We can use this as an initial document for meeting notes and updates, then create other docs when necessary.

Stakeholder:  World Trade Organization (WTO)

–

Mission Brief

Situation:  Trade War (US tariff on Chinese products and vice versa)

You as an agent of the World Trade Organization need to address the following questions:

1. Who are our allies and adversaries in the debate
   1. The WTO has no allies or adversaries, as it seeks to mediate trade and trade disputes among the international community. In the debate, the WTO seeks to create a peaceful de-escalation of the trade war between the United States and China with German assistance. Brandon
2. What statements could other stakeholders have 
3. Explain the mission of the WTO. – Valeria 
   1. The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to ensure that trade flows as smoothly, predictably and freely as possible.
   2. https://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm
   3. https://www.wto.org/english/thewto_e/whatis_e/what_stand_for_e.htm
4. How does the Trade War contradict the mission of the WTO? -Harshdeep
   1. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds543_e.htm
   2. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds565_e.htm
   3. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds563_e.htm
   4. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds562_e.htm
   5. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds558_e.htm
   6. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds544_e.htm
   7. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds542_e.htm
5. When and Why was the WTO established?  What is its purpose? – Tessa 
   1. The WTO was established on 1 January 1995. 
   2. The WTO was born out of the General Agreement on Tariffs and Trade (GATT), which was found in 1947. Before World War II (WWII) there was no forum for global trade negotiations or procedures for settling disputes. As a consequence there was a desire for peace and security after this war, so the GATT was established. This agreement was part of the Bretton Woods system, including the World Bank and the International Monetary Fund (IMF). The GATT mainly dealt with trade in goods and in 1995 the WTO replaced GATT as a global trading system. The WTO also covered trade in services and intellectual property. 

https://www.investopedia.com/investing/what-is-the-world-trade-organization/

https://www.wto.org/english/thewto_e/history_e/history_e.htm

1. The purpose of the WTO is to open trade for the benefit of all and to ensure that global trade commences freely and smoothly. 

https://www.investopedia.com/investing/what-is-the-world-trade-organization/

1. When did the Trade War initiate? How and why? -Harshdeep
   1. In January of 2018, the United States began imposing tariffs on imported goods in an effort to support local businesses and the national economy. The belief was that consumers would “buy American” if foreign goods became more expensive. (https://www.bbc.com/news/business-44529600) A misunderstanding between the two countries about the other’s motives has led to tit-for-tat tariff retaliations with neither side willing to budge. President Trump has alleged that there have been “unfair transfers of American technology and intellectual property to China” and that U.S. firms have had restricted access to the Chinese market. Mr. Wang Huiyang, president of the Centre for China and Globalisation, defended China stating, “All the major US companies are in China. Some are even bigger here than they are in the US. You can’t say that is not a success.” (https://www.bbc.com/news/business-45556345) To date, more than $250 billion worth of tariffs have been imposed by the U.S. on Chinese goods, and $110 billion worth of tariffs have been imposed by China on U.S. goods.  (https://www.bbc.com/news/business-45899310)
   2. https://www.cfr.org/blog/us-china-trade-war-how-we-got-here 
   3. https://www.bloomberg.com/news/articles/2019-01-30/u-s-china-trade-war-timeline-what-s-happened-and-what-s-next 
2. How does the WTO view the situation regarding the trade war between the US and China? -Rasmus
   1. T

