US-China trade war: How Beijing’s accession to WTO had ‘crippling effects’ on organisation

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The World Trade Organisation (WTO) appears to be in deep trouble. US President Donald Trump had already spent the past three years sparking trade wars and undermining the WTO’s credibility when the coronavirus pandemic struck, hammering economies and sharply reducing trade flows worldwide. To make things even worse, the White House blocked the normal process for settling trade disputes, just when it is needed most.

Because of the concerns about hosting large events while the novel coronavirus is still spreading, the WTO cancelled its biennial ministerial conference scheduled for this month.

Members had to make important decisions and set the agenda for the next two years.

In further disruption, in May, the WTO’s director-general, Roberto Azevedo of Brazil, announced that he would be leaving his post at the end of August, cutting his second term short by a year.

Mr Azevedo’s resignation offers an opportunity for the WTO to reinvent itself, if it can find the right leader, but it is not an easy challenge.

In an exclusive interview with, Dr Stephen Woolcock, former consultant to the European Parliament, shed light on the WTO, revealing why the organisation no longer works in its current form.

In particular, Dr Woolcock argued that China’s accession to the WTO has had critical effects on the institution.

He said: “There are long-standing difficulties and short-term ones in the WTO.

“The long-standing difficulty is that no major progress has been made in the trade rules, which don’t keep up with the international economy.

“The last major trade round was a package put together to get a balance between the WTO members and it was concluded in 1995. The agreement was a few years before that.

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“A lot has happened since then. China has joined the WTO, we have a global supply change. And the internet has flourished.

“The trade rules are lagging behind and that’s partly because of a more fragmented international economy.”

Dr Woolcock added that in the past trade rules were mainly shaped by the US, the EU, Japan and Canada.

However, now, developing countries like China, India and Brazil also want to have a say.

He noted: “So the short story is that they haven’t been able to agree on very much for the past 25 years.

“And the US is getting impatient. This was already happening under President Obama.

“Then, Donald Trump came to power and said ‘I don’t need this multilateralism’.

“His current position is threatening the organisation to undermine the credibility of it.

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“There are different ways of understanding it.”

He continued: “The general understanding is that the US wants to precipitate a crisis so it can change the rules.

“The US doesn’t believe that the rules reflect the US’ interests. But that they benefit China more than anyone else.

“So what Trump is doing is precipitating a crisis in order to shake things up.”

Echoing Dr Woolcock’s claims in a throwback piece for Slate, senior business and economics correspondent Jordan Weissmann further explained how China’s accession to the WTO has been detrimental

China joined the organisation in 2001, under US President Bill Clinton.

Mr Weissmann wrote: “Things have not worked out quite as the 42nd president hoped.

“Normalising trade with China set our rival on a path to becoming the industrial powerhouse the world knows today, decimating American factory towns in the process and upending old assumptions about how trade affects the economy.”

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