Trump administration preparing to ignore WTO rulings it doesn’t like

Draft document sent to Congress indicates intention to sidestep World Trade Organisation (WTO) any rulings President regards as an affront to US sovereignty

President Donald Trump signing executive orders at the White House (Andrew Harnik/AP)

US President Donald Trump's administration is preparing to ignore any rulings by the World Trade Organisation (WTO) that it sees as an affront to US sovereignty, the Financial Times reported on Tuesday, citing a report prepared by officials.

The draft document, due to be sent to the US Congress on Wednesday, marks the first time the new administration has laid out its trade plans in writing, the Times said.

“Ever since the United States won its independence, it has been a basic principle of our country that American citizens are subject only to laws and regulations made by the US government - not rulings made by foreign governments or international bodies,” the report said, according to the Times.

“Accordingly, the Trump administration will aggressively defend American sovereignty over matters of trade policy,” the report said, according to the Times.

The Wall Street Journal, which also said it reviewed the document, said the policy represents a dramatic departure from the Obama administration, which emphasised international economic rules and the authority of the WTO, a body that regulates trade and resolves disputes among its members.

By contrast, the Trump administration will more assertively defend US sovereignty over trade policy, ramp up enforcement of US trade laws, and use “all possible sources of leverage to encourage other countries to open up their markets,” the document said, according to the Journal.

The White House did not immediately respond to a Reuters request for comment.

Congress requires the president to submit the administration's trade policy annually by March 1.

In the face of Republican concerns, a congressional aide said language in the draft challenging the WTO could still be toned down in a final, public version, the Journal reported.

Washington is facing several important WTO decisions, particularly involving China. Potentially the most important is a WTO complaint filed in December by Beijing against the EU and the United States for blocking China's request to be treated as a “market economy” under the institution's rules.

A final ruling could still be years away. But were the US to ignore a finding in China's favour it could have major consequences for the WTO as a venue for resolving trade disputes before they fester into destructive trade wars, the Times said.

Reuters