US Eschews Multilateralism in Favour of America First Policy

US Commerce Secretary Wilbur Ross launched a scathing rebuke against IMF head Christine Lagarde who accused the US administration of protectionist measures. Wilbur Ross, the billionaire investor whom Trump tasked with heading the Commerce Department, has pooh-poohed comments by Lagarde and other European organizations accusing the Trump White House of pursuing protectionist measures. In his defense of current US policy, Ross pointed to Japan, China, and Europe as examples of staunch protectionist economic systems. Given the economic realities, Ross has a certain degree of credibility. The US is currently in deficit to the tune of $500 billion, and the beneficiaries of this are Japan, China and Europe. For his part, Commerce Secretary Ross does not believe that the US should remain in deficit while other nations enjoy trade surpluses and continue accusing the US of adopting protectionist measures. The multilateralism that Lagarde touts appears to fly in the face of reality, given the high tariffs and barriers to free trade that are inherent to non-member countries of the European Union et al. According to Wilbur Ross, ‘… We also have trade deficits with all three of those places… But in fact what they practice is protectionism.’ The president of the World Bank, Jim Y. Kim and the head of the IMF, Christine Lagarde are likely to push for multilateralism and warn against protectionism at a series of meetings in Washington DC this coming week.

TPP is Dead but New Bilateral Agreement with Japan on the Table

For its part, the Trump administration will be reducing US contributions to the World Bank and to the United Nations. This is part of a series of cost-cutting initiatives aimed at putting America’s interests first, while ensuring that other nations contribute their fair share to the UN, NATO and the World Bank. The US is currently engaged in detailed negotiations with Mexico and Canada to renegotiate the terms of NAFTA, and the US is attempting to reduce the trade deficit with the world’s second-largest economy, China. After the United States pulled out of the Transpacific Partnership (TPP), the country is looking to Japan for a bilateral trade agreement. The US is going to hold Japan to various concessions it has made in draft agreements on a new trade policy.