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1. What Happens If the United States Leaves the WTO?

Author:
James Bacchus
Publication Date:
06-2026
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Aresolution before Congress calls for US withdrawal from the World Trade Organization (WTO). Both international law and US law permit withdrawal. The case for withdrawal, however, is misguided and misinformed. Much of what is said and widely believed about the effects of WTO membership on the United States is simply untrue. In fact, American membership in the WTO has been for decades and remains today enormously beneficial economically to US businesses, workers, and consumers. Withdrawal by the United States from the WTO would result in the loss of many of these economic benefits, including those derived from decades of accumulated trade commitments made by the 165 other member countries on thousands of different US goods and services traded within the WTO legal framework; those resulting from the commercial shield of WTO rules forbidding trade discrimination against US exports; and those emanating from the availability to the United States of an impartial, binding, and enforceable system of WTO trade dispute settlement. Moreover, withdrawal by the United States would cede US leadership in the WTO to other leading trading countries, including the second-largest trading country in the world, China. Trade is a win-win economically for all WTO members. WTO membership maximizes the overall economic gains from engaging in trade. The United States should remain in the WTO and help lead it toward needed reforms that will make it more beneficial to all in the modern global economy of the 21st century.
Topic:
Economics, Geopolitics, Trade, and WTO
Political Geography:
North America and United States of America

2. Is the World Trade Organization Still Relevant?

Author:
Alan Wm. Wolff
Publication Date:
12-2024
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
There has been a profound shift in American foreign economic policy. The United States has abandoned promotion of a rules-based open international trading system and no longer supports the World Trade Organization (WTO). The United States and its allies created the current world trading system as an essential part of the liberal world order, a series of rules-based international organizations and agreements to help rebuild the global economy and foster peaceful cooperation after World War II. Today, rising populism, heightened geopolitical tensions, and persistent inequality are threatening this order. Wolff emphasizes that the WTO is still relevant to the liberal international order, and it is in the core interest of the United States and other countries to continue to support that order. But he cautions that the WTO needs major reforms if it is to survive as an effective force governing world trade. WTO members must engage in serious negotiations to find acceptable solutions to shared problems. The resulting agreements can be political commitments or adoption of binding rules. Regressing to a lack of accountability for one’s trade policy measures, however, would be unacceptably damaging.
Topic:
Economic Policy, Trade, WTO, and International Order
Political Geography:
North America and United States of America

3. Unfair Trade or Unfair Protection? The Evolution and Abuse of Section 301

Author:
Scott Lincicome, Inu Manak, and Alfredo Carrillo Obregon
Publication Date:
06-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Section 301 of the Trade Act of 1974 gives the U.S. trade representative (USTR) broad authority to investigate “unfair” foreign trade policies allegedly harming American companies and to impose tariffs or other trade restrictions to achieve the removal of those policies. The statute was a common tool of U.S. trade policy from the 1980s to the 1990s, authorizing the USTR to conduct almost 100 different investigations during that period. Since the World Trade Organization (WTO) was established in 1995, however, the USTR has used Section 301 infrequently and almost exclusively to initiate or implement WTO dispute settlement actions—actions that, per WTO rules, were supposed to supplant the kinds of unilateral trade actions once applied under the law. The Trump administration departed from this long‐​standing U.S. practice and took advantage of Section 301’s flaws to circumvent the WTO and enact unilateral tariffs against multiple U.S. trading partners, imposing significant economic and geopolitical costs along the way. This paper examines the Trump administration’s actions in historical context, evaluates how the law was stretched beyond its intended purpose in direct contravention of the United States’ WTO obligations, and offers practical reforms to prevent future abuse.
Topic:
Economics, Legislation, Trade, Protectionism, and WTO
Political Geography:
North America and United States of America

4. Curbing State-Driven Trade Policies: How to Craft New & Effective Approaches to Counter Distortive Practices

Author:
Wendy Cutler
Publication Date:
07-2020
Content Type:
Policy Brief
Institution:
Asia Society
Abstract:
Much attention has been focused on China’s unfair intellectual property practices and the imbalance in the U.S.-China trade relationship, but equally troubling are large-scale Chinese industrial subsidies, the behavior of state-owned enterprises (SOEs), and in general, the oversized and opaque role of the Chinese state in the economy. While the U.S-China phase one trade deal tackled some important sources of bilateral tension and aimed to boost Chinese purchases of U.S. goods and services, it was silent on industrial subsidies and related matters, leaving them for the next phase of negotiations, the fate of which is now in question. U.S. concerns on these matters are shared by other trading partners including the European Union (EU) and Japan. Yet despite widespread disapproval of such practices, building new global rules to combat subsidies has proven challenging. This is due to several factors, ranging from gridlock at the WTO, differences of views among like-minded countries on the required level of ambition, and uncertainty as to how best to approach the enormous complexities in China’s subsidies and related policies. The Organization for Economic Cooperation and Development (OECD) has sought to unpack this complexity, conducting recent studies of Chinese subsidies in two key sectors: aluminum and semiconductors. Both studies illustrate how Chinese subsidies are not simple cash handouts from the state to protected firms so that they can sell at favorable and distorting prices. The OECD finds subsidies can take various forms, including downstream or upstream help that trickles up or down to the firm that’s intended to benefit. They can take the form of favorable equity or debt purchases or bonds provided at below-market rates. And with interconnected global value chains, subsidies can effectively be granted covertly, intended to benefit one firm that might be several links away along the chain. In China, the problem is compounded by an opaque “party-state” structure that obscures not only the recipients of subsidies, but also the source. According to Mark Wu, a Harvard Law School professor who previously served as the Director for Intellectual Property in the Office of the U.S. Trade Representative, subsidies not only flow directly from government bodies in Beijing, but also indirectly through informal responses to directives — sometimes even left unsaid, but understood — from the Chinese Communist Party. Against this backdrop, the Asia Society Policy Institute (ASPI) convened two roundtables in the fall of 2019 and the spring of 2020 to discuss how best to build a new rules-based infrastructure that might combat such subsidies and prevent trade-distorting results such as unfair competition, market access barriers, and, above all, overcapacity in global markets. Experts from the private sector, think tanks, governments, and academia weighed in with possible solutions, which included: Negotiating new rules in the WTO; Using the WTO dispute settlement system, despite its often-discussed flaws; Forming ad hoc rules-based approaches, where possible, like the U.S-EU-Japan trilateral initiative; Plurilateral negotiations conducted on a sector-by-sector basis; Forming coalitions of like-minded trading partners to establish an alternative model, much in the way that the Trans-Pacific Partnership (TPP) was framed. During the roundtables, most experts agreed that there is no silver bullet that solves the subsidy and related issues on its own. And most agree that, left unaddressed, the problem is likely to deepen. The COVID-19 pandemic might even exacerbate it by leading to more state involvement in economies around the world and making it hard to discipline Beijing’s practices. Recognizing all of these real challenges that the international trade community faces, the roundtables reached the following key conclusions: Transparency on the scope, level, and nature of industrial subsidies is vital; Efforts to publicize the ongoing work in these areas, particularly that being done by the OECD, should accelerate; Turning research into tangible new policies is a key step; and Persuading China to agree to updated rules will be necessary, given that China is a singular contributor to overcapacity.
Topic:
International Trade and Finance, Treaties and Agreements, Trade, Industry, and WTO
Political Geography:
China, Asia, North America, and United States of America