http://tass.com/politics/1026704

1. Look for other countries
2. https://www.theguardian.com/business/2018/sep/19/wto-head-offers-to-mediate-between-china-and-us-over-trade-war
3. https://www.bbc.com/news/business-45899310
4. https://foreignpolicy.com/2018/10/19/the-trade-war-has-claimed-its-first-victim/
5. http://www.chinadaily.com.cn/a/201808/28/WS5b8491eca310add14f3880fc.html
6. What capabilities or tools does the WTO have to mitigate a trade war?
   1. https://www.cato.org/publications/policy-analysis/disciplining-chinas-trade-practices-wto-how-wto-complaints-can-help
   2. https://www.ft.com/content/84d54206-30ac-11e8-ac48-10c6fdc22f03
   3. The WTO insists that it is not an international court, with its focus on settling disputes through negotiations. WTO can impose trade sanctions on countries that ignore its rulings, but it provides little detail on how such sanctions can be applied. https://news.cgtn.com/news/78417a4e326b7a6333566d54/share_p.html 
7. Has the WTO intervened in other trade wars? Nick
   1. https://www.nytimes.com/2003/11/11/business/us-tariffs-on-steel-are-illegal-world-trade-organization-says.html 
      1. The 2002 Steel Tariff
   2. https://www.history.com/news/7-trade-wars-boston-tea-party-smoot-hawley 
      1. The 1993 Banana Wars
8. Does the WTO always promote free trade?  Under what circumstances would they promote trade restrictions? -Harshdeep
   1. For the most part, the WTO does promote free trade. “[It] is sometimes described as a “free trade” institution, but that is not entirely accurate. The system does allow tariffs and, in limited circumstances, other forms of protection. More accurately, it is a system of rules dedicated to open, fair and undistorted competition.” (https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm) Its most-favored nation (MFN) principle states that countries cannot discriminate between their trading partners. “In general, MFN means that every time a country lowers a trade barrier or opens up a market, it has to do so for the same goods or services from all its trading partners — whether rich or poor, weak or strong.” (https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm) Nevertheless, there exist circumstances under which the WTO would promote trade restrictions. For example, it permits trade restrictions that promote the protection of the environment. The WTO grants every member nation the freedom to establish its own level of protection as it deems appropriate. Still, it demands that members remain consistent with their embargos. “If a country bans the importation of asbestos from another, for example, it must ban asbestos imports from all countries, as well as banning domestic sales.” (https://www.wto.org/english/tratop_e/envir_e/bkgrnd_climate_e.pdf) Further, a nation can raise trade barriers against certain goods if it believes that specific nations are trading those goods unfairly. It can also allow special access to its markets to developing nations, and it can set up an FTA that allows for goods to be traded only within a specific group, thereby discriminating against goods from outside. (https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm ) When there exists a “threat to national security,” the WTO’s free trade rules do not apply. (https://news.cgtn.com/news/78417a4e326b7a6333566d54/share_p.html) 
   2. https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm 
      1. “Some exceptions are allowed. For example, countries can set up a free trade agreement that applies only to goods traded within the group —   discriminating against goods from outside. Or they can give developing countries special access to their markets. Or a country can raise barriers against products that are considered to be traded unfairly from specific countries. And in services, countries are allowed, in limited circumstances, to discriminate. But the agreements only permit these exceptions under strict conditions. In general, MFN means that every time a country lowers a trade barrier or opens up a market, it has to do so for the same goods or services from all its trading partners — whether rich or poor, weak or strong.”
      2. “The WTO is sometimes described as a “free trade” institution, but that is not entirely accurate. The system does allow tariffs and, in limited circumstances, other forms of protection. More accurately, it is a system of rules dedicated to open, fair and undistorted competition.”
   3. https://www.wto.org/english/tratop_e/envir_e/bkgrnd_climate_e.pdf 
      1. “The WTO rule book permits governments to restrict trade when the objective is protecting the environment. The legality of such restrictive measures depends on a number of conditions including whether they constitute justifiable discrimination. These measures should not constitute disguised protectionism.”
      2. “Every member is free to determine its appropriate level of protection but must do so in a coherent manner. If a country bans the importation of asbestos from another, for example, it must ban asbestos imports from all countries, as well as banning domestic sales.”
      3. the WTO has a term, ratified by all of its members, that states its rules on free trade do not apply when there is a “threat to national security,” without going into further details on what that constitutes. https://news.cgtn.com/news/78417a4e326b7a6333566d54/share_p.html 
9. What actions do you think the WTO will take to address the US/China trade war? – Brandon
   1. https://www.nytimes.com/2018/09/24/opinion/us-china-trade-war-tariffs-wto.html
      1. The WTO must urge the United States to stop blocking the appointment of new judges to the WTO’s Appellate Body, which primarily dictates trade disputes.
      2. The United States has always had the rare privilege of having at least one American on the Appellate Body, and as such, should consider stopping the belief that the US loses trade disputes due to a lack of American presence in the Body
