US proposes WTO reforms likely targeting China

The United States has proposed World Trade Organization reforms that would punish members for violating basic rules, in what appears to be another move by Washington targeting China, according to documents seen by AFP Wednesday.

President Donald Trump's envoys to the Geneva-based trade body have circulated a document, dated March 12, that aims to address "the chronic low level of compliance with existing notification requirements under many WTO agreements."

US officials have charged that China regularly implements measures to prop up its domestic industries that breach WTO rules, fails to provide notification about those measures -- another rules violation -- and rarely gets caught, let alone punished.

They have also said the WTO's Dispute Settlement Body (DSB) has unfairly given preferential treatment to China at the expense of the US economy, a charge that WTO officials have largely rejected.

Under the proposed US reforms, if a member state fails to provide adequate warning about new tariffs, subsidies or safeguards and ignores a set of warnings for three years, it will be declared "an inactive member" and lose access to WTO technical information.

The US text, released to the media by a Geneva-based trade official, comes as the 164-member WTO faces challenges unprecedented in its 23-year history.

Trump has imposed new tariffs on steel and aluminium, arguing that protecting domestic producers is a matter of national security, a move that has raised fears of a possible trade war.

Powerful states around the world have vowed to fight back, including at the DSB.

But WTO judges have never arbitrated such a case.

Trump's trade office has reserved the right to ignore DSB rulings that it considers counter to US interests.