WTO Facing 'Trump Test' Amid China's Growing Concern

Kristian Rouz — The World Trade Organisation (WTO) is bracing for a new round of criticism from US President Donald Trump at the upcoming Group of 20 world's largest economies (G20) in Argentina. Trump has long been sceptical of the WTO's mandate to uphold free and unrestricted trade, and Mainland China is now sounding alarm over a possible overhaul of the WTO rules.

Leaders of the G20 are set to meet in Argentina next week, with the rising threat of disruptions in international trade on the agenda. Trump is pushing for change in the global trading relations aimed at eliminating imbalances in international flows of goods and capitals to make trade — as he puts it — free and fair.

Trump is expected to meet with his Chinese counterpart Xi Jinping on the sidelines of the G20 meeting. Their anticipated discussions follow reports that the US and China have resumed their talks on trade to ease bilateral tensions — but little progress has reportedly been achieved so far.

"Even if they are able to reach a small agreement, the leaders of China and the United States cannot reach a fundamental agreement, so there would not be a ceasefire in the trade war," Shi Yinhong of the Centre for American Studies at Renmin University in Beijing said.

READ MORE: US Launches WTO Disputes Against Reciprocal Tariffs From China, EU, Canada

Additionally, European and Asian officials involved with the preparations for the upcoming G20 summit have reportedly said they want to discuss climate change as well. This might be a challenging mission for them — as Trump has repeatedly dismissed the global warming narrative, even reiterating his criticism in two of his recent tweets.

The Trump administration has also adopted limited restrictions on US foreign trade, mainly based off the results of the US Trade Representative's investigations under the Section 232 of the Trade Expansion Act of 1962 and the Section 301 of the 1974 Trade Act.

Trump said China has been abusing US intellectual property, while a handful of foreign nations have been dumping their products into the US market at prices below market value. The US President is expected to bring his agenda to the G20, possible seeking to amend the WTO rules.

Trump is also expected to express his concerns to Xi. This comes in the wake of a recent report from the US Trade Representative that found Beijing has so far failed to address the findings of the 232 and 301 probes.

US officials are quite sceptical of the China talks — but they reiterated that dialogue is necessary.

"Expectations (of the Trump-Xi talks) are low. But keeping the personal relationship going is an extremely high priority," an unnamed top Trump administration official told Reuters.

Trump has also floated the idea of withdrawing the world's largest economy from the WTO a month ago, despite administration officials having somewhat refuted some of the reports at the time.

"If they don't shape up, I would withdraw from the WTO," Trump told Bloomberg News back in August. "(WTO rules) benefit everybody but us," Trump added. "We lose the lawsuits, almost all of the lawsuits in the WTO".

In this light, China is increasingly anxious of Trump's upcoming onslaught at the G20. China has long taken pride in its accession to the WTO on its own terms back in 2001 — which some say has allowed Beijing to greatly capitalise on the organisation's open-trade mandate by advancing its cheaper exports into the world's advanced economies.

READ MORE: Chinese FM: Beijing to Oppose Actions Undermining Its Interests at G20 Summit

But Trump has suggested this will be no longer — to China's dismay.

"Some countries are in reality just hoping to uphold their monopoly status and restrict other member states' development," China's Vice Commerce Minister Wang Shouwen said.

Chinese officials reaffirmed their commitment to maintaining the status-quo at the WTO, as they appear to be guided by the 'if it ain't broke, don't fix it' principle.

But Trump's aggressive push to protect US industries, jobs, and workers might bring change to the organisation — particularly so, if the US President proposes measures that will equally help other advanced economies protect their own industries.

Trump said he's highly prepared for the meeting with Xi.

"I know every ingredient. I know every stat," Trump said. "I know it better than anybody knows it. And my gut has always been right. And we're doing very well. And I will tell you China very much wants to make a deal."

READ MORE: Beijing Lambasts 'Absurd' US Plans to Oust China From WTO Amid Trade War

The G20 summit is expected to be intense and could get quite dramatic. Nonetheless, officials from some European and Asian countries have expressed moderate optimism the summit will produce a joint communique when the gathering ends on 1 December.