Donald Trump may have been ridiculed as the president who “always backs down”, but at the recent gathering of world trade ministers in Paris, the message from Washington was crystal clear: the United States is forging ahead alone.
With the OECD annual meeting serving as a backdrop, the world’s top trade ministers came together to address the challenge at hand. While publicly defending and discussing reforms to the multilateral “rules-based” system, behind closed doors at the OECD’s elegant Parisian château, a sense of gloom prevailed. Governments are actively seeking deals with Washington, but outside a global system that is under immense pressure.
“The US stance was clear: ‘We have a significant trade deficit to tackle; what matters is our unilateral power, which we possess,” shared a diplomat who participated in meetings with the US trade representative Jamieson Greer. “This is the new world order, so you better accept it.”
During discussions on revamping the World Trade Organization, the mood was equally challenging. Instead of proposing specific changes, the organization’s director-general Ngozi Okonjo-Iweala urged attendees to suggest areas where their governments could compromise.
However, there was silence from the ministers, as one participant recalled. “We are no closer to a resolution than before the meeting,” they lamented. “The US claims that the multilateral process has failed and its unilateral approach is effective, while India continues to block reform as it has for the past decade.”
The US’ unilateral approach to tariffs and its pressure on countries to negotiate deals has already unsettled the global economy. The OECD cautioned that the Trump-led trade war could push global growth to its lowest levels since the Covid-19 pandemic, with the US facing substantial economic repercussions.
“The weakened economic outlook will have a global impact, affecting almost every nation,” warned Álvaro Pereira, the OECD’s chief economist, stressing the urgent need for countries to strike agreements to reduce trade barriers, or face “massive” consequences.
Despite ongoing negotiations with trade partners to avoid reciprocal tariffs imposed in April, the Trump administration remains resolute. The Office of the US Trade Representative recently sent reminders to countries to submit offers to the White House before the impending deadline.
Experts note that Trump’s pursuit of nonbinding deals with individual nations, starting with the UK, raises fundamental questions about the WTO’s viability — a pressing issue discussed at the Paris summit.
“By establishing nonbinding ‘deals,’ the US implies that the trading system can function without robust multilateral commitments or a mechanism for dispute resolution,” observed Inu Manak, a trade policy fellow at the Council on Foreign Relations in Washington.
Efforts to reform and modernize the 166-member WTO have faced obstacles, with little progress made. At the Paris conference, trade ministers, including Greer, deliberated on the WTO, underscoring the uphill battle for change.
While ministers hesitated to suggest compromises, some viewed Trump’s return as a catalyst for reform. “It’s the notion that a crisis should prompt action,” remarked one minister.
They highlighted Greer’s support for the WTO’s ecommerce moratorium, set to expire next year, as a sign of Washington’s continued engagement.
Following the summit, UK trade minister Jonathan Reynolds commended the US’ proactive approach, noting its potential to galvanize a WTO round of talks. “The US is essentially pushing for a global WTO dialogue, leveraging its influence to do so,” Reynolds emphasized.
Costa Rica’s trade minister Manuel Tovar Rivera, who chaired the OECD meeting, expressed optimism about reform discussions gaining momentum. He lauded Greer’s participation as a positive sign of commitment.
Despite challenges, trade ministers acknowledged the imperative for change. “There are significant disagreements, particularly regarding tariffs and their application,” noted Australia’s trade minister Don Farrell.
South Africa’s trade minister Parks Tau acknowledged the US’ recognition of the importance of elements of multilateralism. “The US acknowledges that the current system has disadvantaged them and needs a reset, but they also see the value in a framework for engagement,” Tau remarked.
“The specifics of that framework,” he added, “are still uncertain to all of us.”