Policy Brief 22-15: How to save the WTO with more flexible trading rules

The other extreme response, among economic and security experts who argue that the Chinese and US systems are fundamentally incompatible, calls for “decoupling.” The idea is to sever trade, supply chain links, and investment and technological ties with China to the maximum extent possible and form alliances 2 The Marrakesh Ministerial Declaration of April 1994 at the end of the Uruguay Round state. [...] Bergsten (2022) describes the joint effort of the United States, European Union, and Japan to expand the list of prohibited subsidies to include those that “distort capacity” and to shift the burden of proof from accusing countries to those accused of subsidizing to show that their subsidies are doing no harm. [...] In sum, the lesson from the failure to invoke safeguards was not a failure of the design of the special safeguards agreement. [...] In the tire case, the USITC was able to establish causation and injury to the satisfaction of the Appellate Body. [...] Nonetheless, the experience with the special safeguard and the fact that when applied by the United States it withstood scrutiny by the WTO dispute settlement system suggest that it could serve as a model for a safeguard provision that could regulate disruptive trade without having to investigate and prove the sources of the disruption.