What would be the main consequences for a country leaving the WTO?Does the WTO itself have any input into trade agreements?Can schedules be bilaterally agreed in the WTO forum?What's Trump frustration with the WTO?Leaving the EU without a deal and MFN rulesHave any prominent Brexiteers argued for the UK to become a duty-free country (like Singapore)?Does the WTO have a concept of “default” or standard tariffs?No-deal Brexit: What would be the basis for a WTO complaint if goods entering Ireland are checked at Dunkirk?Can the UK deal selectively with Ireland post-Brexit without falling afoul of WTO rules?
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What would be the main consequences for a country leaving the WTO?
Does the WTO itself have any input into trade agreements?Can schedules be bilaterally agreed in the WTO forum?What's Trump frustration with the WTO?Leaving the EU without a deal and MFN rulesHave any prominent Brexiteers argued for the UK to become a duty-free country (like Singapore)?Does the WTO have a concept of “default” or standard tariffs?No-deal Brexit: What would be the basis for a WTO complaint if goods entering Ireland are checked at Dunkirk?Can the UK deal selectively with Ireland post-Brexit without falling afoul of WTO rules?
Trump threatened to leave the WTO a while back. (This might be understated, but I won't search how many times he may have said that.)
What I want to ask is: what would be the consequences for a country, big or small, if it just left the WTO? I assume (economic) size might make a difference in outcomes, although I could be wrong on this.
As far as I know there aren't any concrete example of countries who left, but if I'm somehow wrong on this (too), then we could have a concrete example of the consequences. If not, then perhaps we'd have to rely on some published analyses of such WTO-exit scenarios for an answer.
wto
asked 2 days ago
FizzFizz
13.3k13286
add a comment |
Trump threatened to leave the WTO a while back. (This might be understated, but I won't search how many times he may have said that.)
What I want to ask is: what would be the consequences for a country, big or small, if it just left the WTO? I assume (economic) size might make a difference in outcomes, although I could be wrong on this.
As far as I know there aren't any concrete example of countries who left, but if I'm somehow wrong on this (too), then we could have a concrete example of the consequences. If not, then perhaps we'd have to rely on some published analyses of such WTO-exit scenarios for an answer.
wto
asked 2 days ago
FizzFizz
13.3k13286
3
@JJJ: I don't know. Is there an economic shock effect for leaving, for instance? It's part of the question.
– Fizz
2 days ago
add a comment |
Trump threatened to leave the WTO a while back. (This might be understated, but I won't search how many times he may have said that.)
What I want to ask is: what would be the consequences for a country, big or small, if it just left the WTO? I assume (economic) size might make a difference in outcomes, although I could be wrong on this.
As far as I know there aren't any concrete example of countries who left, but if I'm somehow wrong on this (too), then we could have a concrete example of the consequences. If not, then perhaps we'd have to rely on some published analyses of such WTO-exit scenarios for an answer.
wto
asked 2 days ago
FizzFizz
13.3k13286
Trump threatened to leave the WTO a while back. (This might be understated, but I won't search how many times he may have said that.)
What I want to ask is: what would be the consequences for a country, big or small, if it just left the WTO? I assume (economic) size might make a difference in outcomes, although I could be wrong on this.
As far as I know there aren't any concrete example of countries who left, but if I'm somehow wrong on this (too), then we could have a concrete example of the consequences. If not, then perhaps we'd have to rely on some published analyses of such WTO-exit scenarios for an answer.
wto
wto
asked 2 days ago
FizzFizz
13.3k13286
asked 2 days ago
FizzFizz
13.3k13286
asked 2 days ago
FizzFizz
13.3k13286
asked 2 days ago
FizzFizz
13.3k13286
asked 2 days ago
FizzFizz
13.3k13286
13.3k13286
3
@JJJ: I don't know. Is there an economic shock effect for leaving, for instance? It's part of the question.
– Fizz
2 days ago
add a comment |
3
@JJJ: I don't know. Is there an economic shock effect for leaving, for instance? It's part of the question.
