Nations’ bilateral parleys with US threat to WTO: Experts

New Delhi: The current trend of countries seeking exemptions from the higher tariffs levied by the US through bilateral consultations is a dangerous trend and a threat to the multilateral trading system, Indian officials and experts have said.

From its a no-exception stance a few weeks ago, the US has given exemptions to some allies including Australia, South Korea, Mexico and Canada from higher tariffs on steel and aluminium it imposed earlier.

The approach is wrong on two counts, experts said. Besides violating the Most Favoured Nation (MFN) principle under which countries are not supposed to discriminate between goods on the basis of their origin or destination, the move goes beyond the tariff issue by undermining the World Trade Organization (WTO), which is responsible for resolving trade disputes among countries, they said. “The US is giving them a bait and other countries are negotiating their issues with it by boycotting the WTO,” said an expert on WTO matters. “Global trade will collapse because countries want to save their own backyard.”


Experts expect China to begin bilateral consultations with the US, as it has already retaliated with reciprocal tariffs after the Trump administration imposed tariffs on $60 billion worth of Chinese products.

“The US has come to unilateralism and we don’t know what China will do,” said Biswajit Dhar, professor at the Centre for Economic Studies and Planning in the School of Social Sciences at Jawaharlal Nehru University in Delhi. “The collateral damage if the two largest economies of the world get into a trade war will be immense,” he said.

WTO NORMS VIOLATED
Experts said the US’ decision to impose 25% duty on Chinese imports of information and communication technology products violates the Information Technology Agreement, under which signatories can’t impose import duties on many IT products.