The United States: From 'Chief Architect' to 'Threat to Order' [WTO Declares End] ③

Order of Publication

<1>Seven Years of WTO Appellate Body Paralysis...Global Trade Already in a 'Lawless State'
<2>Responsible for 98% of Global Trade...Resolving Trade Disputes and Driving Economic Growth
<3>The United States: From 'Key Architect' to 'Threat to Order'
<4>China as the Catalyst for Shaking the WTO...The EU as an Accomplice
<5>The EU's 'Plan B'...Structural Limitations Remain
<6>Every Nation for Itself? Alliances and Coalitions? Globalization Without the U.S.?...Which Path Should Korea Take?

"In 1995, we took an important first step by establishing the World Trade Organization (WTO). This was a goal that our predecessor nations had failed to achieve for nearly half a century. Economic freedom and trade liberalization brought unprecedented prosperity in the 20th century and will broaden the scope of opportunity in the 21st century." (Former U.S. President Bill Clinton, 1998 WTO Ministerial Conference)

On January 1, 1995, the WTO system was launched to establish a new international economic order. Following the WTO's inception, then-U.S. President Bill Clinton called it an "important first step." The United States did not simply join as a founding member but participated as a "rule maker"?a key architect?leading the global free trade system with the confidence that it could shape the world's economic norms to its own advantage. However, nearly 30 years after its launch, the WTO system has now been declared "terminated" by its very architect, the United States. As Jamieson Greer, representative of the U.S. Trade Representative (USTR), stated, "Under the WTO-centered free trade system, the United States paid the price through the loss of industrial jobs and economic security, while other countries failed to implement necessary reforms. The biggest winner was China."

Lee Jaemin, professor at Seoul National University School of Law, said, "Within the United States, there is a growing belief that the multilateral trade system, namely the WTO, no longer serves U.S. interests," adding, "This is not just a perception unique to the second Trump administration, but rather a longstanding concern, and such criticism has now reached a dead end."

The General Agreement on Tariffs and Trade (GATT), the predecessor to the WTO, was established in response to the realization that protectionism and economic bloc formation had fueled war. The belief was that a free and open trading order would not only foster economic growth but also help deter war. In this context, after World War II, the United States emerged as a superpower and, as the world's largest producer and exporter, saw the need to dismantle other countries' trade barriers to open overseas markets for its own goods.

Having successfully established the International Monetary Fund (IMF) in 1945 and the International Bank for Reconstruction and Development (IBRD)?the predecessor to the World Bank?in 1946, the United States pushed for the creation of the International Trade Organization (ITO). However, when the U.S. Congress refused to ratify it, citing "excessive government intervention," the plan was scrapped and GATT was adopted instead. After more than seven years of negotiations during the Uruguay Round, the "Marrakesh Declaration" was jointly announced in 1994, leading to the birth of the WTO. At the time, the USTR stated, "As a key member of the WTO, the United States played an active role in the accession negotiations. Joining the WTO not only expands the international trade community but also offers opportunities to increase market access for U.S. goods and services."

The United States' expectations became reality. According to the WTO, global merchandise trade (exports + imports) soared from $7.911 trillion in 1994 to $49.1778 trillion in 2024, a 593.5% increase. U.S. trade volume also increased by 495.7%, from $1.2018 trillion to $5.4245 trillion over the same period. Both the world and the United States benefited from the free trade system guaranteed by the WTO.

The United States also actively utilized the WTO's Dispute Settlement Body (DSB) to protect its own industries and strengthen trade norms. For example, the U.S. filed a complaint with the WTO against the European Community (EC) for granting tariff preferences to bananas from ACP countries?Africa, the Caribbean, and the Pacific?over bananas from Latin America. The WTO ruled in favor of the U.S. and recommended that the EC change its system. In 1997, the U.S. also filed a complaint against Japan, arguing that Japan's quarantine measures on American fruit were an unjustified import restriction lacking scientific basis. The U.S. won, and Japan withdrew the measures.

Despite being a strong advocate for the WTO system, the United States began to change its stance in the mid-to-late 2010s. Domestically, its manufacturing base had eroded, and China's rapid rise threatened U.S. hegemony. Jung Haneul, director of the Institute for International Legal Order, analyzed, "The reasons for the U.S. attitude shift toward the WTO are both domestic and international. Domestically, the anger of those marginalized by neoliberalism in the U.S. appears to have reached a tipping point. Internationally, the WTO system has worked in China's favor in the U.S.-China power competition. Specifically, the WTO agreements failed to prevent China's indirect subsidies and intellectual property (IP) theft."

China joined the WTO in 2001 and its economy grew rapidly thereafter. Jung explained, "In the 1990s, China's GDP was only 6?13% of that of the United States, and due to its underdeveloped industries, it was believed China could never become an economic giant. However, even excluding issues such as IP infringement, China's potential was enormous, but the U.S. overlooked this at the time."

China's economic growth is also reflected in the amount of contributions each country pays to operate the WTO. These contributions are calculated by comparing a country's international trade volume over the previous three years to the total trade volume of all member countries. In other words, the contribution ratio reflects a country's share of global trade. According to WTO data, China's contribution in 2004, three years after joining the WTO, was 5,228,175 francs (approximately $6,319,500), accounting for only 3.3% of the total. In the same year, the U.S. paid 25,259,391 francs (approximately $305,302,490), which was 15.8% of the total contributions.

However, China's share gradually increased, reaching 10% of the total in 2019 and rising to 11.2% last year. In contrast, the U.S. has been paying contributions in the 11% range since 2013. While the U.S. is still assessed the largest share among WTO members, it did not pay last year. An official from the Ministry of Trade, Industry and Energy said, "Although neither the WTO nor the U.S. has made an official announcement, according to local media, the U.S. has not paid its WTO contributions since last year. The U.S. government is currently reviewing its participation in international organizations, including the WTO, and the decision on whether to pay contributions for 2024 and this year will depend on the outcome of that review."

The United States' dissatisfaction with the WTO has been openly expressed by President Donald Trump. In April 2018, during his first term, President Trump posted on social media, "China is a great economic power but is considered a developing country by the WTO and enjoys enormous privileges and advantages over the U.S. The WTO is unfair to the United States." In an interview with Bloomberg that same year, he intensified his criticism, saying, "If they do not improve, I will withdraw from the WTO." After winning re-election, President Trump issued an executive order in February of this year directing a review of all multilateral international organizations and treaties, including the WTO, within 180 days. Greer's declaration of the end of the WTO system is an extension of this trend.

This content was produced with the assistance of AI translation services.