WTO Crisis: Expert Warns of Global Consequences from Unilateral US Tariffs

Strategic Insights -

The WTO is still operational despite significant shortcomings, but national leaders are eroding the institution, says Tomohiko Kobayashi, an expert on international trade. The Japanese professor warns that the United States's unilateral tariffs will harm not just the US, but all countries involved in global trade. Kobayashi advocates for multilateralism and emphasizes that the WTO's Appellate Body and Doha Round of negotiations are paralyzed due to the inaction of its member states.

Key Takeaways:

  • Tomohiko Kobayashi, a professor at the Otaru University of Commerce, emphasizes that the WTO is not dead and can be reformed, but its survival depends on the willingness of its member states.
  • The US tariffs imposed on Brazilian products will harm both countries and the global economy, as they are unpredictable and fluctuating.
  • Japan's deal with the US, reducing tariffs from 25% to 15% in exchange for $550 billion in investments and loans, is questioned by Kobayashi for lacking formal documentation.
  • Brazil's decision to challenge US tariffs at the WTO shows its commitment to multilateral rules, according to Kobayashi.
  • The WTO's effectiveness is crisis, especially after the US withdrawal from several agreements and the ongoing pandemic.
  • The dispute between the US and Brazil at the WTO may take two to four years to resolve, depending on the complexity of the case.
  • The US could withdraw from the WTO and disregard its rules, but as a member, it is bound by them.

Statistics:

  • 50%: The tariffs imposed by the US on Brazilian products.
  • $550 billion: The package of investments and loans agreed upon by Japan and the US.
  • 25%: The tariffs on Japanese imports reduced to 15% under the agreement.
  • 2017-2021: Time period during which the US withdrew from several agreements weakening the WTO.
  • 1995: The year the WTO was created to succeed the GATT.
  • 2-4 years: The estimated time for a WTO dispute to be resolved.
  • 1: Number of exception allowed to protect national interests or security under the WTO rules.

Sources:

  • Valor: Tomohiko Kobayashi's interview.
  • Otaru University of Commerce: Tomohiko Kobayashi's affiliation.
  • Japanese Ministry of Economy, Trade and Industry: Committee on the World Trade Organization (WTO).