Page 18 - The Economist

18 Leaders The Economist December 9th 2017
2 to get at, and their value is increasingly well understood. Au- side developers. But their incentives to share valuable data
tonomous cars will be a good test. Alphabet’s Waymo has and algorithms are weak. Much will depend on whetherregu-
done more real-world testing ofself-driving cars than any oth- lations prise open their grip. Europe’s impending data-protec-
er firm: over 4m miles (6.5m kilometres) on public roads. But tion rules, for example, require firms to get explicit consent for
established carmakers, and startups like Tesla, can generate how they use data and to make it easier for customers to trans-
more data from their existing fleets; other firms, like Mobileye, fer their information to other providers. China may try to help
a driverless-tech firm owned by Intel, are also in the race. its firms by havingnegligible regulation.
The third question is how openly knowledge will be The battle in AI isfiercestamongthe tech giants. It istoo ear-
shared. The tech giants’ ability to recruit AI expertise from uni- ly to know how good that will be for competition, but not to
versities is helped by their willingness to publish research; anticipate the magic ingredient that will determine the out-
Google and Facebook have opened software libraries to out- come: the importance, accessibility and openness ofdata. 7

The World Trade Organisation
Disaster management

The WTO is flawed. Butthe Trump administration’s undermining ofitis bad forthe world and forAmerica
OR Roberto Azevêdo, its di- such products as steel and aluminium goods, solar cells and
WTO active disputes Frector-general, the WTO is a washing-machines. The investigations into steel and alumi-
“hostage ofits own success”. For nium were instigated under a law from 1962 that had not been
40
President Donald Trump it is “a used since 2001. Whereas the use ofthe WTO quarantines dis-
30
20 disaster”. Mr Trump would not putes, by turning them into dry, technocratic affairs, “self-initi-
be alone in balking at Mr Aze- ated” actions politicise even routine complaints.
10
vêdo’s formulation, meant to A third form ofattackis more insidious. America has failed
0
2005 10 15 17*
manage down expectations for to appointitsown permanentrepresentative to the WTO. And,
*As of November
the WTO’s two-yearly ministerial meeting in Argentina later citing arcane procedural concerns, it has kept open vacancies
this month (see page 69). The WTO has not achieved a big forjudges on the WTO’s appeals court. The court already has a
breakthrough in its mission of trade liberalisation for more backlog of cases. If the gaps are not filled, the system for set-
than two decades. Itslastbiground oftrade talks, the Doha De- tlingdisputesisatriskofcollapse. Ifcountriesthen take retalia-
velopment Agenda, became the Jarndyce v Jarndyce of trade tion into theirown hands, the WTO itselfmay follow.
diplomacy; in 2015 it was quietly put out ofits misery. It is unclear ifthe administration really wants that. It is sup-
Ifonly a disappointing record were the biggest problem for porting the European Union in a case brought at the WTO by
the WTO. America has had fraught relations with it for years; China, which wants “market-economy” status. This would
under Mr Trump, frustration has turned to aggression. Ameri- make it harder to impose stiffanti-dumping duties on Chinese
ca feels that China, the world’s biggest exporter, has used the exports. America seems to recognise the WTO’s continued
WTO to provide legal cover for a policy ofmercantilism. Rath- usefulness here. Perhaps, then, America hopes the pressure
er than help the WTO find solutions, the administration has will spur reform of the body. Yet that line looks optimistic,
preferred to undermine it, through a mixture of policy unilat- since America has not spelled out what it wants to change.
eralism, rhetorical criticism and bureaucratic sabotage. That Instead, the administration seems to want the best of all
approach is wrong. The WTO is easy to criticise and take for worlds; usingthe WTO when itsuitsit, while puttingits energy
granted. Butitisvital forthe world economy—and for America. into bilateral strong-arm tactics. Yetthatwould not be good for
America, either. The tariffs it keeps threatening would raise
You’ll miss me when I’m gone prices for its own consumers. Exports that rely on imported
So far, Mr Trump has not carried out the most drastic of the components would become less competitive: the American
trade threats he made so loudly on the campaign trail: across car industry says tariffs on parts from Mexico would increase
the board, 45% tariffs on imports from China, plus withdrawal its costs by $16bn-27bn a year. Partners would be likelier to re-
from the WTO and North American Free-Trade Agreement taliate directly ratherthan seekredress through the WTO.
(NAFTA). But he still sees trade as a zero-sum game that Ameri- If the WTO were shunned by the world’s biggest economy
ca has been losing, in which imports are bad, exports are good it might not collapse, but it would wither. That would indeed
and a bilateral trade balance is the scoresheet. Because of its be a disaster. The WTO isrooted in the vision ofa liberal world
heft, the thinking goes, America will always win in bilateral order America has led since the second world war. It links
trade deals where it can bully the country on the other side of nearly all the world’s countries in an agreed rules-based
the table. If only it could exploit its advantages, it argues, it framework. Some Americansargue thatithasfailed in itsmost
would force open foreign markets or use trade as a bargaining ambitious venture: binding the state-dominated Chinese
chip to pursue its wider interests—securing Chinese help, say, economy, admitted in 2001, into a fair trading system. China’s
to rein in North Korea’s nuclearambitions. market reforms have indeed disappointed. But viewed anoth-
And so Mr Trump’s officials have, directly and by neglect, er way, the WTO has smoothed the disruption caused by the
taken aim atthe multilateral tradingsystem. Theyhave openly reintegration into the world of what is now its second-largest
criticised the WTO. They have sidestepped it, resorting to economy. It remains the best way oftryingto make China play
dusty American laws to investigate unilaterally imports of by the rules. In a trade war, no country would win. 7