The World Trade Organisation has served as a dreamy utopia for Brexit supporters in recent years. It's talked about like a free market paradise, beckoning us to our post-European Union life when we will be free from the suffocating restrictions of Brussels.
But look across the Atlantic and it's a different story. There, it is the WTO which supposedly suffocates trade and intrudes on national freedom. Donald Trump uses the same rhetoric Brexiters have adopted against the EU about the body which they claim is far superior to it. And now he is going to war against it.
In truth, Brexit and Trump's WTO war are two plots in the same story: the attempt to subvert the multilateral world order. It suggests that once the UK's right-wing culture warriors are done with leaving the EU, they too may turn their guns on the WTO, because it is a barrier to them doing whatever they like.
For some time now, the Trump administration has been blocking nominations to the WTO's appellate body on technical grounds. It's a canny move which essentially cuts the organisation down at the knees. It means that as judges' terms expire, the dispute settlement system at the WTO will grind to a halt.
"We have not been treated fairly by the World Trade Organisation," Trump told fellow world leaders at the Asia-Pacific Economic Cooperation summit in Vietnam. "We can no longer tolerate these chronic trade abuses, and we will not tolerate them."
Last week, he ramped up this strategy and effectively declared war by signing an order imposing 25 per cent tariffs on steel and ten per cent on aluminium.
It should be impossible to suddenly ratchet up tariffs in this way, or discriminate in how they are applied. Yet Trump excluded Mexico and Canada from the order, which seems to go against the WTO's Most Favoured Nation rule—a membership clause forcing countries to apply tariffs equally to all their trading partners (unless they have a free trade deal).
Trump got around this by invoking a national security exemption. Domestically, he used Section 232 of the 1962 Trade Adjustment Act, which allows the president to block imports deemed threatening to national security. At the WTO, he'd use Article XXI of the General Agreement on Tariffs and Trade, which lets a contracting party take any action “it considers necessary for the protection of its essential security interests.”
It's nonsense of course. Trump is not responding to a national security issue. You don't need to be a trade expert to work that out—you just need to look at his tweets. On 1st March he wrote that the United States had been "decimated by decades of unfair trade and bad policy.” No mention of national security there. Even Trump's Defense Secretary, James Mattis, doesn't believe it. "The US military requirements for steel and aluminum each represent only about three per cent of US production," he wrote.
But Trump does not need the national security argument to be true. Truth, after all, is now an outdated concept. In fact, it is more useful to him that it is demonstrably untrue. That turns a convenient excuse into an explicit snub at the multilateral world system.
Whatever happens now, the WTO is in trouble. There are three courses of action: that Trump's tariffs are not litigated, that they are litigated and he wins, or that they are litigated and he loses. They all go to a bad place.
“The right wing culture war will not be finished until the entire global rules-based order is brought crashing down”If Trump's clear flouting of the rules is not the subject of a WTO dispute, then it will be obvious that countries can ignore them without consequence. The authority of the WTO and the viability of a rules-based order will be undermined.
But even if a dispute is raised, it's hard to see how it would be enforced. For a start, it would take two to three years, during which Trump would be visibly doing whatever he liked and other countries would be tempted to respond by enacting tit-for-tat tariff retaliation. A lot of damage can happen in that time.
After that period is up, the panel which hears the case would pass it up to the WTO's appellate body, which decides on what to do next. But the appellate body cannot function, because the Trump administration is blocking appointments to it. Without it, there is no official authorisation to retaliate.
And even if the WTO could enforce the decision in time, it's hard to see a positive outcome.
If Trump wins, the national security exemption will provide a model for how other states can enact tariff policy free from the annoyance of rules. The case would set a precedent for countries to sideline and ignore the WTO.
If he loses, things potentially get even worse. Ostensibly there would be retaliatory tariffs on US goods, but this is immaterial, because he'd probably just take America out the WTO. He clearly has no interest in preserving it and any ruling which went against him would be portrayed as another example of the world ganging up against the supposedly hard-done-by US. With the world's largest economy leaving, the entire system would be brought into question.
This is the bleak reality of Trump's political programme. It can be summed up in three words: might is right. He wants to do as he likes. He is tired of global rules binding his actions.
It is of course the same rhetoric we hear on a daily basis from Brexiters angry at the EU for supposedly stealing their sovereignty. This is the remorseless logic of nationalism, whether it's of the British or American variety. Any restriction on the nation, whether it is a global human rights court, or a regulation on goods, or a state-to-state dispute settlement system for tariffs, is considered an intolerable infringement on independence.
The right wing culture war will not be finished until the entire global rules-based order is brought crashing down. The Brexit battle against the EU and the Trump battle against the WTO are two sides of the same coin.
