticizing the Biden administration for its cavalier attitude toward WTO dispute resolution decisions that undermined the organization’s authority and credibility. In many ways, Biden did more to weaken the WTO than Trump did in his first term. Unfortunately, now Trump has an opportunity to make up for his policy of benign neglect in his first term by switching to active malevolence. I want to be clear—that has not happened yet, and it might not. But the organization is returning to Congress’s and the administration’s radar screen, which means another opportunity to do it harm.
The opportunity presents itself via a provision of the 1995 Uruguay Round Agreements Act that requires the U.S. Trade Representative to submit a report every five years on the United States’ participation in the WTO, and, following submission of the report, provides a 90-day window for members of Congress to introduce a resolution calling for withdrawal from the WTO. The resolution is privileged, which means its author can get a vote on it 45 days after it is introduced. In a potentially unhappy twist of fate, 2025 turns out to be one of those years, and the required report is due any day now.
The vote on a WTO withdrawal resolution has not had a successful history. It has twice been defeated by large margins and, on other occasions, was never introduced, making a vote unnecessary. The last time (2020) was a bit unusual. The resolution was introduced, but it happened late in the 90-day window, which meant the window closed before the 45 days had elapsed, enabling the Senate Finance Committee to bottle it up without taking action. Sen. Josh Hawley (R-MO) has already announced his intention to introduce a withdrawal resolution this time, and we can be confident it will be done on time and without procedural flaws. That means the potential drama will play out between now and June.
Readers of this column know that I am a confirmed, albeit battered and beaten, institutionalist who believes that multilateral institutions are the glue that holds international comity together. The WTO and its predecessor, the General Agreement on Tariffs and Trade, have created and monitored the world trading system and have worked to enforce the rules members have agreed to over more than 75 years. Their efforts have not been entirely successful, and there is broad agreement the organization is in need of repair. There is increasing difficulty in getting negotiations over the finish line. The Doha Round collapsed years ago, and the last big multilateral success was the Trade Facilitation Agreement 10 years ago. The twelfth ministerial session in 2022 produced modest agreements on fishing and intellectual property rules for vaccines, but both were incomplete, and so far, members have not been able to close on them.
The dispute resolution system is crippled due to the demise of the Appellate Body, for which the United States bears much of the responsibility thanks to the Obama, Trump, and Biden administrations. The panel dispute settlement system continues, but the ability of losers in those cases to “appeal into the void” (i.e., the nonexistent Appellate Body) means, essentially, that the sinners can keep on sinning with impunity. Negotiations to reform the process and restore the Appellate Body in some form have missed repeated self-imposed deadlines, and there is no end in sight.
So, there is a lot of work to be done, and I don’t have high hopes the Trump administration will help do it, although the nomination of Joseph Barloon to be ambassador to the WTO is a sign that, at least for the moment, Trump is not prepared to withdraw from the organization. He is clearly not a fan of multilateral institutions and has already taken the United States out of the Paris Agreement and the World Health Organization. In those cases, he had some specific complaints. He does not yet seem to have any with respect to the WTO, but that day will certainly come, as almost everything he is proposing would violate WTO rules—China has already filed a complaint, and there will be more. When we start losing cases, I expect him to withdraw. Whether he will do it preemptively by supporting a congressional resolution is uncertain.
Either way, it would be an epic mistake, though hardly his first. U.S. withdrawal would cede global leadership to others, most likely China, who are already expanding their soft power initiatives while we are busy destroying ours. Trump might think the rules don’t matter if the United States is outside the tent, but he forgets that being outside means no one else has any obligations to the United States and can retaliate at will. He believes, erroneously, that his tariffs will not hurt Americans, but he cannot say the same about retaliatory tariffs not hurting our exports. These institutions were created to prevent a return to the law of the jungle and to deter new global wars. They have done their job and kept the economic jungle at bay. Encouraging it to grow back will not end well for anybody, including the United States. As my Trade Guys colleague, Scott Miller, has said, if the WTO didn’t exist, we would have to invent it.
William Reinsch is senior adviser for the Economics Program and Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.
