Trump Assails WTO "Straitjacket", Attempts Pocket Veto of Entire Organization

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Trump says he will use the WTO to press charges against other nations yet he will ignore claims other nations make.

Please consider Trump Rejects WTO's 'Straitjacket' of Trade Obligations.

A report drawn up by the U.S. Trade Representative outlining the White House’s trade agenda for 2019 said the United States will continue to use the Switzerland-based WTO to challenge what it sees as unfair practices.

However, “the United States remains an independent nation, and our trade policy will be made here – not in Geneva. We will not allow the WTO Appellate Body and dispute settlement system to force the United States into a straitjacket of obligations to which we never agreed,” the report said.

The United States has imposed tariffs on $250 billion worth of Chinese imports to press its demands for changes to what Washington sees as China’s unfair policies on intellectual property protections, technology transfers, industrial subsidies and domestic market access.

China has challenged the Trump administration’s tariffs in the WTO, arguing that they violate its agreed rules. The case is likely to be ultimately decided by the WTO’s Appellate Body, the world’s top trade court.

Pocket Veto

The Trump administration has blocked the appointment of a number of WTO appellate judges. There are now only three, and terms for two of them end in December.

WTO rules mandate that at least three appellate judges hear a trade related case. Rules also require consensus on appointments.

Starting December, there may be no way to bring an international trade case to the body specifically created to hear them.

Trump does not want an adverse ruling on his ridiculous "national security" claims. One sure way to guard against such rulings is to prevent cases from being heard.

Effectively, blocking appointments amounts to a Pocket Veto of the entire WTO.

Notes

  1. A reader objected to my use of the term "pocket veto". It was poetic license. A pocket veto is when a president sits on bill until it is too late for it to be dealt with in the current session. In this case, Trump sits on appointees until there aren't enough of them to rule on law, effectively vetoing any actions he doesn't want.
  2. Regarding MOUs: Lightthizer was correct, Trump was wrong. The Financial Times commented today "Trump had confused a real estate MoU with what it means in trade parlance."

Mike "Mish" Shedlock

Comments
No. 1-4
Mish
Mish

Editor

MOU - Trump was wrong.

From the FT "Last week Mr Lighthizer publicly corrected Mr Trump’s definition of a memorandum of understanding, which the president said was not a binding trade deal. Mr Trump had confused a real estate MoU with what it means in trade parlance."

Latkes
Latkes

Peter Zeihan has long claimed that Trump is trying to dismantle the existing world order, which would eventually fall apart anyway. I am starting to think he may be right.

The other option is that Trump is a skilled clown.

Mish
Mish

Editor

"TBF, calling it MoU and meaning contract is pretty stupid."

It's what it is commonly called. The average person may not know it is legally binding, but Trump should. And even if he didn't, he should have accepted Lightthizer's explanation without making himself look sillier.

Then again, not much seems to be legally binding to Trump, so why does it matter whether it's a contract or not?

wootendw
wootendw

As peace talks with NK may be ending, the benefits of the Trump presidency (right-to-try and termination of Ocare mandate) are over.

Time to get the depession started so we can get rid of Trump.