Axios Leaks Trump Bill To Blow Up World Trade Organization

Following the close of a second quarter that will be best remembered by President Trump's vacillations on trade, Axios has dropped a Sunday night bombshell that may spook markets hoping for a respite from the daily escalating trade war rhetoric as the second half of the year begins: White House reporter Jonathan Swan has obtained a copy of a draft bill, purportedly ordered by Trump himself, that would allow the US to "walk away" from its commitments to the World Trade Organization.

If passed, the bill (entitled the "United States Fair and Reciprocal Tariff Act") would effectively blow up the WTO, an organization that the US helped create back in the 90s, by allowing Trump to unilaterally ignore the two most important principles:

The "Most Favored Nation" (MFN) principle that countries can't set different tariff rates for different countries outside of free trade agreements;

"Bound tariff rates" — the tariff ceilings that each WTO country has already agreed to in previous negotiations.

"It would be the equivalent of walking away from the WTO and our commitments there without us actually notifying our withdrawal," one anonymous source reportedly told Axios.

The bill asks Congress to hand over to Trump unilateral power to ignore WTO rules and negotiate unilateral trade agreements.

The leak of the draft bill follows another WTO-related scoop from Axios, published last week, where Swan reported that Trump has repeatedly badgered his aides about pulling the US out of the WTO, which the president has famously criticized as a "disaster".

The bill's chances of making it through Congress are extremely low. However, if Trump has taught us anything about his trade agenda, it's never say never.

  • "The good news is Congress would never give this authority to the president," the source added, describing the bill as "insane."
  • "It's not implementable at the border," given it would create potentially tens of thousands of new tariff rates on products. "And it would completely remove us from the set of global trade rules."

Trump was reportedly briefed on the draft in late May. Most of the individuals who were involved in the drafting of the bill assumed it would be "dead on arrival" - that is, all but Trump advisor Peter Navarro, who repeatedly encouraged Trump's anti-free-trade positions. The White House, the US Trade Representative and the Department of Commerce were consulted during the drafting of the bill.

While the bill might be able to find enough support to pass in the extremely pro-Trump House, Republican proponents of free trade in the Senate would likely balk at the prospect of trashing the existing free trade order, while Democrats would be reluctant to hand more unilateral authority to the president.

It's also worth noting that Congress is already trying to roll back Trump's steel and aluminum tariffs in the form of a bipartisan bill authored by Republican Sens. Bob Corker and Pat Toomey and Democratic Sen. Michael Bennet.

  • In a White House meeting to discuss the bill earlier this year, Legislative Affairs Director Marc Short bluntly told Navarro the bill was "dead on arrival" and would receive zero support on Capitol Hill, according to sources familiar with the exchange.
  • Navarro replied to Short that he thought the bill would get plenty of support, particularly from Democrats, but Short told Navarro he didn't think Democrats were in much of a mood to hand over more authority to Trump.

White House spokeswoman Lindsay Walters acknowledged that the bill was genuine, but cautioned that the public shouldn't take it too seriously - after all, Trump's frustrations with the WTO are already widely known.

  • But Walters signaled that we shouldn't take this bill as anything like a done deal. "The only way this would be news is if this were actual legislation that the administration was preparing to rollout, but it’s not," she said.
  • "Principals have not even met to review any text of legislation on reciprocal trade."
  • Between the lines: Note the specificity of Walters' quote above. Trump directly requested this legislation and was verbally briefed on it in May. But he hasn't met with the principals to review the text.

The report sent US futures lower off the gate as trade tensions once again reared their ugly head, although the BTFDers promptly emerged, and with their traditional non-challance and disregard for risk or news, quickly sent futures back to unchanged.

Dismantling the WTO risks sparking a global trade war, which could have some very serious consequences.

Trade

Read the draft bill below:

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Comments

dirty fingernails NidStyles Sun, 07/01/2018 - 20:04 Permalink

Wow, and yet another push for the executive office to have more unilateral power. Huh, that's never happened before, right? Hahahaha MOAR NEOCONS

To my downvote trolls: have you forgotten the whole point of checks and balances? Nope, you fucksticks back the unitary executive position like good neocons.