5. Record Number of Americans Say International Trade Is Good for the US Economy

Author:
Brendan Helm, Dina Smeltz, and Alexander Hitch
Publication Date:
10-2019
Content Type:
Special Report
Institution:
Chicago Council on Global Affairs
Abstract:
President Donald Trump has embarked on an ambitious and disruptive trade agenda, driven by his belief that the United States has lost “many billions of dollars” to trading partners and that “trade wars are good, and easy to win.”[1] During his term, the president has escalated trade tensions with China; has renegotiated trade agreements with countries such as Mexico, Canada, and South Korea; and has withdrawn US involvement in trade deals such as the Trans-Pacific Partnership. The 2019 Chicago Council Survey finds that though Republicans and Democrats differ on whether President Trump’s strategy is an effective approach to trade policy, the American public is more likely than ever to say that international trade benefits the United States.
Topic:
International Trade and Finance, Economy, and WTO
Political Geography:
Canada, South Korea, North America, Mexico, Global Focus, and United States of America

6. Trade in Trouble: How the Asia Pacific Can Step Up and Lead Reforms

Author:
Wendy Cutler, Peter Grey, Kim Jong-Hoon, Mari Pangestu, Yoichi Sozuki, and Tu Xinquan
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
The U.S.-China trade dispute has dominated headlines over the past year, disrupting trade and investment flows and increasing uncertainty at a time when the global economy is already facing headwinds. The conflict has left many countries in the Asia Pacific feeling caught in the crossfire seeking to navigate the tensions without alienating either country. While the World Trade Organization (WTO) would ideally help reduce the frictions, it has not been up to the task. The paralysis at the WTO points to a deeper problem: it’s inability to keep up with the pace of change or address the challenges of new developments in advanced technologies and the digital economy. Simply put, the trade regime is in trouble and in need of reform. At this dynamic and uncertain time in trade, the Asia Society Policy Institute (ASPI) convened a group of leading trade experts and former trade officials from across the Asia Pacific, led by ASPI Vice President Wendy Cutler. In this issue paper, the authors examine the major developments in the international trading system, including the U.S.-China trade dispute, FTA activity in the Asia Pacific, and efforts to reform the WTO. In this challenging environment, the authors find that the Asia Pacific is uniquely well-positioned to lead reforms to get the system back on track. This paper is the latest product of the ASPI initiative, “Building a High Standard and Inclusive Asia-Pacific Trade Architecture.” It builds on the work of two previous reports published in March 2017 and January 2018.
Topic:
Economy, Trade Wars, Trade, and WTO
Political Geography:
China, Asia, North America, and United States of America

7. The Drums of Trade War

Author:
Yu Yongding
Publication Date:
04-2018
Content Type:
Policy Brief
Abstract:
With Chinese President Xi Jinping willing to make some concessions to the US, the world may yet avoid a trade war. But the reason Sino-American relations have soured is the Trump administration's worldview, not external balances. BEIJING – Last month, US President Donald Trump’s administration fired the opening salvo in what is quickly shaping up to become a full-blown trade war. While trade friction has long been an issue in the Sino-American relationship, few expected such an escalation, not least because economists widely view trade wars as damaging to all parties. So how did we get to this point, and can we turn back before it’s too late? ...... According to the USTR report, the problem is that the policy tools the Chinese government is using to achieve the goals of Made in China 2025 “are largely unprecedented, as other WTO members do not use them.” Moreover, they “include a wide array of state intervention and support designed to promote the development of Chinese industry in large part by restricting, taking advantage of, discriminating against, or otherwise creating disadvantages for foreign enterprises and their technologies, products, and services.” Yet the report fails to identify those interventions, which is not surprising, given that the State Council has not yet specified the policy tools it will use. And while America’s grievances regarding IPR issues are understandable, they could be addressed through the WTO. The fact that the Trump administration has taken the approach it has suggests that it does not merely want to ensure that China complies with existing rules; it wants to prevent China from catching up to the US technologically. This is obviously not acceptable to China.
Topic:
International Relations, Trade Wars, and WTO
Political Geography:
China, Asia, North America, and United States of America