Since the Second World War, the United States has been a driving force in shaping the global trading system. From the General Agreement on Tariffs and Trade (GATT) to the creation of the World Trade Organization (WTO) to the launch of the ill-fated Doha round of trade talks, the United States has nudged and cajoled the major trading nations of the world to come together and solve pressing trade issues.
So it was bracing last week when, in a time of peril for the WTO, the United States was not at the table. Given the strident criticism of the WTO emanating from the Trump administration and its role in both blocking the functioning of the WTO and in sparking trade conflicts, other prominent countries decided it was better not to include America at first. They met on their own and tried to chart a path forward. As sobering as it was to see the United States lose its traditional position of leadership, that issue is really just a distraction. There is nothing particularly unusual about a subset of countries trying to shape a solution before bringing it to all 164 members of the WTO. Nor was there any pretense that a WTO solution could be found that omitted the world’s two largest economies. As Canada’s Trade Diversification Minister said: “We recognize that we are in the process of setting the table for a larger effort, broadening to all members, and that effort must include the United States and China.” There are certainly advantages to setting the agenda and, in the long run, a continued U.S. fall from grace would be costly for American interests. For the moment, however, the key point is that a group of countries representing roughly 40 percent of world GDP saw the urgency of taking action to protect the global trading system.To read the full article, click here.