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How should the Biden administration “reconnominate” after this incident?

by YCPress

February 7 With the change of attitude of the United States, the World Trade Organization has finally finalized a new leader, ending the half-year-long state of “dragons without leader”.

In August 2020, Roberto Azevedo, then Director-General of the WTO, left office one year early for family reasons.

By the end of October, of the eight people running for the new Director-General, Ngozi Okonjo-Iveala, the former Finance Minister of Nigeria, had won the support of 163 of 164 WTO members, and only the United States under Trump publicly objected.

Because of the one vote of the former U.S. government, the WTO power vacuum that should have been resolved in 2020 has been postponed to this day.

Now the United States has decided to “release” the WTO on this issue. The U.S. Trade Representative’s Office said on the 5th that the new president Biden’s government was happy to express “strong support” to Oconcho Iveala.

Since then, the WTO has not only identified a new leadership, but also is about to usher in the first African and first female head.

While the Biden administration’s move can be regarded as a positive signal to the WTO, the former U.S. government has negative resistance to the WTO and even the entire international trading system, and has taken the initiative to undermine it.

In the field of trade alone, Biden’s “recontort” work still has a long way to go.

On the one hand, the repair and reform of the WTO depend on the cooperation of Biden’s government.

Among them, the top priority is the resumption of dispute settlement institutions.

The dispute settlement body is commonly known as the WTO appeal body.

As the “Supreme Court” of international trade, the appellate body has the power to make a certain compulsory “final decision” on trade dispute appeal cases.

The institution has seven permanent justices, and at least three justices are required to hear cases.

Since 2017, however, the Trump administration has blocked appeals agencies from selecting new judges on various pretexts such as “exceeding decisions” and “excess hearings”.

In December 2019, the appeal institution began to “shut down” due to the shortage of trial judges; on November 30, 2020, Zhao Hong, the “only surviving Chinese justice”, expired his term of office, and the appeal institution completely idled.

In an exclusive interview with Reference News last December, Zhao Hong said that for nearly a year, she was the only sitting justice of the appellate body, during which 14 cases were “unresolved” because they could not be heard.

This not only seriously weakens the overall effectiveness of the WTO dispute settlement mechanism, but also affects the pace of multilateral negotiations under the WTO framework and shakes the stability of the rules-based international trading system.

While supporting Oconcho-Iveala on the 5th, the United States also expressed its hope to cooperate with the new leadership of the WTO to achieve the “necessary substantive” reform of the organization.

If the appellate body cannot be restarted, it is difficult to imagine where WTO reform can begin.

On the other hand, it is also more important. The United States’ own trade policy needs to be completely transformed. Coincidentally, on the day the United States expressed its support for Oconcho-Iveala, the 2020 U.S. foreign trade data was released.

Last year, both U.S. imports and exports plummeted, and the trade deficit in goods and services soared by 17.7% year-on-year to $678.7 billion, the highest since the 2008 financial crisis.

The huge deficit of the United States “once in a decade” is not only a reflection of the strong impact of the epidemic on the economy, but also a complete failure of the Trump administration’s trade policy.

As said on Forbes.com on the 6th, Trump has made eliminating the trade deficit a core goal of his administration, so he imposed tariffs on hundreds of billions of dollars of products from China and other regions, but this move did not have the desired effect on the US trade deficit.

In addition to imposing tariffs, the Trump administration has also unlimitedly generalized the concept of “national security” and “cut off supply” high-tech products represented by chips to China.

While facing the impact of the epidemic, the global commodity supply chain also bears the risk of man-made manufacturing. Such a policy will not only lead to a shrinkage of world merchandise trade, but also maliciously violate the principles of free trade.

Therefore, whether the U.S. trade policy can return to the right path has attracted worldwide attention. The Biden administration is not unclear about this. Also on the 5th, the White House revealed that it was reviewing tariff policies on the EU.

And what kind of trade policy the Biden administration adopts for China, the world’s largest trading power, may be more symbolic.

In his foreign policy address not long ago, Biden vowed to “restore our role in international institutions” and “recover much credibility and moral authority we have lost”.

It is still in my ears that I believe that both the new head of the WTO and the other 163 members are waiting to see whether the United States can come back and whether diplomacy can come back.