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Trump denounces China and the WTO

WASHINGTON – President Trump stepped up his attacks on China and the world trade system and threatened on Friday that the US unilaterally revoke the special rules that are granted worldwide to developing-country countries.

On the eve of a new round of trade talks between the US and China in Shanghai, Beijing appears to be under pressure to take new specific measures to buy more US goods and further liberalize the market for foreign companies.

"The WTO is broken when the world is The richest countries claim to be developing countries in order to circumvent WTO rules and receive special treatment. NO MORE !!! "Mr. Trump wrote in a tweet. "Today, I have instructed the US Trade Representative to take action so that the countries stop cheating on the system at the expense of the US!"

A memo signed by Mr Trump on Friday called on his government to look for ways to force the WTO to change immediately, as it handles certain countries. The memo focuses on China, but mentions several other leading economies, including Turkey, Mexico, the United Arab Emirates and Qatar.

The Chinese Embassy did not respond to a request for comment on Friday. China has claimed in the past that it adheres to all WTO rules.

China was admitted to the WTO in 2001

after protracted negotiations, under the widespread expectation that membership of the World Organization would facilitate the transition from a state to a market-oriented economy.

Mr. However, Trump argued that China should not be allowed to benefit from the status of a developing country, including export subsidies and procedural advantages for WTO disputes. Other industrialized countries have voiced similar concerns.

Under current WTO rules, each member can choose to declare himself as a "developing country" rather than an "industrialized country", allowing him to bypass some of the market-opening measures that have been adopted by the WTO, or others delay.

The White House memo states that if the normally slow WTO does not change these long-standing rules in the coming months, the US will no longer treat countries like China as evolving.

Such an amendment would have no direct impact on trade relations with other countries and would have no impact on tariffs, quotas or cross-border trade, in contrast to other dramatic Trump actions of the past two years.

Clete Willems, who worked at the White House on Trade and WTO until April, said a change in the rules would only affect "trivia" in the short term.

The action is of great symbolic significance, as the recent expression of government displeasure towards the Geneva Authority in particular, the treatment of China since its accession in 2001, expresses negotiations in which China and other nations seek agreement on these talks urge them to grant them special privileges.

"This will really affect those negotiations where groups of countries say they should not take the same level of commitment as the US or the European Union," Willems said. "They say they do not have to cut subsidies so much or so fast."

As part of President Trump's efforts to rebalance trade, he has imposed tariffs on almost every country in the world. Josh Zumbrun from WSJ explains where we stand with our largest trading partners. Photo composite: Laura Kammerman

A government official said the main point of the announcement was "to look at the ongoing negotiations … through the new lens" and not aiming to change existing trade agreements. The repeated aggravation that Trump and his advisers have made, including the US Trade Representative Robert Lighthizer, who commented on the WTO established a quarter of a century ago, and their promise to change it.

Mr. Trump has at times threatened to pull the US out of the 164-member WTO that the US was instrumental in founding and complains that it treats Americans unfairly. Although there is no indication that he actually intends to go that far, he has taken various measures that could hamper it and soon render it ineffective.

The Trump Administration has blocked the appointment of judges to the WTO Commercial Court in protest If the US does not reverse this attitude, the ability of the Geneva Board to settle commercial disputes between members – one of its main responsibilities – will effectively end in December, if The term of office of the two remaining judges expires. A major complaint of Messrs. Trump and Lighthizer is that China has been able to grow into an export hit in the last 18 years, without forcing China to curb subsidies and state controls. Producers have an advantage in world markets.

"When the WTO came and joined China … they became a rocket ship," Trump said Friday. "So you know, it's a very unfair situation that has happened to the World Trade Organization." ,

"Failure to comply with WTO rules, including the likely disregard of future rules, can no longer be left unchecked," the memo said. "China illustrates this point most dramatically."

The White House memo states that economic indicators believe China's claim to be a developing country. Various indicators are cited, including China's "explosive growth", which has given it the second largest gross domestic product in the world, and it is found that China accounts for nearly 13% of total global goods exports.

Beijing has repeatedly rejected US complaints in recent months.

"We are not afraid of our international responsibilities and we are ready to undertake commitments in the WTO that are consistent with our own level of economic development and capabilities," said Gao Feng, spokesman for the Chinese Ministry of Commerce, said in April. "China is the largest developing country in the world."

While many of Mr Trump's attacks on long-term trade action by veterans of trade policy have been criticized, some of his complaints about the WTO – including the issue of developing countries – have received bipartisan support.

"It is to be taken seriously that large and well-developed countries like China and Korea should not do this," said Jennifer Hillman, a former WTO judge appointed by the US under President George W. Bush and now Professor of Law at Georgetown University. "The Trump government is trying to pull much stronger lines."

However, it is unclear whether the WTO Panel, which works consensus among its members and has not taken any major reforms since its inception, can respond to the latest US action.

"The US is demanding something that the WTO can not deliver because it has not been able to agree on anything important for 18 years," said Derek Scissors, a China expert at the American Enterprise Institute. "To influence talks between the US and China, the WTO would have to be much more changeable, or the US would have to threaten to leave the organization altogether."

Write to Jacob M. Schlesinger at [email protected] and Alex Leary at [email protected]

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