{"id":2081,"date":"2019-08-16T17:20:26","date_gmt":"2019-08-16T11:50:26","guid":{"rendered":"https:\/\/www.classiciasacademy.com\/blog\/?p=2081"},"modified":"2019-08-19T13:07:16","modified_gmt":"2019-08-19T07:37:16","slug":"trade-rhetoric-on-u-s-s-wto-pullout-threat","status":"publish","type":"post","link":"https:\/\/www.classiciasacademy.com\/blog\/trade-rhetoric-on-u-s-s-wto-pullout-threat\/","title":{"rendered":"Trade rhetoric: On U.S.&#8217;s WTO pullout threat"},"content":{"rendered":"\n<p><strong>Context: U.S President Donald Trump threats repeatedly to\ndismember U.S. from WTO<\/strong><\/p>\n\n\n\n<ul><li>In the pretext of U.S-China trade war, President Donald\nTrump urges WTO to rethink the status of \u2018developing country\u2019 given to some\ncountries.<\/li><li>President Trump said that countries like China and\nIndia have taken advantage of their \u2018developing\u2019 status at the WTO.<\/li><li>Previously, while addressing the United States Trade\nRepresentative (USTR) President Trump raised this concern and asked USTR to\nconvince WTO about US concerns.<\/li><\/ul>\n\n\n\n<p><strong>World Trade Organization (WTO)<\/strong><\/p>\n\n\n\n<ul><li>World Trade Organization was established in 1995 and\nreplaced the General Agreement of Trade and Treaties by providing an\ninstitutional set up for regulating international trade.<\/li><li>WTO offers a regulatory framework to negotiate\ninternational trade agreements and it aims to provide a free, smooth and\npredictable flow of trade in goods, services, and intellectual property.<\/li><li>WTO reviews National Trade Policies and offers a level\nplaying field by providing assistance to developing least developed and\nlow-income countries.<\/li><\/ul>\n\n\n\n<p><strong>What actually is a Developing Country and what does this\nstatus entail?<\/strong><\/p>\n\n\n\n<ul><li>The WTO itself does confer the status of \u2018developing\u2019\nor \u2018developed\u2019 country to any of its member states. The member countries\nannounce themselves as such and the announcement is subject to challenge by\nother countries. However, the status of \u2018least developed country\u2019 is assigned\nby the United Nations.<\/li><li>Two third of all 164 member states have the status of\n\u2018developing\u2019 countries. The status gives the power to a developed country to\nseek a limited immunity from WTO rules. <\/li><li>To protect their interest the countries with\n\u2018developing\u2019 status can impose high import tariffs and are also allowed to\noffer subsidies to the domestic producers.<\/li><li>The exemptions, in the form of assistance by the WTO,\nare seen as an impediment to their interest by the developed countries. <\/li><\/ul>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.classiciasacademy.com\/blog\/wp-content\/uploads\/2019\/08\/Trade-rhetoric-On-US-WTO-pullout-threat.jpg\" alt=\"\" class=\"wp-image-2082\" width=\"428\" height=\"337\" srcset=\"https:\/\/www.classiciasacademy.com\/blog\/wp-content\/uploads\/2019\/08\/Trade-rhetoric-On-US-WTO-pullout-threat.jpg 459w, https:\/\/www.classiciasacademy.com\/blog\/wp-content\/uploads\/2019\/08\/Trade-rhetoric-On-US-WTO-pullout-threat-300x236.jpg 300w\" sizes=\"(max-width: 428px) 100vw, 428px\" \/><\/figure><\/div>\n\n\n\n<p><strong>The remedies:<\/strong><\/p>\n\n\n\n<p>In case of unfair competition causing impairment to a\ndomestic industry, the WTO offers remedies by granting a temporary exemption\nfrom WTO rules. The remedies are classified as follows:<\/p>\n\n\n\n<p><strong>Anti Dumping Measures: <\/strong><\/p>\n\n\n\n<ul><li>Dumping takes places when the price of a product in the\nexported country is less than the price in the exporting country. The price at\nwhich the product is sold in the exported marked it called \u2018dumped price\u2019. The\ndifference between the price in the exporting and exported country is called\n\u2018dumping margin\u2019. The process of dumping is an example of price discrimination.