In reply to by NidStyles

NidStyles nmewn Sun, 07/01/2018 - 20:53 Permalink

Exactly. The WTO has never supported Americans or American industry. It was a struggle to get them to buckle on Asia, but to finally get something done about their interference here in the US is a relief.

Get this done, then focus on the UN.

 

I am not worried about my reputation Schlomo. You’re the reason I am doing this. 

In reply to by nmewn

JimmyJones wadalt Sun, 07/01/2018 - 21:31 Permalink

He's asking for  everything so that he can get the things he wants. "What do you want?" "I want it all" "You can't have it all, will you settle for less?" "Yes" "Ok this is what we are willing to give you" .... And the horse trading continues

In reply to by wadalt

BigJim nmewn Mon, 07/02/2018 - 05:10 Permalink

Yes. 

Either way, it puts the world on notice that we are now in fact, officially, unabashedly America First or he's just flushed out another one but the intent is the same, America First.

Stunningly honest really, for a "novice" politician ;-)

Right. Because giving US lobbyists the power to slap even higher tariffs on selective imports is going to be good for the average American consumer.

As Triffin pointed out, the US has to run a trade deficit if it's to issue the world's reserve currency.

When the US' WRC status ends, the USD will implode.

Frankly, the US is fucked either way, so, sure, bring on the trade wars, they worked so well with Smoot Hawley.

In reply to by nmewn

josecanyousee nmewn Mon, 07/02/2018 - 09:11 Permalink

" Stunningly honest really, for a "novice" politician ;-) "

Yes, America first! The Trumpster is "stunningly honest" because he's NOT a career politician. What he is rather is a skilled executive and businessman, but one with America first values. There's plenty of 'politics' , maneuvering, power-plays and intrigue in the big business world and my President has shown he is skilled at it. Now he brings it, and I mean he brings it, to the world of global politics with the intent to bring America back. May God continue to protect him from the powers that may soon no longer be, because they are in a frenzy! MAGA!

In reply to by nmewn

Oldwood dirty fingernails Sun, 07/01/2018 - 20:19 Permalink

"who repeatedly encouraged Trump's anti-free-trade positions."

That there's funny....free trade. When did we ever have THAT!

We have become adapted to the notion that WAR is bad because WE (Americans) are to often the aggressor, but inevitably WAR is violence in response to aggression.

In this case America has been under attack for decades now, made possible by politicians bought and paid for. We must push back, and if that means war, so be it.

In reply to by dirty fingernails

NidStyles dirty fingernails Sun, 07/01/2018 - 23:22 Permalink

What a surprise, something that is good for the tribe might actually be good for the rest of humanity as well. Like their self-sufficiency instead of relying on these extra governmental organizations that only seem to benefit their agendas for the rest of us.

Let go of your emotions and step back to think about the impact of some of these organizations. None of them have lived up to their promises. None of them have once made the world better off. All they have done is lower the bar and create economic turmoil.

In reply to by dirty fingernails

DemandSider dirty fingernails Mon, 07/02/2018 - 03:40 Permalink

The PRC claims to be a free and fair trading nation, but with their CCP government owned manufacturing inputs and huge tariffs on manufacturing imports, they really aren't. The WTO, Wall Street, and The PRC all share the blame for allowing this trade to get so dangerously unbalanced. Or we could go back to Bretton Woods and blame the morons who refused to listen to Keynes and his bancor option. He understood, even then, the dangers of one country's currency becoming the reserve currency, and trade imbalances.

In reply to by dirty fingernails

Endgame Napoleon Kurpak Sun, 07/01/2018 - 21:57 Permalink

He is probably talking about people, making a living off of manipulating interest and then, once some money has accumulated, getting really rich off of compound interest. People have probably done this since the beginning of civilization, but some seem to be suggesting that the now-vanquished middle class and the working class do not work for a living.

