Berliner Boersenzeitung - Trump tariffs leave WTO adrift in eye of the storm

Cedric Dupont of the Geneva Graduate Institute, an international relations professor and an expert in trade policies, law and the WTO, told AFP that Trump's moves had put the global trade body centre-stage but powerless to act.

- Why is the WTO being undermined? -

Dupont: "The basic idea of the WTO, to guarantee predictability in world trade, is totally ruined by Donald Trump's attitude. Everyone is starting to wonder what is the point of having invested so much time in trade negotiations.

"It finds itself somewhat in the eye of the storm. The people working at the WTO must feel quite helpless and a little dejected."

- Trump increased tariffs before; is the WTO more ready now? -

Dupont: "The WTO has been weakened for several years. This worsened during the first Trump administration, as the legal settlement of disputes was paralysed because there are not enough judges on the appellate body" -- their appointment being blocked by Washington.

"With no avenues of appeal any more, procedures cannot be followed through, whereas at the start of the first Trump administration, this possibility was always available.

"The WTO is now even more helpless and can no longer resolve trade disputes involving the United States.

"What was strong about the WTO was that it allowed trade retaliation to bring its members back on track. This framework seems to have disappeared completely."

- Does the US tariff offensive sink the multilateral trading system? -

Dupont: "The future of multilateralism in trade is clearly in question. Essentially it will depend not on the United States, but on other countries: to what extent are other countries going to continue working together within the WTO?

"There might be danger for the WTO with an inflationary spiral of customs duties, but maybe it's also an opportunity for other countries to show this is not how problems should be resolved.

"However, if member states do not provide the impetus, the WTO will not move. The organisation itself has very little room for manoeuvre, unlike many UN agencies, such as the World Health Organization (WHO); or the World Bank and the International Monetary Fund."

- Are tariff wars new for the WTO? -

Dupont: "There have always been customs threats. The WTO's goal is to make sure protectionist moves are only temporary. The idea is to push countries to follow the rules -- to maintain the organisation's legitimacy. But it is unclear whether this will actually happen under the second Trump administration."

- Could Trump withdraw from the WTO? -

Dupont: "I would sooner bet on him not doing so because the WTO is not expensive for the United States. The WTO's overall budget is ridiculously low ($227 million in 2024) compared to the WHO ($3.4 billion in 2024).

"Trump might say that it doesn't cost him much -- and besides, he can depart from the rules and do whatever he wants, in some ways.

"The WTO can't hurt him, because the appellate body is paralysed: there's nothing that's going to be legally binding. I think he's pretty comfortable with that."

(L.Kaufmann--BBZ)