US Scuttles Trade Language at OECD Ministerial, Imposes Steel Tariffs

Participants at the OECD ministerial in Paris

Last week, ministers gathered in Paris for the annual OECD Ministerial Council Meeting. For the second year in a row, the United States refused to join a consensus statement with the other OECD countries.

As happened last year, the U.S. objected to language supportive of globalization and the multilateral trading system. The action came as the Trump administration announced that it would end temporary exemptions from Section 232 tariffs on steel and aluminum granted to Mexico, Canada, and the European Union. The duties went into effect on June 1.

According to USCIB Senior Vice President Rob Mulligan, who attended the OECD ministerial as part of a delegation from Business at OECD, the administration has made clear that it attributes little significance to U.S. leadership in the global trade environment.

“In a misguided effort to re-balance perceived inequities, often based solely on the metric bilateral trade deficits without a view to the larger picture, the administration is effectively alienating the United States from the global order that it once championed and led,” he said following the meetings in Paris.

At the OECD ministerial, U.S. Commerce Secretary Wilbur Ross defended the U.S. action, saying problems arise “when people don’t follow the rules, when the enforcement mechanisms are inadequate and even more so when the rules become obsolete.”

Mulligan elaborated: “Protectionism, while tempting in the short term, has consistently proven to be damaging for the larger economy in the long term. Unilateral, protectionist actions such as these tariffs, enacted under the guise of national security, do not constitute an effective long-term strategy for economic growth. They will also erode the value of the national security exception. For the United States to continue its leadership in innovation, the trade and investment environment must remain open. These recent actions unfortunately do not reflect such a view.”

The business community remains very concerned about the trajectory of the administration’s policies on trade and investment, said Mulligan. While many U.S. actions appear targeted at China and its commercial practices, he said, “it is not clear how stepping away from the global table and alienating our allies is an effective strategy to address the many problems U.S. business encounters in China.”

Staff Contact:   Alice Slayton Clark

VP, International Investment and Trade Policy
Tel: 202.682.0051

Related Content