The Practical Side of Trump’s Trade Policy

Yesterday, John Bolton had an op‐​ed in the WSJ criticizing the dispute settlement process used at the World Trade Organization. He argued that this process “is often criticized for failing to deter violations of the WTO’s substantive trade provisions,” and it also exceeds its mandate “by imposing new obligations on one or more parties, particularly against American interests.” Somehow, then, in his view, the process is both ineffective AND infringes on sovereignty, an impressive achievement. My colleague Dan Ikenson systematically dismantles the piece here.


Talking about international dispute procedures in the abstract can be a little hard to follow sometimes, but something happened earlier this week that helps illustrate the value of the WTO dispute process. This is from a Reuters report on an outbreak of bird flu in Tennessee which has led to some U.S. trading partners imposing import restrictions on U.S. products:

Top U.S. chicken and egg companies ramped up procedures to protect birds from avian flu on Monday, a day after the federal government confirmed the nation’s first case of the virus at a commercial operation in more than a year.


The U.S. Department of Agriculture said on Sunday that a farm in southern Tennessee that is a supplier to Tyson Foods Inc. had been infected with the virus. All 73,500 birds there were killed by the disease, known as avian influenza (AI), or have since been suffocated with foam to prevent its spread.


…


Already, U.S. trading partners, including South Korea and Japan, have restricted shipments of U.S. poultry because of the infection in Tennessee.

There are more details on the import restrictions here.


While some of Trump’s trade policy staff obsesses over trade deficits or the number of Americans working in manufacturing, the practical side of trade policy these days is often about regulatory trade barriers such as these, which are said to be about food safety but are sometimes just disguised protectionism. In this case, our trading partners definitely have a reason to be concerned. But are the actions they take in response based on sound science, or is the disease outbreak being used as an excuse for protectionism? The restrictions may be justified now, but will they be removed when the threat is gone? That’s one of the core functions of trade agreements: Detailed rules and a neutral dispute process to decide whether regulatory measures are legitimate or are disguised protectionism. In fact, the United States filed a WTO complaint against India in 2012 on these same issues, after India imposed restrictions that were purportedly to address concerns about outbreaks of bird flu.


There will continue to be pushback against the Trump administration’s misguided view of trade deficits and economics more generally. But there is also the practical question of how this administration will approach day‐​to‐​day trade concerns like this one. In the past, the staff at the U.S. Trade Representative’s Office has shown great skill in using the dispute process at the WTO to address these issues. Hopefully the Trump administration will let them continue to do their work.