Trade rhetoric: On U.S.’s WTO pullout
threat (The Hindu)
Mains Paper 2: International Relations
Prelims level: World Trade Organization
Mains level: On U.S.’s WTO pullout threat
- U.S. President Donald Trump opened up another front in the ongoing
global trade war on Wednesday by ramping up rhetoric against the World Trade
- He even threatened to pull the U.S. out of the multilateral trade
organisation if it fails to treat the U.S. fairly and blamed it for allowing
too many countries to claim the status of a “developing country”.
- In a memo to the U.S. Trade Representative last month, Mr. Trump pointed
out that nearly two-thirds of the 164 WTO members classified themselves as
developing countries, and raised the issue of even many rich economies
claiming to be “growing” rather than “grown” economies.
- This time around, in Pennsylvania, the President targeted India and
China in particular for “taking advantage” of the U.S. by classifying
themselves as “developing countries” at the WTO.
Status of a developing country by WTO
- The status of a developing country allows countries to seek partial
exemptions from the WTO’s rules for free and fair trade between countries.
- The status, for instance, allows countries like China and India, with
their special tag, to impose higher tariffs on imports from other countries
and also offer more subsidies to local producers in order to protect their
- Developed countries find this to be unfair on their producers who are
put at a relative disadvantage, but countries like China have argued that
their developing country status is justified given their low per capita
- Mr. Trump’s recent attacks on the WTO would be welcome if they were
truly about creating a global trading arena with lower tariffs and fewer
barriers to trade.
- The “developing country” status, which offers substantial benefits to
countries that want to protect their domestic interests and which most
countries are more than happy to make use of, has indeed skewed global trade
over the years in favour of certain countries.
- But he may be raking up the issue not to further the cause of global
free trade, but simply as a convenient pretext to justify further trade
barriers against China and other countries.
- By pointing fingers at other countries that follow protectionist
policies, Mr. Trump will find it justified to impose retaliatory tariffs
- This will help him bolster his “America First” approach and allow him to
successfully hold on to his support base in America’s manufacturing belt
that has been affected by foreign competition.
- Even if countries like China and India offer to lower their tariffs, Mr.
Trump would not take them up on their offer.
- That is because it would require reciprocation in the way of lowering
U.S. tariffs, which would work against the interests of local American
Q.1) With reference to the Quick Reaction Surface-to-Air Missile (QRSAM),
consider the following statements:
1. It has a strike range of about 1000 km, is capable of killing multiple
aerial targets, tanks and bunkers.
2. The missile has been indigenously developed by Defence Research and
Development Organisation (DRDO).
Which of the statements given above is/are correct?
a) 1 only
b) 2 only
c) 1 and 2 only
d) All the above
Correct Answer: B
Q.1) Trump is not furthering the cause of free global trade with his unfair
attack on the WTO. Comment.