Trading

Setting the Record Straight on the World Trade Organization (WTO) and the United States – uschamber.com

CLAIM: The WTO was created in 1995 to manage the global economy, and in doing so has undermined U.S. sovereignty and drawn economic policymaking authority away from nation-states.

FACT: The WTO isn’t managing the world economy — or the U.S. economy. “Americans are not directly subject to WTO decisions,” according to President Trump’s 2017 Trade Policy Agenda. Its agreements are reached by consensus, meaning the U.S. and every other member state has a veto at all times.

As for the WTO’s dispute settlement system, the United States has been a big beneficiary, winning about 90%of the completed cases it has filed and all 20 completed cases brought against China. When other countries bring a dispute against the United States, an adverse ruling “does not automatically lead to a change in U.S. law or practice,” the aforementioned Trump Administration report states.

CLAIM: The WTO has sent American production overseas and cost American jobs.

FACT: U.S. real industrial output rose by 50% between 1995 and the end of 2019. U.S. private sector employment rose in this period from 97.1 million to 129.3 million — an increase of 32 million net new jobs. U.S. nonfarm real compensation rose over the same period by 32%.

CLAIM: The WTO has done a poor job bringing down trade barriers.

FACT: According to World Bank data, average tariffs around the globe fell from an average of 6.44% in 1995 to 2.59% in 2017. Many non-tariff barriers have been reduced through later WTO agreements addressing issues such as telecommunications, financial services, and trade facilitation. Foreign tariffs and disguised protectionism against
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