– Fizz
2 days ago
3
3
@JJJ: I don't know. Is there an economic shock effect for leaving, for instance? It's part of the question.
– Fizz
2 days ago
@JJJ: I don't know. Is there an economic shock effect for leaving, for instance? It's part of the question.
– Fizz
2 days ago
add a comment |
1 Answer
1
active
oldest
votes
One way to try to answer this is to look at the benefits of the WTO. The main two are Most Favored Nation and National Treatment:
Most Favored Nation basically says that if you lower a trade barrier for one nation you have to do the same for the others.
National Treatment basically means that you can't discriminate between locally produced goods and foreign goods. I'm not privy with the details but I'd spitball this is related to not favoring local businesses in government contracts, or at least not in broad daylight.
Conversely, if you were to leave the WTO, it would mean that your existing trading partners can now:
Lower trade barriers with other WTO members without lowering them for you; and increase trade barriers on you.
Favor their own local producers, and those of other WTO members, in lieu of yours.
(This of course goes both ways.)
A third benefit that you'd lose is the well oiled dispute resolution mechanism. (Edit: or as you point out in a comment, what used to be a well oiled mechanism.) Going forward you'd need to go negotiate arbitration clauses and put language to that effect in each trade treaty. Which I would imagine is not a big deal in practice. It would probably carry less predictable outcomes, but at the same time it could end up benefitting you on average if you're the 800 pound gorilla in the room.
A fourth benefit might also be that WTO members don't seem to go to war with one another very often. (They do impose sanctions on each other from time to time, though -- e.g. Russia.)
As to what the practical downsides and economic damage would be for any country that leaves, it would depend on the country and how much it trades internationally. Economists generally agree the WTO increases trade, so one might imagine trade falling when a country leaves, but by how much is frankly anyone's guess.
answered 2 days ago
Denis de BernardyDenis de Bernardy
14.2k33864
"Favor their own local producers, and those of other WTO members, in lieu of yours." - wouldn't this go both ways, so that the country leaving WTO could favor its own local producers? (this seems to be the main argument for those who want to leave WTO)
– vsz
2 days ago
@vsz: Yes. When answering the question yesterday I got the impression OP was only curious about the main downsides. Edited.
– Denis de Bernardy
2 days ago
Well, the WTO dispute resolution is largely deadlocked as a result of an appointment-blocking policy initiated by Obama and accentuated by Trump; see p. 18 in europarl.europa.eu/RegData/etudes/STUD/2018/603882/… So describing it as "well oiled" might be a bit of a stretch.
– Fizz
yesterday
@Fizz: Good point. I hadn't been following what the WTO had been doing since the early 2000s, and have edited your link into the answer. That said, as I noted a bit further into the paragraph, even if it worked fine I'd be suspicious this would make much of a difference for the US (or the EU, or China, or Japan), which basically are the 800 pound gorillas in the room.
– Denis de Bernardy
yesterday
add a comment |
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One way to try to answer this is to look at the benefits of the WTO. The main two are Most Favored Nation and National Treatment:
Most Favored Nation basically says that if you lower a trade barrier for one nation you have to do the same for the others.
National Treatment basically means that you can't discriminate between locally produced goods and foreign goods. I'm not privy with the details but I'd spitball this is related to not favoring local businesses in government contracts, or at least not in broad daylight.
Conversely, if you were to leave the WTO, it would mean that your existing trading partners can now:
Lower trade barriers with other WTO members without lowering them for you; and increase trade barriers on you.
Favor their own local producers, and those of other WTO members, in lieu of yours.
(This of course goes both ways.)
A third benefit that you'd lose is the well oiled dispute resolution mechanism. (Edit: or as you point out in a comment, what used to be a well oiled mechanism.) Going forward you'd need to go negotiate arbitration clauses and put language to that effect in each trade treaty. Which I would imagine is not a big deal in practice. It would probably carry less predictable outcomes, but at the same time it could end up benefitting you on average if you're the 800 pound gorilla in the room.
