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Finance and economics                                                     The Economist December 9th 2017 69


                                                                                 Also in this section
                                                                              70 China at the WTO
                                                                              70 Trade in Africa
                                                                              73 Buttonwood: Market exuberance
                                                                              74 Venezuela and oil prices
                                                                              74 Hedge funds and AI
                                                                              75 Contraception and girls’ education
                                                                              75 Marijuana and banking in California
                                                                              76 Shareholder litigation in Europe
                                                                              77 Free exchange: Paying no mind






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        The World Trade Organisation                                         velopment, a Geneva-based think-tank.
                                                                               The sabotaging of the WTO’s appellate
        Situations vacant                                                    body, however, is clearly the handiwork of
                                                                             the Trump administration. On December
                                                                             11th the term of Peter Van den Bossche, the
                                                                             European judge on the body, will expire.
                                                                             He will be the third judge whose reap-
                                                                             pointment the Americans have blocked.
                                                                               On the present course, by the end of
        As members gatherforits big meeting, the WTO is in trouble
                                                                             2019 too few judges will be left to rule on
            VERYBODY meets in Buenos Aires,”  dence relating to solar-panel imports to  new cases (three are required). Mark Wu, a
        “Esaid Cecilia Malmstrom, the Euro-  help make the case that any tariffs would  law professor at Harvard University, wor-
        pean Union’s trade commissioner, days  be WTO-compliant.             ries that gummingup the judicial arm may
        before heading there for the World Trade  But an institution can be damaged  make countries doubt that the WTO is the
        Organisation’s (WTO) biennial gathering  without blowing it up. Over the past few  bestforum forsettlingdisputes. “The riskis
        of ministers, which opens on December  weeks organisers ofthe meeting in Buenos  less of an immediate explosion,” he says,
        10th. Some non-governmental organisa-  Aires have been managing expectations  “than a slowerdeath by a thousand cuts.”
        tions have been blocked by the protest-  down. No one thinks much will be agreed  Mr Lighthizer has hinted at a return to
        averse Argentine authorities, but a meet-  on. Some sigh that a committed American  the old, pre-WTO system ofresolvingtrade
        ing of people will indeed take place. One  administration might have achieved an  disputes—by national muscle rather than
        ofminds is anothermatter.          agreement on curbing fishing subsidies, re-  lawyers. Ms Malmstrom says she cannot
           Most participants can agree on one  vived one easing barriers to trade in envi-  envisage going back to that. But the im-
        thing. The WTO, which codifies the multi-  ronmental goods, and organised an ambi-  passe has no obvious way out. Any
        lateral rules-based trading system, needs  tious agenda for e-commerce. Instead, the  manoeuvre to bypass the American block-
        help. President Donald Trump has railed  Americans have been bickering over the  age of the appellate body would be politi-
        against it and threatened to pull America  language in a proposed joint statement.  cally, if not legally, untenable. And the
        out. Without American leadership, there is  They quibble with references to the “cen-  Americans have not said what reforms
        little hope ofreachingnewdeals. And even  trality of the multilateral trading system”  they want.
        asthe WTO’sdealmakingarm isparalysed,  and to “development” as an objective.
        the Trump administration is weakening its  Still, it is unfair to blame the Trump ad-  Bull in a China shop
        judicial one by starvingit ofjudges.  ministration alone forthe likelylack ofpro-  As the Trump administration kicks at the
           Despite Mr Trump’s threats,  America  gressin BuenosAires. The dealmaking arm  working leg of a limping institution, it is
        does not seem on the verge ofcrashing out  ofthe WTOhasnotworked foryears. India  worth recalling that previous American
        of a system it helped to construct, to rely  routinely holds agreements hostage to its  administrations have also felt frustrated
        entirely on bilateral trade deals and reme-  demands. The Chinese scuppered an  with the WTO. Few would disagree that it
        dies. He may think that true reciprocity  agreement over environmental goods.  needs reform. In particular, China, de-
        means American tariffs to match Chinese  Some developing countries complain that  scribed by Ms Malmstrom as the WTO’s
        ones. (For goods, America’s average 3.5%,  dealsto help them should be agreed on be-  “problematic client”, has an economic
        China’s 9.9%.) But Congress is likely to sty-  fore new areas are opened up. Updating  model that sits awkwardly inside the WTO
        mie attempts to raise duties, and anything  the rules needs consensus among all 164  system. The organisation’s rules were
        he does manage will face swift and painful  member countries, which is almost unat-  drafted in the early1990s with transitional
        retaliation. Robert Lighthizer, the United  tainable. “Even the US at its most construc-  economies like those of Eastern Europe in
        States trade representative, seems to be  tive isn’t going to fix the system where it is  mind. Hosuk Lee-Makiyama of the Euro-
        stickingto the WTO’srulesfornow. On De-  now,” says Andrew Crosby of the Interna-  pean Centre for International Political
        cember 4th, for example, he requested evi-  tional Centre forTrade and Sustainable De-  Economy, a Brussels think-tank, says they 1
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