fbpx
Analysis

Trump trashes Brexiters’ beloved WTO

by Sam Ashworth-Hayes | 31.08.2018

Hard Brexiters love reassuring us that we’ll be just fine crashing out of the EU with no deal because we’ll be able to fall back on World Trade Organisation (WTO) rules.

That argument (which was always weak) is now ridden with holes. Donald Trump popped up on Bloomberg to reiterate his loathing for the organisation, telling the world that “if they don’t shape up, I would withdraw from the WTO”, and describing the treaty to create it as “the single worst trade deal ever made”.

Demand a vote on the Brexit deal

Click here to find out more

Words, surely, to give even the most ardent no-deal advocate pause. If the UK leaves the EU without a deal, it will be even more dependent on the smooth running of the global trade system than it is today, at a time when the US is actively undermining the organisations and norms that allow that system to prosper.

Remember that Trump has already launched a trade war with China and threatened to do the same with the EU – and was only stopped from doing so because the EU has the clout to stand up to his bullying, something we will not have if we fly solo.

Remember too that relying on WTO terms to trade with the EU would be vastly inferior to having full access to its single market – and vastly inferior to having access to over 60 other countries’ markets by virtue of deals the EU has cut with them. The WTO doesn’t eliminate tariffs; and it does little to reduce non-tariff barriers (the rules and regulations that gum up modern trade) or open up services markets, where the UK has a particular strength.

During the referendum two years ago, the prospect of Trump becoming US president – and creating a dystopian world where might is right – seemed a long shot. That he is now doing precisely that is another new fact which justifies a People’s Vote at the end of the Brexit talks.

Edited by Hugo Dixon

4 Responses to “Trump trashes Brexiters’ beloved WTO”

  • Do you think Trump’s threat to leave the WTO if they don’t shape-up has any credibility? Pretty certainly nothing inside the WTO will change during his tenure, because its modus operandi requires unanimity from 167 nations. That’s never going to happen quickly!

  • The US is the world’s largest economy. US firms, interests, investments are everywhere, and the US courts have claimed very wide jurisdiction. If th US chooses not to abide by WTO rules, and uses soft power to protect US firms and interests from any sanctions for breaking them, it will fatally damage the rule based international trade system. Trump’s trade war repeats the mistakes that led to the Great Depression of the 1930s. Not a good time for UK to leave the protection of being a member of the largest single market in the world.

  • If the biggest,by far, of those 167 nations unilaterally withdraws then the wishes of the other 166 won’t mean much.