At last month's G7 summit in Biarritz, leaders again paid lip service to reforming the World Trade Organization. But, given the US-led effort to weaken the WTO, the more likely scenario is the emergence of a new international order in which trade deals replace trade rules, and raw power politics stand in for dispute adjudication.
BUENOS AIRES – In the 1980s, US President Ronald Reagan’s administration forced Japan to accept “voluntary” restraints on its exports, particularly of automobiles, in order to reduce America’s trade deficit and protect its companies from Japanese competition. By 1994, the deficit hadn’t shrunk, but US car manufacturers had become more competitive, so the restrictions were discontinued. The next year, the World Trade Organization was established, and such unfair “voluntary” restraints were outlawed.
BUENOS AIRES – In the 1980s, US President Ronald Reagan’s administration forced Japan to accept “voluntary” restraints on its exports, particularly of automobiles, in order to reduce America’s trade deficit and protect its companies from Japanese competition. By 1994, the deficit hadn’t shrunk, but US car manufacturers had become more competitive, so the restrictions were discontinued. The next year, the World Trade Organization was established, and such unfair “voluntary” restraints were outlawed.