Republican presidential nominee Donald Trump threatened to pull the U.S. out of the World Trade Organization (WTO) if membership in the global trade body interferes with his plan to impose penalties on companies that move American production offshore.
The bold warning came as Trump was discussing his plan to impose taxes or tariffs on U.S. companies that move manufacturing abroad in an interview Sunday with NBC’s “Meet the Press.”
The interviewer, Chuck Todd, suggested such a policy could run afoul of the WTO, the Geneva-based trade club that includes most nations around the world and adjudicates trade disputes over agreed-upon tariffs and rules.
“It doesn’t matter,” Trump responded. “Then we’re going to renegotiate or we’re going to pull out. These trade deals are a disaster, Chuck. World Trade Organization is a disaster.”
The WTO threat appeared to mark a new level of attack on the global trading system that has evolved in the post-war era. Trump previously has reserved most of his criticism for trade agreements among a handful of countries, such as the North American Free Trade Agreement, or Nafta, which established free trade among the U.S., Canada and Mexico. He has also attacked the Trans-Pacific Partnership, or TPP, the yet-to-be-enacted deal the Obama administration negotiated with 11 Asia-Pacific countries.
For years, politicians have accused China of breaking the rules of the WTO and getting away with it, and some have said the U.S. shouldn’t have agreed to the deal that let Beijing into the WTO.
But withdrawing from the WTO could void the deals the U.S. has on low tariffs with countries around the world, potentially exposing U.S. exports to steep levies from a host of trading partners.
The U.S. would also lose the leverage that comes with challenging other WTO members over breaking trade rules and winning compensation that can be significant, even if delayed.
Hillary Clinton, the presumptive Democratic presidential nominee, has rejected the TPP in current form but says Trump’s broader attacks on international commerce could lead to a dangerous trade war.
Source: The Wall Street Journal
