USTR's 2020 Trade Policy Agenda and 2019 Annual Report was released today. Among other things, it includes a lot of complaints about the WTO, and clearly reflects the trade views of the Trump administration. There's a part of me that would like to go through page by page and respond to every point, but that would be exhausting and would probably not achieve much. Instead, I'm going to focus on one specific issue the report raises:
The WTO currently locks-in outdated tariff determinations that no longer reflect deliberate policy choices and economic realities. As a result, many countries that have large economies that have developed significantly over the past two decades continue to maintain very high bound tariff rates, far in excess of the rates applied by the United States or to which the United States is bound. For example, the U.S. average bound tariff rate and applied Most Favored Nation rate are both 3.4 percent. In comparison, Brazil’s bound tariff rate is 31.4 percent, and its applied rate is 13 percent. India’s bound and applied tariff rates are 48.5 percent and 17 percent, respectively. Members need to fundamentally rethink tariffs and their role, recognizing that commitments on tariffs should reflect current economic conditions.
I agree that it would be great if other countries would lower their tariffs. How might the U.S. government achieve this goal? I have two suggestions: (1) Stop spending so much time and effort pushing other countries on other policies, such as intellectual property protection, and focus on tariff lowering instead; and (2) offer to liberalize in the areas where other countries complain about U.S. protectionism, such as farm subsidies or anti-dumping abuses.
I think this approach would work, and until someone tries it and proves me wrong, I will remain convinced and keep promoting it.
