CGD in the News

The Trump Administration’s Trade Strategy Is Dangerously Outdated (The Economist)

March 02, 2017

From the article: 

The second weapon in the arsenal, section 301, is “scarier” than 201, says Kim Elliott, a trade expert. “The grounds for taking action are less well-defined.” It allows the administration to take action against “unfair” trade practices. America used to invoke this section to hit its trade opponents before disputes could be dealt with by the General Agreement on Tariffs and Trade, the WTO’s precursor.

Since the establishment of the WTO in 1995, the section has fallen into disuse, on the understanding that it could be implemented if a WTO ruling went in America’s favour and authorised tariffs on a trading partner that was breaking the rules. The fear, however, is that this week’s mention of section 301 implies the Trump administration might start going outside the global rules of the WTO system. Intensifying the alarm is that an entire section of the strategy document focuses on defending American “national sovereignty over trade policy”. It also emphasises that a WTO ruling against America need not automatically lead to a change in American law or practice.

Read the full article here