   2. https://www.reuters.com/article/us-usa-trade-wto/u-s-blocks-wto-judge-reappointment-as-dispute-settlement-crisis-looms-idUSKCN1LC19O
      1. Currently, there are only three judges, the minimum amount for the Appellate Body to function, whereas there are normally seven.
      2. If the US could agree to the appointment of four new, international judges independent of both countries within the summer, the WTO Appellate Body can more effectively research and determine a course of action and desired outcome for the trade war
   3. https://www.reuters.com/article/us-usa-trade-wto/trumps-tariffs-head-for-a-legal-minefield-idUSKCN1GS1KL
      1. The US must look to refrain from circumventing and breaking WTO policies by invoking the “national security” clause under Section 232 of the 1962 U.S Trade Expansion Act.
      2. In this regard, the WTO’s ‘General Agreement on Tariffs and Trade’ allows an exemption from its rules if a country declares its action towards “national security.” Donald Trump recently enacted this clause to levy 25% tariffs on US steel imports and 10% on aluminum without informing the WTO
      3. As such, the WTO urges the United States to discontinue its abuse of the “National Security” clause and look to impose tariff and trade regulation solely through the WTO and its Appellate Body. The WTO will thus look to de-escalate the former acts 
10. As a delegate of the WTO, what would you propose be done about the trade war between the US and China?  Niannu
11. What are the issues behind the war?  – Nick
    1. https://www.scmp.com/news/china/diplomacy/article/2174419/china-and-us-hurl-claims-hypocrisy-each-other-trade-war
       1. US President Donald Trump has outraged US trading partners by erecting a tariff wall against importers of steel and aluminum – justified by US national security concerns – and has hit cinese goods with huge tariffs over accusations of stealing US intellectual property 
    2. https://www.bbc.com/news/world-43512098
       1. US President Donald Trump reckons trade wars are “good” and easy. He’s not afraid to raise tariffs.
       2. Mr Trump also wants to cut the trade deficit with China – a country he has accused of unfair trade practices since before he became president.
       3. Mr Trump made a big point on the campaign trail about cutting the country’s trade deficits…. He’s convinced it hurts US manufacturing, and has said time and time again on the stump and on Twitter that the US must do more to tackle them.
       4. The Trump administration claims the US relies too much on other countries for its metals, and that it couldn’t make enough weapons or vehicles using its own industry if a war broke out.
       5. The world’s second-largest economy has taxed US agricultural and industrial products, from soybeans, pork and cotton to aeroplanes, cars and steel pipes.
    3. https://www.bbc.com/news/business-45899310
       1. The US launched an investigation into Chinese trade policies in 2017. It imposed tariffs on billions of dollars worth of Chinese products last year, and Beijing retaliated in kind.
       2. Tariffs, in theory, make US-made products cheaper than imported ones, and encourage consumers to buy American.
       3. Beijing hit back with tariffs on $110bn of US goods, accusing the US of starting “the largest trade war in economic history”.
12. What are the 2 countries trying to accomplish by imposing barriers to trade? – Valeria 
    1. US
       1. U.S. President Donald Trump said trade wars were “good, and easy to win” in March as he started a dispute with China that has seen its administration impose tariffs on steel, aluminum and various Chinese products. 
       2. Figures on U.S.-China trade put China’s disadvantages into sharp relief. According to UN figures, the United States depends on China to buy only some 8% of all U.S. exports, whereas China depends on the United States to buy almost one-quarter of all its exports. U.S. goods and services constitute only some 7.3% of all Chinese imports, whereas Chinese products account for over 21% of all American imports.
       3. What these figures say is that a cession of trade would hurt China’s real economy much more than it would the U.S. economy. And indeed, the Standard and Charter Bank of Hong Kong, clearly close to the situation from the Asian side, estimates that the existing 10% tariffs imposed by Trump will slow Chinese economic growth some 0.4 percentage points next year, and if Trump raises the tariffs to 25% on January 1 as planned, it will cut China’s real growth pace 0.6 percentage points, not a small disruption even an economy growing 6-6.5% a year. Meanwhile, a consensus of economists here in the States estimates that the tariffs imposed by China on U.S. products will slow this economy a mere 0.1-0.2 percentage points.
       4. These figures also say that China will have an increasingly hard time matching the U.S. tariffs dollar-for-dollar, as Beijing has tried to do so far in this dispute. Indeed, the problem has already arisen. The recently announced 10% tariffs will fall on some $200 billion of Chinese products imported into this country. China has countered with 5-10% tariffs on $60 billion worth of American products entering that country. This latest raft of Chinese tariff making has brought the total on which China has raised duties to $110 billion, awfully close to the $150 billion total that country imports from the United States. Beijing is loath to burden the other $40 billion of U.S. imports because they consist of semiconductors and other components essential to China’s huge output of assembled electronics.
       5. https://www.forbes.com/sites/miltonezrati/2018/10/03/trade-war-from-the-chinese-side/#625688b26e10 
    2. China