A fourth benefit might also be that WTO members don't seem to go to war with one another very often. (They do impose sanctions on each other from time to time, though -- e.g. Russia.)
As to what the practical downsides and economic damage would be for any country that leaves, it would depend on the country and how much it trades internationally. Economists generally agree the WTO increases trade, so one might imagine trade falling when a country leaves, but by how much is frankly anyone's guess.
answered 2 days ago
Denis de BernardyDenis de Bernardy
14.2k33864
"Favor their own local producers, and those of other WTO members, in lieu of yours." - wouldn't this go both ways, so that the country leaving WTO could favor its own local producers? (this seems to be the main argument for those who want to leave WTO)
– vsz
2 days ago
@vsz: Yes. When answering the question yesterday I got the impression OP was only curious about the main downsides. Edited.
– Denis de Bernardy
2 days ago
Well, the WTO dispute resolution is largely deadlocked as a result of an appointment-blocking policy initiated by Obama and accentuated by Trump; see p. 18 in europarl.europa.eu/RegData/etudes/STUD/2018/603882/… So describing it as "well oiled" might be a bit of a stretch.
– Fizz
yesterday
@Fizz: Good point. I hadn't been following what the WTO had been doing since the early 2000s, and have edited your link into the answer. That said, as I noted a bit further into the paragraph, even if it worked fine I'd be suspicious this would make much of a difference for the US (or the EU, or China, or Japan), which basically are the 800 pound gorillas in the room.
– Denis de Bernardy
yesterday
add a comment |
One way to try to answer this is to look at the benefits of the WTO. The main two are Most Favored Nation and National Treatment:
Most Favored Nation basically says that if you lower a trade barrier for one nation you have to do the same for the others.
National Treatment basically means that you can't discriminate between locally produced goods and foreign goods. I'm not privy with the details but I'd spitball this is related to not favoring local businesses in government contracts, or at least not in broad daylight.
Conversely, if you were to leave the WTO, it would mean that your existing trading partners can now:
Lower trade barriers with other WTO members without lowering them for you; and increase trade barriers on you.
Favor their own local producers, and those of other WTO members, in lieu of yours.
(This of course goes both ways.)
A third benefit that you'd lose is the well oiled dispute resolution mechanism. (Edit: or as you point out in a comment, what used to be a well oiled mechanism.) Going forward you'd need to go negotiate arbitration clauses and put language to that effect in each trade treaty. Which I would imagine is not a big deal in practice. It would probably carry less predictable outcomes, but at the same time it could end up benefitting you on average if you're the 800 pound gorilla in the room.
A fourth benefit might also be that WTO members don't seem to go to war with one another very often. (They do impose sanctions on each other from time to time, though -- e.g. Russia.)
As to what the practical downsides and economic damage would be for any country that leaves, it would depend on the country and how much it trades internationally. Economists generally agree the WTO increases trade, so one might imagine trade falling when a country leaves, but by how much is frankly anyone's guess.
answered 2 days ago
Denis de BernardyDenis de Bernardy
14.2k33864
"Favor their own local producers, and those of other WTO members, in lieu of yours." - wouldn't this go both ways, so that the country leaving WTO could favor its own local producers? (this seems to be the main argument for those who want to leave WTO)
– vsz
2 days ago
@vsz: Yes. When answering the question yesterday I got the impression OP was only curious about the main downsides. Edited.
– Denis de Bernardy
2 days ago
Well, the WTO dispute resolution is largely deadlocked as a result of an appointment-blocking policy initiated by Obama and accentuated by Trump; see p. 18 in europarl.europa.eu/RegData/etudes/STUD/2018/603882/… So describing it as "well oiled" might be a bit of a stretch.
