The WTO Director-General’s recent resignation adds a new degree of uncertainty to global commerce in the midst of a global pandemic that is about to cast global and U.S. trade relations into uncharted territory.
This unforeseen situation and the growing global pandemic emerged as the Trump administration’s term enters its last few months. Trump’s response to the pandemic will likely be the focus in the run-up to the presidential election—especially regarding trade relations with China, whom Trump has decided to scapegoat rather than cooperate with in confronting this global health crisis. This China scapegoating seems to be his new election strategy.
The pandemic that involves both public health and economic concerns must be placed squarely within the context of trade conflicts spurred on by Trump’s tariff, trade and investment wars over the last four years. His reliance on export controls (Huawei), his restrictions on foreign direct investment into the U.S. (by China), and his ‘America First’ protectionism have been hallmarks of Trump’s foreign policy since (and even before) coming to office. Protectionism and isolationism did not work in the 1930s.
The WTO’s operations and especially its dispute resolution process have been crippled since last year due to U.S. actions. For example, the U.S. has refused to approve nominees to fill vacancies on the Appellate Body, thus stalling critical trade case decisions by the dispute resolution system.
This policy of attacking the WTO has been central to Trump’s generalized attack on the global system and on its institutions and alliances. Recall Trump’s disparagement of the World Health Organization and of the International Criminal Court as well as his withdrawal from the Trans-Pacific Partnership (TPP), UNESCO and the Paris Climate Accords, among others. In addition, he demanded to renegotiate NAFTA and a host of bilateral trade agreements.
These actions are a call to arms to subvert the larger global order—not just the global trading system. This global order and trading system were the great contributions of American diplomacy in the post-war era. Trump’s actions are a massive attack on the global rule of law that mirrors his domestic attack on the rule of law and on institutions within the U.S.
World trade was already declining because of Trump’s trade wars, and trade has plunged further since the pandemic brought many countries’ economic activity to a standstill. Trade is predicted to plunge even more. Trump’s erratic actions, blaming and bullying have not helped. Indeed, they will only accelerate the further deterioration of global trade and investment and the American economy.
Trump’s policies toward the pandemic and global trade will be his foreign policy’s lasting legacy of the last for years and the central battleground for his reelection.