The Trump administration has put U.S. funding for the World Trade Organization (WTO) on hold pending a review of the body’s impact on U.S. interests, Reuters reported Friday.
The news agency wrote:
A U.S. delegate told a March 4 WTO budget meeting that its payments to the 2024 and 2025 budgets were on hold pending a review of contributions to international organizations and that it would inform the WTO of the outcome at an unspecified date, two trade sources with direct knowledge of the meeting said.
A third trade source confirmed their account and said the WTO was coming up with a “Plan B” in case of a prolonged funding pause, without elaborating.
All three sources asked for confidentiality because the budget meeting was private and the U.S. funding pause has not been formally announced.
The WTO’s 2024 budget was about $232 million, of which the United States was expected to pay roughly 11 percent based on its share of global trade. According to a February 21 WTO document marked “RESTRICTED” that Reuters obtained, the United States still owed $25.7 million as of the end of 2024.
Explained Reuters:
Under WTO rules, any member that fails to pay its dues after more than a year is subject to “administrative measures” — a series of punitive steps that get progressively stricter the longer the fees go unpaid.
The country is now classified as being in the first of three such categories, two of the trade sources confirmed to Reuters, which means its representatives can no longer preside over WTO bodies nor receive formal documentation.
Pause in Review
Although the funding pause has not yet been announced by the administration, it would seem to be in line with President Donald Trump’s professed desire to rein in or even leave global institutions that he believes act contrary to U.S. interests. He has already withdrawn from some UN agencies — thereby starving them of U.S. taxpayer dollars — along with the World Health Organization and Paris climate agreement.
A State Department spokesperson told Reuters that “funding for the WTO, along with other international organizations, is currently under review” pursuant to a Trump executive order directing Secretary of State Marco Rubio “to determine if” international organizations to which the United States belongs “are contrary to U.S. interests.”
A U.S. Trade Representative (USTR) official echoed this explanation, adding, “USTR is coordinating with the State Department as it relates to the WTO.”
In comments to Reuters, WTO spokesman Ismaila Dieng agreed that U.S. payments to the organization had simply been “caught up in the pause of all payments to international agencies.”
He said:
Generally, arrears can impact the operational capacity of the WTO Secretariat. But the Secretariat continues to manage its resources prudently and has plans in place to enable it to operate within the financial limitations imposed by any arrears.
WTO SmackDown
Trump has been at odds with the WTO since his first term. In 2017, he began blocking judicial appointments to the WTO’s highest appeals court, contending that it had issued rulings beyond its mandate and in opposition to U.S. interests. Two years later, he refused to support a proposal to allow the court to continue to operate.
According to the Daily Caller:
A major sticking point continues to be China’s continued classification as a “developing country” at the WTO — a designation that entitles Beijing to a host of special trade and financial privileges. Despite being the world’s second-largest economy, China receives extended compliance timelines, reduced dues and billions in World Bank loans usually reserved for poorer nations.
Cutting off the WTO’s funding may give Trump leverage to rectify the situation. The WTO may be able to function for a short time under an 11-percent budget cut. Sooner or later, though, it is likely to approach Uncle Sam with its hand out, at which point Trump can dictate the terms of turning the spigot back on.
Trump does not appear to be contemplating exiting the WTO at this point. Former Commerce Department official William Reinsch, now a senior adviser at the Center for Strategic and International Studies, told Reuters he expected U.S. funding eventually to be restored, noting that Trump had nominated an ambassador to the WTO. Why would he do that if he intended to leave?
World Tyranny Organization
In 2018, The New American observed:
While it is commendable that the Trump administration is attempting to mitigate the control of the WTO over our country, as long as the WTO exists, and the United States remains a member of it, the threat to our continued status as a sovereign nation is very real.
Indeed, the WTO has done far more to harm America than just issuing some adverse rulings in trade disputes. Its decisions, which often exceed its delegated authority, “have struck down U.S. laws and regulations regarding the formulation of gasoline, sections of the Internal Revenue Code, certain environmental protections, and much more,” Washington law firm Wiley Rein LLP wrote in 2017.
“The WTO,” the firm contended, “is increasingly becoming a dispute resolution forum where activist members of an international institution are creating new, non-negotiated, obligations for member states.”
Trump should not merely pause U.S. funding to the WTO. He should also urge Congress — which bypassed the Constitution’s requirement of a treaty-ratification vote in the Senate to join the WTO but can also leave it via a joint resolution — to beat a hasty retreat from it.
