WTO's impotence???? Serious question

[Legislurker]

The WTO isn't impotent. Its power lies in avoidance. Strip away bananas and beef and a couple other disputes the gorilla has never had to be woken. "trade wars" are never profitable
for either side. Its the presence of a global vs many bilateral pacts that makes the modern trade system workable.
So the power of the WTO, soft power, if you want to call it that lies in the fact that its absence is a HUGE loss of value to the citizens of every participating country. Everyone with a goddamn clue(excluding the USTR because they dont) in policymaking realizes how much of a boon MFN is. Look at modern industrial goods and they all have multiple points of origin. If everyone started to break the rules, the system would collapse. Look how long an issue takes to resolve, something in the line of 5-6 years. Each country could probably file hundreds if not thousands of cases and break the back of the dispute body. So most disputes are handled outside the formal mechanism, and things keep moving smoothly. Any trade disruption causes major ripples across the whole system.
A case at the WTO is like a game of chicken. Two nations drive at each other and discern which car is bigger(who has the best case) and the small one veers off and its over. Except the drive is a long one with a lot of pissing out the window and trash talk. A collision is in no one's best interest. The US is perhaps taking the first ever decision to drive head on into a better case. How ugly
can or how ugly will the WTO make it is kinda like a porno with a plot for trade economists and policymakers. A lot will depend on the other members and how seriously they take the US not observing common courtesy if you will pardon the term. If everyone agrees we are being [censored] and punishes us, the WTO has power. If not, then no. Thats why you see the shuttle diplomacy of Antiguan officials.

[DeadMoneyDad]

[ QUOTE ]
The WTO isn't impotent. Its power lies in avoidance. Strip away bananas and beef and a couple other disputes the gorilla has never had to be woken. "trade wars" are never profitable
for either side. Its the presence of a global vs many bilateral pacts that makes the modern trade system workable.
So the power of the WTO, soft power, if you want to call it that lies in the fact that its absence is a HUGE loss of value to the citizens of every participating country. Everyone with a goddamn clue(excluding the USTR because they dont) in policymaking realizes how much of a boon MFN is. Look at modern industrial goods and they all have multiple points of origin. If everyone started to break the rules, the system would collapse. Look how long an issue takes to resolve, something in the line of 5-6 years. Each country could probably file hundreds if not thousands of cases and break the back of the dispute body. So most disputes are handled outside the formal mechanism, and things keep moving smoothly. Any trade disruption causes major ripples across the whole system.
A case at the WTO is like a game of chicken. Two nations drive at each other and discern which car is bigger(who has the best case) and the small one veers off and its over. Except the drive is a long one with a lot of pissing out the window and trash talk. A collision is in no one's best interest. The US is perhaps taking the first ever decision to drive head on into a better case. How ugly
can or how ugly will the WTO make it is kinda like a porno with a plot for trade economists and policymakers. A lot will depend on the other members and how seriously they take the US not observing common courtesy if you will pardon the term. If everyone agrees we are being [censored] and punishes us, the WTO has power. If not, then no. Thats why you see the shuttle diplomacy of Antiguan officials.

[/ QUOTE ]

Exactly!

The problem for poker is Antuiga is driving a broken big wheel and the US is driving an oversized not SUV but a massive 18 wheeler.

Yes Antigua has the better case but it is about as important here than these two meeting at an intersection and the big wheel rider screaming "but I have the right of way!"

The WTO might indeed in the future teach the US an object lesson, by hanging the US on its own petard, and making it pay in the future for the time worn grease spot in the intersection and might even give credit to Antigua but not intime for poker sadly.


D$D

[JPFisher55]

D$D, I could not disagree with you more. The point is that in legal terms it is Antiqua with the better, bigger car (case). The other nations are confused that the US seems bent on committing suicide and believe that it will swerve at the last minute.
If the US doesn't swerve and a collision occurs, then everyone (WTO) dies and with it the US economy. The last time the world experienced a collapse of the world trading order was in the late 1920's. Then the nations of the world were not nearly so dependent on each other for trade.
OK, some do not think that Smoot-Hartley caused the Great Depression, but most think that it had a role. Do we really want to experience a collapse of the WTO?

