US Government is putting the World Trade System at risk by blocking the WTO

The President of The Federation of German Industries (BDI), Dieter Kempf, has warned against a targeted weakening of the World Trade Organization (WTO). “The US government's trade agenda calls for reform of the WTO, but in practice Washington is undermining international trade law.” Most recently, the USA prevented the overdue appointment of WTO appeals judges. This threatens to paralyse the dispute settlement system.

“With its reckless blocking of the WTO dispute settlement system, questionable tariff threats and so-called protective tariffs, the US government is taking the rule-based, multilateral trading system to the brink,” warned Kempf. The orderly settlement of disputes lies right at the heart of the WTO system and ensures compliance and legal enforcement among the 164 equal member states. “Instead of multilateral problem solving based on common rules, the return of the law of the strongest threatens to cause unpredictable consequences for world trade,” said the BDI President. Only a strong dispute settlement process and the legal enforcement of the WTO system will ensure that all members continue to play by the same rules in future.

As a plaintiff, the United States of America uses the WTO dispute settlement process more than almost any other country. The USA has so far filed 117 complaints to the World Trade Organization, the European Union 97, and China 15.

“The WTO must not be exploited. The World Trade Organization must remain the key regulatory framework for world trade,” said Kempf, calling on the German Federal Government and the EU Commission to act vigorously. “The USA itself, as well as key countries such as China and India, must instead help the EU to reform the WTO, to bring its rules and processes up to date,” commented the BDI President. Better monitoring and greater transparency of trade rules are necessary today, as well as new rules for internationally active state-owned enterprises and measures against previously unforeseen state subsidies. Kempf is convinced that a reformed WTO is the right place to solve the problem of global steel overcapacity.