context: Some analysts argue that China has benefitted from the rules-based system undergirded by the WTO, and others argue that the US uses the system for its own aims against China. Song adopts a more neutral stance, urging caution in the face of Trump administration uncertainty.
Progress at the World Trade Organisation (WTO) has stalled due to US unilateral trade policies and American opposition to the reappointment of a WTO judge to the Appellate Body. Moving forward, China should both be prepared for the US to withdraw or to remain in the WTO, suggests Song Guoyou 宋国友 Fudan University Centre for American Studies deputy director.
Song points out that on one hand, if the US opts to stay, China should actively participate in and advocate for WTO reform, promoting an agenda that addresses common interests. On the other hand, if the US withdraws, China should coordinate with other major economies to minimise damage to WTO, and at the same time negotiate new bilateral and regional trade agreements.
Song believes that Trump’s threat to withdraw should be treated seriously because
- the US has withdrawn from a series of international treaties unexpectedly since Trump took office
- Trump has expressed his discontent with unfair treatment of the US under WTO on multiple occasions
- WTO has no moral or legal authority to prohibit the US' exit
Nevertheless, there are certain burdens that Trump has to overcome before the US can withdraw from WTO, such as getting Congress' approval and prevailing over resistance in his cabinet. Moreover, if ongoing WTO reforms are successful, the US will no longer have excuses to withdraw.