Team picks to partly shape Trump’s impact on global trade, says Chinese think tank chief

(Yicai) Nov. 8 — The impact of Donald Trump’s re-election as US president on the international trade landscape will depend in part on the personnel choices he makes for his trade team, particularly for the key role of US trade representative, according to the head of a Chinese think tank.

During his first administration, which ran from January 2017 to January 2021, Trump repeatedly threatened to pull the United States out of the Geneva-based World Trade Organization.

“Although the final decision does not rest solely on Trump, his performance in his first term shows a clear negative attitude towards international organizations,” Tu Xinquan, director of the China Institute for WTO Studies at the University of International Business and Economics, told Yicai.

This stems from Trump’s belief that these organizations limit the United States’ freedom of action, Tu said, noting that the possibility of the country leaving the WTO is actually “relatively small.”

Robert Lighthizer, Trump’s former trade representative, hoped to establish a WTO that operates mainly within a small circle of Western countries, thereby dividing and excluding some members, including China and Russia, Tu noted, but the design of the WTO system made that difficult to achieve this goal.

US allies also hope the world’s largest economy will stay in the WTO, Tu said, as the formation of smaller multilateral trading systems will still require the WTO framework.

Trump’s choice as trade representative this time will be particularly important, Tu noted.

Strategic value

The WTO’s strategic value to the US is no longer primarily based on its trade relationship with China, Tu said, and while the US may worry that if it leaves the WTO, China may take over its leadership role, this is not the most central consideration.

“More importantly, the WTO remains the most effective platform for the United States to manage its trade relations with over 160 other partners,” Tu said. “If the US were to leave the WTO, it would face the enormous challenge of rebuilding trade relations with these countries.

“Establishing new bilateral trade frameworks would not only be time-consuming and labor-intensive, but also unlikely to achieve the effectiveness of the existing multilateral mechanism,” he said.

“Therefore, staying within the WTO framework allows the United States to maintain its freedom of action while enjoying the benefits of the multilateral trading system,” he added. “This is particularly important.”

‘Widespread concern’

There is “widespread concern” in the WTO about Trump’s return to the White House, Tu pointed out.

“During Trump’s first term, many members, including those from Europe, tried to communicate and coordinate with the United States, but with little success,” he said. “So the WTO now has to prepare for the worst-case scenario.”

Another looming issue is the governance of the WTO. Director-General Ngozi Okonjo-Iweala’s four-year term expires next August, and if the US opposes her reappointment, the WTO will have to find a candidate acceptable to the US, Tu noted.

Much uncertainty surrounds whether the other WTO members would be willing to accept a candidate chosen by the United States, he said.

Editor: Tom Littening