The Multilateral Trading System: The U.S Should Stop Undermining Global Practice
By Alan Collins Mpewo
It is not in doubt that the United States of America (US) has is always doing their best to stabilize global economy through various measures for selfish gains. Indeed, the US was among the spearhead as of what has popularly in recent times to be known as the Multilateral Trading System that has wide reception globally. This game after the second world that had seen an increase in various shortfalls especially during and shortly after the Cold war with the Soviets. The inception of this system lead to a finality of the General Arrangement on Tariffs and Trade. The Multilateral Trading System also saw the birth of the Uruguay Round sometime in 1980. Because of the growing conflict in the economies of scale between the competing blocs of the West and the Eastern globe there was need to set up formal rules to follow during international trade and business. Because of this, the United States was one of the founding members of the World trade organization and consequently part of the formulation committee over the World trade organization rules that would later bind all existing partners States at the time and those that would later in the near future adopt and assent to the World trade organization. Countless achievements have been since achieved by the World Trade Organization due to the recognizable leadership over the United States of America. It therefore goes without saying that the United States of America has made its solid contribution to the growth and periodic stabilization of the world’s economy.
Most important under the World Trade Organization rules was and still remains the dispute resolution mechanisms that have constantly been explored by the various parties whenever conflicts arise. The United States of America has without a doubt being on the forefront of always making sure that no more devastating consequences arise which would greatly affect majority of the global stakeholders in dangerously unimaginable levels. It should therefore be understood That’s that the United States of America has made various contributions as aforementioned herein, it has also in equal measures benefitted from the Multilateral Trading System. It is therefore safe to state that the system has been important in elevating various economies globally. The role played by the United States of America remains pivotal given that it is the world’s leading economy and ranks among the top three investment Nations in the world. Understanding that comes with major implications on how it exercises its dominance and authority in the various circles to which it trades and has power.
It is not bad for any Nation to come up with policies that seek to put it first ahead of other global key players’ interests. The United States of America in 2017 also came up with a major slogan and policy formulation along that line of “America first.” However, while it is a noble thing to do, friction and antagonism has since ruptured between the United States of America’s internal policies and the aspirations of other global actors under the Multilateral Trading System. The U.S has constantly deviated from the very ideas to which it was a founding state. Its trade protectionist policies have rather been hurting other trade stakeholders by closing the windows to trade information and active participation on the American soil. From commencing with ideas of globalization, the Multilateral Trading System has now come into an uncertain trade abyss and now every country does as it wishes under the current structures of global economics.
Among other things that explain the above State of affairs is the constantly unchecked bullying through its hegemonic tendencies that are used to exert unwarranted sanctions and dominance through the guise of “National Security.” In other instances, depending on how it chooses to act or react to other countries, it uses the connotation of “Human Rights.” It has been seen with the Middle East and due to the sanctions and blockages there has been deprivation of equity, debt, and investment in many countries because trade diplomacy ends up as a victim. Additionally, dispute resolution and settlement mechanisms have also been greatly undermined by the United States of America. An example can be cited before 2022 when the United States of America blocked the requisite appointments of the new members to the Appellate body. That alone has paralyzed the various efforts by concerned countries in trying to resolve the different disputes that have been arising on an appeal point of view. The United States of America holds a very important vote and by December 2022, it has refused the outcries from the other members of the World Trade Organization to have the Appellate body constituted for purposes of dispute resolution. While Article 17.2 of the Dispute Settlement Understanding gives the legal reception for the appointment of the members to the Appellate body, enforcement has been stalled by the United States of America. By February 2023, 29 appeals are still pending as a consequence of US’s actions.
Some other practices have included, offending export control, often undermining other members’ legitimate industrial policies, unwarranted sanction measures, economic coercion, disrupting industrial and global supply chains, among many other. Other strong economies and lead actors like China and Mexico and the World Trade Organization have constantly called out the United States of America over the above practices but the endeavors have met unresponsiveness. And therefore, while the U.S’ reaction remains an impediment, if unchecked, the once booming Multilateral Trading System is a route of demise.
Alan Collins Mpewo, is a Law and Senior Research Fellow, Development Watch Centre.