THE UNITED STATES – CHINA TRADE WAR AND THE COLLAPSING OF THE WORLD TRADE ORGANIZATION

Sanja Jelisavac Trošić

Abstract

The aim of this paper was to research, describe and explain the causal link between the US-China trade war and the initiation of WTO reforms. Changes in US trade policy took place under Trump’s leadership. Driven by the slogan “America First”, the administration introduced measures that have increasingly began to resemble a trade war against China. With reference to Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974 tariffs were imposed on a wide range of imports from China, in response to alleged threats to national security and unfair trade practices. The trade facilitation, predictability and freedom of trade flows have been compromised by these actions, and thus the basic WTO postulates.The lack of progress in the Doha trade talks and the overload of dispute settlement systems are factors that have already weakened the WTO’s international reputation. US protectionist measures have further eroded the organization’s credibility. As a result, there is a rise in protectionism in other WTO member countries as well. Also, the US has been blocking appointments and reappointments of its members of the Appellate Body for over a two years, which has led to the cessation of work of this body and the crisis of the dispute settlement mechanism.Trade war has led officials to come forward on the need for thorough WTO reform. When it came to critical mass, formal proposals for reform began. Consultations have also started between the leading Member States. Adopting a comprehensive reform program will be very difficult, given the WTO’s decision-making mechanism. However, no matter what the results, this process has begun and the problems can no longer be ignored.

An open question for future research is whether the WTO will successfully reform and thereby prevent the emergence of new trade wars, or whether we are pursuing a future without multilateral trade rules, with the right of the strongest.

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