If the Trump administration seeks an end to binding dispute settlement procedures, it would represent a significant departure from decades of the United States leading the global charge for making dispute settlement in trade agreements binding and enforceable.
The U.S. Constitution guarantees that no person may be “deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” But what we take for granted in the United States isn’t always the case when doing business abroad.
WTO members voluntarily agreed to rules to create a more secure and predictable trading environment for their traders. By and large, members comply with these rules so that others will as well. But when one member believes that another is not complying, the WTO has procedures for settling disputes.
China argues it should be granted “market economy status” by all WTO Members. Some of the world’s major economies, including the United States, think it depends on the specific situation. American producers of industrial commodities such as steel say China is not operating on market principles in their sector.
Playing Calvinball in commerce undermines the benefits of the transaction for both parties, which is why trade rules are important when engaging in international commerce.