To be accurate, they should be distinguished from the welfare-buttressed class of citizens & noncitizens whose living is, in large part, supplied by the state to reward them for womb productivity, with part-time work that keeps them under the income limit for welfare adding icing to the cake crumbs thrown to the womb producers by the rentier class.

As nice as it is for the rentier class and those at the bottom paid by government to have sex & reproduce, this system is not working for most Americans. People know this is a rigged system where hard work does not pay.

Which is why 101 million working-age citizens are out of the workforce. All of the 42 million “employed” and womb-productive persons qualified for EBT (and other welfare) are working part time, whereas most of the 78 million gig pieceworkers are likely working far more hours than any of these groups, including the rentiers, to barely make ends meet (if they even meet), specifically if they are holding other jobs. 

The Social Security trust fund is no longer running surpluses in this situation where work no longer pays. It seems like an obvious point—not requiring the analytical or math talent of the rentier class—to conclude that the simple math of offshoring 5 million breadwinner jobs and potential SS contributions to racially homogenous countries in Asia and Latin America, which have vast pools of workers who can accept minuscule wages, has gutted the US middle class. 

The WTO is a symbol of this ransacking.

Hard to say whether its dismantlement would distract the underemployed Deplorables from the lack of progress on mass-scale, welfare-buttressed immigration, the thing that put Trump in office since it has such a bigly impact on who gets what is left of the jobs in the USA and what those jobs pay.

Womb-prolific & welfare-eligible immigrants can often afford to work cheaply due to their pay-per-birth well-baby plan from Uncle Sam, which includes everything from free rent & free food to refundable child tax credits up to $6,431. It is the first phase of the plan to destroy the US middle class and the one with the most immediate impact. 

Not enough of an expert to know how the WTO demolition would impact the ability of other countries to get together on currency, putting the dollar in an inferior position, with the result being more globalism as described in the following article, even as the symbols of globalism, like the WTO, were destroyed. The trade agreements concocted by such organizations have not benefited the US middle class, so my impulse would be to say, yes, break up the Establishment tool. But a vacuum would form, and you have to wonder if the globalists would just try to fill it up with even sneakier, behind-the-US’s-back globalist maneuvering. 

https://www.zerohedge.com/news/2018-06-28/brandon-smith-trade-war-provides-perfect-cover-elitist-engineered-global-reset

 

In reply to by Kurpak

nmewn dirty fingernails Sun, 07/01/2018 - 20:24 Permalink

As if ObaMao didn't push the envelope far beyond the Constitution by not even allowing the Legislative Branch read what was in the TPP "Agreement"? 

You do realize THAT WAS ObaMao, right? ;-)

/////

"To my downvote trolls: have you forgotten the whole point of checks and balances? Nope, you fucksticks back the unitary executive position like good neocons."

I am one your down voters for the reasons listed. Where were you when ObaMao was trying to cram through TPP? 

In reply to by dirty fingernails

dirty fingernails nmewn Sun, 07/01/2018 - 20:28 Permalink

I must have missed where I said Obama restored the constitution and was law abiding. Apparently you dumbfucks can't seem to remember the Partiot Act was the first bill presented that had to be passed in order to find out what was in it. Your selective memories piss me right off. Obama was W's 3rd and 4th terms. Same shit now, just a new flavor.

In reply to by nmewn

nmewn dirty fingernails Sun, 07/01/2018 - 20:47 Permalink

So, you're using company time (on a Sunday) to post on ZH, ObaMao was your savior but took the easy way out and didn't go full non-Constitutional retard (even though thats EXACTLY what he did) and now like every other snowflake ever encountered on the net you scream NEOCON...NAZI...Trump-Hitler-Putin...UNCONSTITUTIONAL!...at the drop of your pussyhat and you know by now that I am not on SSI...which is just another attempt at diversion from the topic.

I guess that about covers it ;-)

In reply to by dirty fingernails