<\/li><li>The products at the dumped price hold a competitive\nadvantage. This unfair advantage can injure the industry in the exported\ncountry. <\/li><li>The member countries are allowed to take anti-dumping\nduty measures to prevent the domestic industry from any injury. However, the\nextent of such measure is determined by the dumping margin. To get the \u2018fair\u2019\ntrade price, the dumping margin is added to the dumped price.<\/li><\/ul>\n\n\n\n<p><strong>Subsidies and special \u201ccountervailing\u201d duties to offset the\nsubsidies:<\/strong><\/p>\n\n\n\n<ul><li>Government subsidies can give excessive protection to\nthe domestic industries which can act as a discouraging tool to restrict\nforeign imports. Similarly, subsidy on an export product can injure the\ndomestic industry of the importing country. <\/li><li>Thus, WTO rules prohibit subsidies on export products\nas well as subsidies which are directed to the use of domestic over imported\nproducts. <\/li><li>Additionally, a member country can impose\n\u2018countervailing duties\u2019 on the subsidized imported product if it threatens to\ninjure the domestic industry of the product, even if it is not prohibited by\nthe WTO rules.<\/li><li>Subsidies play a significant role in developing\neconomies. Those least developed and developing countries which are having the\nper capita GNP of $1000 are exempted from the rules of prohibited export\nsubsidies. <\/li><li>If the exports of a developing country are facing\ncountervailing duties investigations, they get preferential treatment.<\/li><\/ul>\n\n\n\n<p><strong>WTO: Issues and Challenges<\/strong><\/p>\n\n\n\n<ul><li>The unilateral and countermeasures by some member\ncountries are posing challenges to international trade. The appellate body of\nWTO\u2019s dispute setting mechanism is facing an impasse in the selection of its\nmembers. <\/li><li>India supports the mechanism to address the concerns of\ndeveloping and least developed countries and is a strong supporter of\nmultilateral international trade.<\/li><li>The ongoing U.S-China trade war is challenging the\norganization not only on the grounds of its status of \u2018developing country\u2019 but\nalso as the role of the organization in the bilateral trade conflict.<\/li><\/ul>\n\n\n\n<p><strong>Decoding the Trump threat:<\/strong><\/p>\n\n\n\n<ul><li>US President Donald Trump\u2019s threat to dismember United\nstates from the WTO should be seen as a pretext to justify the trade barrier\nimposed on China by the USA. Therefore, the comments imply that WTO is advised\nto not to step in the ongoing trade war.<\/li><li>The imposition of trade barriers and taking overly\nprotective measures for the domestic industries area the reflection of Donald\nTrump\u2019s \u2018America First\u2019 policy as America\u2019s manufacturing industry has been\nbadly affected by the open competition.<\/li><\/ul>\n\n\n\n<p><strong>Conclusion:<\/strong><\/p>\n\n\n\n<ul><li>The WTO is facing existential challenges in its role\nand viability. The ongoing trade war between the U.S and China is paralyzing\nthe organization with a risk of rendering the organization completely\ndysfunctional.<\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>Context: U.S President Donald Trump threats repeatedly to dismember U.S. from WTO In the pretext of U.S-China trade war, President Donald Trump urges WTO to <a class=\"mh-excerpt-more\" href=\"https:\/\/www.classiciasacademy.com\/blog\/trade-rhetoric-on-u-s-s-wto-pullout-threat\/\" title=\"Trade rhetoric: On U.S.&#8217;s WTO pullout threat\">    [read more]<\/a><\/p>\n<\/div>","protected":false},"author":1,"featured_media":2092,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[15,170],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.9 - 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