       1. The ECB study simulates a 10 percent U.S. tariff on all imports and an equivalent retaliation from other countries. It suggests the United States would bear the brunt of diminished trade and of damage to consumer and investor confidence.
       2. “Estimation results suggest that the United States’ net export position would deteriorate substantially,” the ECB said in the study. “In this model, U.S. firms also invest less and hire fewer workers, which amplifies the negative effect.”
       3. 
       4. The ECB estimates U.S. growth would be cut by more than 2 percentage points. The International Monetary Fund currently expects the U.S. economy to expand by 2.9 percent this year and 2.7 percent the next.
       5. By contrast, China would gain by exporting more to third countries where U.S. goods are subject to tariffs, although that slight gain would be temporary and partly offset by a negative effect on confidence.
       6. The ECB model is purely theoretical; it does not replicate actual trade conditions. The United States has imposed tariffs on $200 billion of Chinese goods and China has retaliated with tariffs on $60 billion of U.S. goods. 
       7. https://www.reuters.com/article/us-usa-trade-ecb/u-s-has-most-to-lose-from-trade-war-china-would-benefit-ecb-idUSKCN1M60XB
13. Will this tit for tat strategy work?  – Nick
    1. https://www.livemint.com/Politics/78YKGldxbKUlNTFqYEB1OP/Top-5-infamous-trade-wars-in-history.html 
       1. The Banana Wars of 1933
          1. To restrict import of Bananas to its colonies in Africa and Caribbean, Europe imposed heavy tariffs on import of Latin American bananas in 1993.
          2. Since the US companies own most of the banana farms in Latin America, the US filed eight separate complaints in the WTO
          3. After filing eight complaints with the World Trade Organization, the European Union, in 2009, agreed to gradually ease the tariffs, and, in 2012, the banana war finally ended
          4. Tactic worked, war eventually ended peacefully
    2. https://www.history.com/news/7-trade-wars-boston-tea-party-smoot-hawley
       1. The Smoot-Hawley Act of 1930
          1. President Herbert Hoover originally set out to deal with a farm crisis during the early years of the Great Depression, proposing tariffs on agricultural imports. But Senators Reed Smoot and Willis C. Hawley offered their own legislation, and added a slew of industrial tariffs. The world responded with tariffs on U.S. exports, adding more strain to the already-devastated economy.
          2. Considered a disaster by many…It contributed to U.S. exports falling by 61 percent in 1933, and stalled economic recovery during the Depression.
          3. Tactic did not work, harmed both parties
       2. The Chicken Tariff War of the 1960s
          1. With the rise of mass-produced, factory chicken farming in America, the world responded by buying up cheaper U.S. poultry, and chicken imports in Europe soared. That didn’t sit well with France and West Germany, who imposed tariffs on the birds, leading to big losses in the U.S. poultry industry.
          2. The United States, led by President Lyndon Johnson, fought back with a 25 percent tax on “light trucks,” including Volkswagen buses, French brandy, potato starch and dextrin.
          3. The Japanese auto industry also took a big hit from the tax, which remains on light trucks. Some brands, including Toyota and Isuzu, have found loopholes, such as erecting assembly plants on U.S. territory, to circumvent them.
          4. Tactic did not work, harmed both parties
14. Should the WTO intervene or will the US and/or Chinese governments alter their perspectives regarding trade restrictions?  
    1. Yes
       1. Global trade, meanwhile, could fall by up to 3 percent relative to the baseline. 
       2. The Trump Administration is not working, rather consciously, fully within the framework of the World Trade Organization. The big cases—the 301 versus China, the (coming?) 232 versus autos—are being pursued through U.S. law, and they will be subject to a challenge in the WTO. An alternative strategy—challenging China in the WTO for violation of its WTO commitments—hasn’t been the administration’s focus.
    2. No
       1. For understanding trade law, I rely on the work of others. A trade war[1] is, among other things, a legal process—at least in the United States. Congress has delegated a lot of authority over the regulation of international commerce to the executive branch, which has given the Trump Administration a lot of latitude. But Trump and his team are still working within the framework of U.S. trade law (“232s”, “301s,” “201s,” etc.).
       2. https://www.cfr.org/blog/us-china-trade-war-how-we-got-here 
    3. https://www.scmp.com/news/china/diplomacy-defence/article/2155640/china-us-trade-dispute-what-role-can-world-trade
15. You will need to form a vision surrounding the outcome of the trade war and its implication to the US and Chinese economies.  In particular the role of the WTO in supporting its mission and what actions should be taken? 
    1. https://www.imd.org/research-knowledge/articles/why-america-would-lose-a-trade-war-with-china/
    2. https://www.cnbc.com/2019/02/12/a-blueprint-for-trading-the-different-trade-war-outcomes.html
    3. https://ihsmarkit.com/solutions/us-china-trade-war-impacts.html
16. After creating a vision, the goal is to come up with a response to the current situation.
17. How does the WTO respond to US/China trade war? 
    1. https://www.theguardian.com/business/2018/sep/19/wto-head-offers-to-mediate-between-china-and-us-over-trade-war 
18. What about other countries?  
    1. https://www.wto.org/english/thewto_e/whatis_e/10thi_e/10thi09_e.htm 
19. What is the WTO’s responsibility in protecting other countries?
    1. https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm7_e.htm