TradeEvolving the rules-based system
The global rules-based trading system is in crisis. Without bold leadership from the United States, the system risks deteriorating, slowing global growth and upending a system that has raised living standards for billions. The United States played a crucial role in creating the current global rules-based trading system and has the most to lose.
CSIS Trade Commission Report
Full Report
The System Under Pressure
The linchpin of the system is the World Trade Organization, but its three pillars – negotiation, dispute settlement and transparency – are fraying. In response, countries have turned to regional trade agreements to advance their interests, leading to overlap trade regimes and trade diversion that the United States can do little to shape.
The China Challenge
Two conflicting economic approaches are putting additional pressure on the system: a Western-led, rules of law-based market-driven model and an authoritarian state-driven model championed by China. The World Trade Organization was not designed to meet the full range of challenges posed by China’s model.
Its rulebook remains out of date and its value as a forum for settling disputes before they escalate is fading. At risk is the global rules-based trading system.
CSIS Trade Commission Recommendations
The Commission recommends three sets of actions to revitalize the global rules-based trading system and advance U.S. interests.
- Create a new trade compact parallel to the WTO to ensure that trade rules keep pace with changes in the global economy and are able to counter unfair non-market practices.
- Revitalize the WTO through targeted efforts aimed at achieving realistic reform objectives.
- Update the U.S. domestic trade policy toolbox so it is better equipped to deal with unfair trade practices not adequately addressed by WTO rules.
These recommendations should be combined with a proactive trade policy that pursues strategic trade agreements that advance U.S. interests.
More about theRecommendations