– Fizz
yesterday
@Fizz: Good point. I hadn't been following what the WTO had been doing since the early 2000s, and have edited your link into the answer. That said, as I noted a bit further into the paragraph, even if it worked fine I'd be suspicious this would make much of a difference for the US (or the EU, or China, or Japan), which basically are the 800 pound gorillas in the room.
– Denis de Bernardy
yesterday
add a comment |
One way to try to answer this is to look at the benefits of the WTO. The main two are Most Favored Nation and National Treatment:
Most Favored Nation basically says that if you lower a trade barrier for one nation you have to do the same for the others.
National Treatment basically means that you can't discriminate between locally produced goods and foreign goods. I'm not privy with the details but I'd spitball this is related to not favoring local businesses in government contracts, or at least not in broad daylight.
Conversely, if you were to leave the WTO, it would mean that your existing trading partners can now:
Lower trade barriers with other WTO members without lowering them for you; and increase trade barriers on you.
Favor their own local producers, and those of other WTO members, in lieu of yours.
(This of course goes both ways.)
A third benefit that you'd lose is the well oiled dispute resolution mechanism. (Edit: or as you point out in a comment, what used to be a well oiled mechanism.) Going forward you'd need to go negotiate arbitration clauses and put language to that effect in each trade treaty. Which I would imagine is not a big deal in practice. It would probably carry less predictable outcomes, but at the same time it could end up benefitting you on average if you're the 800 pound gorilla in the room.
A fourth benefit might also be that WTO members don't seem to go to war with one another very often. (They do impose sanctions on each other from time to time, though -- e.g. Russia.)
As to what the practical downsides and economic damage would be for any country that leaves, it would depend on the country and how much it trades internationally. Economists generally agree the WTO increases trade, so one might imagine trade falling when a country leaves, but by how much is frankly anyone's guess.
answered 2 days ago
Denis de BernardyDenis de Bernardy
14.2k33864
One way to try to answer this is to look at the benefits of the WTO. The main two are Most Favored Nation and National Treatment:
Most Favored Nation basically says that if you lower a trade barrier for one nation you have to do the same for the others.
National Treatment basically means that you can't discriminate between locally produced goods and foreign goods. I'm not privy with the details but I'd spitball this is related to not favoring local businesses in government contracts, or at least not in broad daylight.
Conversely, if you were to leave the WTO, it would mean that your existing trading partners can now:
Lower trade barriers with other WTO members without lowering them for you; and increase trade barriers on you.
Favor their own local producers, and those of other WTO members, in lieu of yours.
(This of course goes both ways.)
A third benefit that you'd lose is the well oiled dispute resolution mechanism. (Edit: or as you point out in a comment, what used to be a well oiled mechanism.) Going forward you'd need to go negotiate arbitration clauses and put language to that effect in each trade treaty. Which I would imagine is not a big deal in practice. It would probably carry less predictable outcomes, but at the same time it could end up benefitting you on average if you're the 800 pound gorilla in the room.
A fourth benefit might also be that WTO members don't seem to go to war with one another very often. (They do impose sanctions on each other from time to time, though -- e.g. Russia.)
As to what the practical downsides and economic damage would be for any country that leaves, it would depend on the country and how much it trades internationally. Economists generally agree the WTO increases trade, so one might imagine trade falling when a country leaves, but by how much is frankly anyone's guess.
answered 2 days ago
Denis de BernardyDenis de Bernardy
14.2k33864
edited yesterday
answered 2 days ago
Denis de BernardyDenis de Bernardy
14.2k33864
answered 2 days ago
Denis de BernardyDenis de Bernardy
14.2k33864
answered 2 days ago
Denis de BernardyDenis de Bernardy
14.2k33864
14.2k33864
"Favor their own local producers, and those of other WTO members, in lieu of yours." - wouldn't this go both ways, so that the country leaving WTO could favor its own local producers? (this seems to be the main argument for those who want to leave WTO)
– vsz
2 days ago
@vsz: Yes. When answering the question yesterday I got the impression OP was only curious about the main downsides. Edited.
