The upcoming 2024 US election promises to bring significant changes to Washington and the world. As Joe Biden steps down from the White House and Donald Trump potentially returns, the potential implications on global trade and foreign relations have trading partners on edge. The fear of high import tariffs, disregarded World Trade Organization rules, and coercive tactics to enforce US dominance loom large on the horizon. However, the issues plaguing the US-led postwar order didn’t begin with the Trump administration but have rather been escalating over the years.
- The Decay of Multilateralism:
- The decline of a rules-based global trade framework has been a gradual process, exacerbated by the Trump administration’s disruptive policies.
- Even before Trump, the US showed signs of impatience with true multilateralism, questioning the WTO dispute settlement system and failing to comply with rulings.
- Attempts to shift towards a preferential system under George W Bush and later under Obama’s administration faced resistance and were ultimately derailed by domestic challenges.
- The Biden Administration’s Role:
- While Biden’s administration conveyed a message of multilateralism, actions spoke otherwise, leaving other member governments wary of the US’ commitment.
- Participation in WTO talks didn’t yield substantial results, and the administration continued to obstruct the WTO dispute settlement system, showing a lack of genuine interest in upholding international trade norms.
- Challenges Ahead:
- With a potential return of Trump, the threat of unilateral tariffs and further erosion of global trade norms becomes a pressing concern.
- The US may push for other countries to join in imposing sanctions on China, further complicating international trade relations and raising questions about adherence to rules-based principles.
As the future remains uncertain, there are some ways to reinforce the weakening multilateral system:
– Initiating long-awaited trade deals, like the EU and Mercosur agreement, can help signal a commitment to upholding global trade rules.
– Companies play a vital role in maintaining production networks despite official roadblocks, underscoring the importance of private sector resilience in turbulent times.
In conclusion, the challenges facing the global trade order are not just limited to the actions of one administration but are reflective of broader structural issues that have been brewing for decades. As the US grapples with its role in international trade, the need for a resilient, rules-based system becomes more crucial than ever. The future of multilateralism hangs in the balance, awaiting decisive action to uphold global trade norms and navigate the stormy waters ahead.
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