Will the WTO crack under the pressure of US duties?
The imposition of duties by the administration of US President Donald Trump disappointed the US allies and business around the world. But the worst of these actions remains the World Trade Organization (WTO).
The WTO is in an awkward situation - to arbitrate the dispute between some of its strongest members. At the center of the battle is the question of the US claim that the imposition of duties on steel and aluminum imports is a necessary step for maintaining national security.
Allies like Canada, Mexico, and the European Union (EU) filled complains against the US tariffs in the WTO, saying their metals are not a threat to US national security. These countries responded by imposing their own duties, which made Donald Trump's administration complain to the WTO.
Now the trading group is in a complicated situation - to make a decision that can lead to new problems, regardless of intentions.
Any WTO decision may result in a denial of membership in the organization, in which establishment in 1995 the US played a major role.
A decision against the Trump administration is likely to force the United States to leave the WTO. If the trade group supports the country's idea of protecting national security, it could undermine the authority of the WTO and encourage other countries to start citing their own national security interests to ignore the inconvenient rules on topics such as intellectual property, standards and subsidies for agriculture.
If the United States rewrites the rules of the WTO system to be able to act with the justification for protecting national security, it is very likely that every other country in the world will begin to act in this way.
In mid-August, the Trump administration once again highlighted the protection of national security when the US president decided to double the rate of duty on steel and aluminum imported from Turkey at a time when the Oriental country was experiencing a financial crisis.
In a statement, the US Secretary of Trade Wilbur Ross said that metal exports to the United States had not diminished to "levels sufficient to remove the threat to national security", and that there is a need for increased customs duties on Turkish metals imports.
Roberto Azevedo, the current Director-General of the WTO, said the group would rule on the issue of protecting the US national security and the challenges posed by the duties imposed on countries around the world. He added that any decision by the WTO could lead to negative consequences for the group.
Posted from my blog with SteemPress : http://financeandmarkets.com/will-the-wto-crack-under-the-pressure-of-us-duties/
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