– Denis de Bernardy
2 days ago
Well, the WTO dispute resolution is largely deadlocked as a result of an appointment-blocking policy initiated by Obama and accentuated by Trump; see p. 18 in europarl.europa.eu/RegData/etudes/STUD/2018/603882/… So describing it as "well oiled" might be a bit of a stretch.
– Fizz
yesterday
@Fizz: Good point. I hadn't been following what the WTO had been doing since the early 2000s, and have edited your link into the answer. That said, as I noted a bit further into the paragraph, even if it worked fine I'd be suspicious this would make much of a difference for the US (or the EU, or China, or Japan), which basically are the 800 pound gorillas in the room.
– Denis de Bernardy
yesterday
add a comment |
"Favor their own local producers, and those of other WTO members, in lieu of yours." - wouldn't this go both ways, so that the country leaving WTO could favor its own local producers? (this seems to be the main argument for those who want to leave WTO)
– vsz
2 days ago
@vsz: Yes. When answering the question yesterday I got the impression OP was only curious about the main downsides. Edited.
– Denis de Bernardy
2 days ago
Well, the WTO dispute resolution is largely deadlocked as a result of an appointment-blocking policy initiated by Obama and accentuated by Trump; see p. 18 in europarl.europa.eu/RegData/etudes/STUD/2018/603882/… So describing it as "well oiled" might be a bit of a stretch.
– Fizz
yesterday
@Fizz: Good point. I hadn't been following what the WTO had been doing since the early 2000s, and have edited your link into the answer. That said, as I noted a bit further into the paragraph, even if it worked fine I'd be suspicious this would make much of a difference for the US (or the EU, or China, or Japan), which basically are the 800 pound gorillas in the room.
– Denis de Bernardy
yesterday
"Favor their own local producers, and those of other WTO members, in lieu of yours." - wouldn't this go both ways, so that the country leaving WTO could favor its own local producers? (this seems to be the main argument for those who want to leave WTO)
– vsz
2 days ago
"Favor their own local producers, and those of other WTO members, in lieu of yours." - wouldn't this go both ways, so that the country leaving WTO could favor its own local producers? (this seems to be the main argument for those who want to leave WTO)
– vsz
2 days ago
@vsz: Yes. When answering the question yesterday I got the impression OP was only curious about the main downsides. Edited.
– Denis de Bernardy
2 days ago
@vsz: Yes. When answering the question yesterday I got the impression OP was only curious about the main downsides. Edited.
– Denis de Bernardy
2 days ago
Well, the WTO dispute resolution is largely deadlocked as a result of an appointment-blocking policy initiated by Obama and accentuated by Trump; see p. 18 in europarl.europa.eu/RegData/etudes/STUD/2018/603882/… So describing it as "well oiled" might be a bit of a stretch.
– Fizz
yesterday
Well, the WTO dispute resolution is largely deadlocked as a result of an appointment-blocking policy initiated by Obama and accentuated by Trump; see p. 18 in europarl.europa.eu/RegData/etudes/STUD/2018/603882/… So describing it as "well oiled" might be a bit of a stretch.
– Fizz
yesterday
@Fizz: Good point. I hadn't been following what the WTO had been doing since the early 2000s, and have edited your link into the answer. That said, as I noted a bit further into the paragraph, even if it worked fine I'd be suspicious this would make much of a difference for the US (or the EU, or China, or Japan), which basically are the 800 pound gorillas in the room.
– Denis de Bernardy
yesterday
@Fizz: Good point. I hadn't been following what the WTO had been doing since the early 2000s, and have edited your link into the answer. That said, as I noted a bit further into the paragraph, even if it worked fine I'd be suspicious this would make much of a difference for the US (or the EU, or China, or Japan), which basically are the 800 pound gorillas in the room.
– Denis de Bernardy
yesterday
add a comment |
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@JJJ: I don't know. Is there an economic shock effect for leaving, for instance? It's part of the question.
– Fizz
2 days ago