[Grasshopp3r]

The WTO has the power of offsetting tariffs, which are being sought by many other countries aside from Antigua. That is really the stick that the WTO wields. The US thought that everyone would simply ignore the opportunity for offesetting damage requests, but they did not. So instead of just tiny Antigua, the US is facing all of the euros and others. The US lost when everyone dog piled. It is only a matter of time until they will undo the UIGEA in the face of the WTO.

[DeadMoneyDad]

[ QUOTE ]
The WTO has the power of offsetting tariffs, which are being sought by many other countries aside from Antigua. That is really the stick that the WTO wields. The US thought that everyone would simply ignore the opportunity for offesetting damage requests, but they did not. So instead of just tiny Antigua, the US is facing all of the euros and others. The US lost when everyone dog piled. It is only a matter of time until they will undo the UIGEA in the face of the WTO.

[/ QUOTE ]

As a US poker player I couldn't hope or wish for more.

The sum total of my life experience tells me the issue isn't that simple nor the solution as easy as suggested.


D$D

[Legislurker]

[ QUOTE ]
D$D, I could not disagree with you more. The point is that in legal terms it is Antiqua with the better, bigger car (case). The other nations are confused that the US seems bent on committing suicide and believe that it will swerve at the last minute.
If the US doesn't swerve and a collision occurs, then everyone (WTO) dies and with it the US economy. The last time the world experienced a collapse of the world trading order was in the late 1920's. Then the nations of the world were not nearly so dependent on each other for trade.
OK, some do not think that Smoot-Hartley caused the Great Depression, but most think that it had a role. Do we really want to experience a collapse of the WTO?

[/ QUOTE ]

Thanks JP. Antigua has the better case/car, the analogy isnt perfect. Smoot-Hawley was just a reflection of what went on in the world at the time. One big thing in trade/intl policy studies in the 90s was that the two great waves of trade deliberalization (1870s and around the Great Depression) led directly to the situations that set up the two world wars. Imagine the problems when oil comes OFF the market. Its bought and sold to countries openly(wiht the exception of China buying exclusivity in Sudan and Nigeria).
Or say copper and asphalt were taken off the world market. Its a [censored] criminal shame that politicians don't unite to fight the force against trade. Sooner or later if the will to keep liberalizing trade isn't there we will go back to colonial/mercantilist trading blocs and wind up coming to blows over commodities. We're THIS close to Brazil and India giving up on the WTO/GATT rounds. If that happens all [censored] will follow.

[Legislurker]

[ QUOTE ]
[ QUOTE ]
The WTO has the power of offsetting tariffs, which are being sought by many other countries aside from Antigua. That is really the stick that the WTO wields. The US thought that everyone would simply ignore the opportunity for offesetting damage requests, but they did not. So instead of just tiny Antigua, the US is facing all of the euros and others. The US lost when everyone dog piled. It is only a matter of time until they will undo the UIGEA in the face of the WTO.

[/ QUOTE ]

As a US poker player I couldn't hope or wish for more.

The sum total of my life experience tells me the issue isn't that simple nor the solution as easy as suggested.


D$D

[/ QUOTE ]

Im not sure anything has ever happened like this before. You said it yourself the WTO has never really had to do this. Im not sure the Bushies even realize what they've done. Of course they still think Christ is coming back before Hillary wins so it won't matter.

[JPFisher55]

Legislurker, I completely agree with you. With the declining dollar and record high gas prices, this is not the time to fool around with WTO system. You're right that the breakdown of the global trading system in the 1920's helped cause the world wide depression which lead to the rise of Adolf Hitler. The last thing we need now is a global depression.
I hate to say this because I am a former Republican. But it seems like the Democrats are the ones to pull the US back from this abyss; and not the fool in the White House.

[rando]

At the end of the day, Repubs and Dems are all the same, we're just being played for fools by those who hold the power. Whoever saves us (if we're saved) be thankful and that's that. Propagation of the two-party polarization is a poison pill we are feeding ourselves.

Great discussion guys, I am going to go ask some folks outside of the poker world if they are even aware of this "high stakes" game with the WTO.

[Legislurker]

No they don't. Ignorance is our national culture.