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Stacked Deck: US Bullies WTO, TPP Revisited

Proving once again, not that any more proof was need, the World Trade Organization is nothing but a political organization of fiefdoms out to protect their own interests, not really do anything to foster trade.

Today, the US is accused of bullying the rest of the organization by refusing to accept the reappointment of a South Korean judge who the US fears may rule in favor of China in trade disputes.

The Financial Times reports US Accused of Undermining WTO.

The US has been accused of being a bully and undermining the World Trade Organisation's dispute system after vetoing the reappointment of a South Korean judge. The EU and legal scholars have warned that the veto threatens the impartiality of the global trade court.

US opposition comes at a time when many believe Washington has been losing faith in the WTO and is preparing for a big fight with China over how and when economies can deploy anti-dumping defences against cheap imports.

The US told fellow WTO members last week that it could not support the reappointment of Seung Wha Chang, a respected South Korean expert in international trade law whose four-year term on the seven-member resident appellate body ends on Tuesday.

Washington cited the body's decisions in three cases involving the US and one other as examples of what it said was a pattern of WTO panels overreaching and issuing "abstract" decisions.

The US intervention comes ahead of what is likely to be an important period for the appellate body. Among the issues it is expected to decide are whether China is entitled to "market economy" status within the WTO, an important designation that would help Beijing fight back against anti-dumping cases, such as those being mounted against Chinese steel imports on both sides of the Atlantic.

Beijing claims it should be awarded the status automatically in December, the 15th anniversary of the country joining the WTO. The US and some opponents in Europe insist that the text of China's accession agreement is more ambiguous and that eventually the issue will have to be decided by the appellate body.

Greg Shaffer, an expert in WTO law at the University of California Irvine, said the US's opposition to the reappointment of Mr Chang risked injecting politics into what ought to be a purely legal process.

It also, he said, was "making the US look like a bully, and not an upholder of rule of law principles".

"The US response and example will have ripple effects around the world," Prof Shaffer said. "Undermining the independence of the WTO appellate body will affect the entire rules-based system to resolve trade disputes."

Stacked Deck

If the US can unilaterally stack the deck, what does that say about the organization?

It's not just the US. The WTO is nothing but a collective group of fiefdoms each seeking to protect their interests first, then the interests of their region.

Meanwhile, not a damn thing is done about blatant US agricultural tariffs especially sugar. The Trans-Pacific trade agreement (not net passed) would not fix such problems.

It could actually be helpful if the WTO collapsed. What's really needed is free trade, not "fair trade" where "fair" is 100% in the eyes of the beholder.

Candidates Compared on Trade

If Donald Trump wins, he will be accused of wrecking trade, but as I pointed out on May 26, Suspicion Sets In; Obama Sounds Like Trump; We're All Bernie Sanders Now!.

Bernie Sanders, Donald Trump, and President Obama are on one mind when it comes to tariffs on China.

The Obama administration says Chinese is dumping corrosion-resistant steel and imposed an anti-dumping duty of 210 percent and an anti-subsidy duty of between 39 percent and up to 241 percent.


While Secretary of State, Hillary Clinton spoke out in favor of the Trans-Pacific-Partnership 45 times, calling it the "gold standard in trade agreements to open free, transparent, fair trade."

Hillary now says TPP will kill American jobs. For details, please see Hillary Clinton, Dead Rats, Toilet Paper Politics

When it comes to protectionism, there appears to be little difference between Bernie Sanders, Donald Trump, Hillary Clinton, and President Obama.

I am against TPP not because it will kill American jobs, but rather because it's a massive and secret bill, which few have seen, and scant details released. We do know it continues to protect the US sugar lobby.

We also know TPP contains a bunch of global warming nonsense, and the agreement allows corporations to sue governments in what is sure to become corporate handouts at taxpayer expense.

I discussed lawsuits in Obama's Trans-Pacific Partnership Fiasco vs. Mish's Proposed Free Trade Alternative; How Will TPP Function in Practice?

What about Sugar and Steel?

The US chamber of commerce reported "[US Tariffs] raised the cost of sugar in the US and 30,000 jobs out of Chicago have gone because sugar manufacturers have left the United States to go to Canada so that they can import sugar," said, Catherine Mellor, calling on American leaders to show courage in tackling sugar subsidies and tariffs in the Trans-Pacific Partnership negotiations.

Bottom line: We protect sugar farming jobs (when climate dictates sugar is better grown elsewhere), at the expense of every company who uses sugar as an input. Loss of jobs coupled with use of high fructose corn syrup in damn near everything was an unfortunate result.

The same happens with steel. US auto manufacturers do not benefit from steel tariffs, nor do consumers who pay higher prices.

For further discussion, please see Legacy Skills and Capital; Sugar and Steel; Turning TPP to TP.

Canadian Slush

In Canada, the agricultural minister announced his dairy and poultry farmers will be compensated for "any losses" caused by TPP. Guess who will pay for that?

For details on Canadian slush, please see TPP and Free Trade Canadian Style.

What's It All About?

  1. The Washington Post described TPP as a "giant free trade deal".
  2. The White House Blog says Environmental Advocates Point to the Trans-Pacific Partnership as a Historic Opportunity to Protect Our Oceans, Forests, and Wildlife.

Which is closer?

Here's a hint: The Huffington Post reports the TTP document contains 29 chapters of which only 5 are about trade.

No thanks.


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