U.S. Treasury chief Mnuchin slams report that Trump wants to exit WTO

U.S. Treasury Secretary Steve Mnuchin said a report by the Axios news
website, that cited sources as saying President Donald Trump wanted the
United States to withdraw from the World Trade Organization, was wrong.

“There’s no breaking news here … it’s not right,” Mnuchin told Fox Business Network, calling the report “fake news.”

Axios reported earlier on Friday, citing people who were involved in
discussions with the president, that Trump frequently told advisers he
wanted the United States to quit the WTO, a move with potentially
disastrous implications for global commerce.

“This is an exaggeration,” Mnuchin said. “The president has been
clear, with us and with others, he has concerns about the WTO, he thinks
there’s aspects of it that are not fair, he thinks that China and
others have used it to their own advantage, but we are focussed on free
trade. That’s what we’re focussed on – breaking down barriers.”

U.S. stocks wobbled briefly in premarket trading after the Axios
report, but regained their footing following Mnuchin’s comments.

One person who has discussed the subject with Trump, according to
Axios, said the president frequently told advisers: “I don’t know why
we’re in it. The WTO is designed by the rest of the world to screw the
United States.”

A source familiar with Trump’s thinking told Reuters he has said
privately that the U.S. should get out of the WTO but that it was not a
serious proposal.

“He’s frustrated with it and doesn’t love it but it’s not like we’re
doing some formal process to withdraw. He thinks they impede good trade
deals and make trading more complicated,” the source said.

A December 1994 statute approving the creation of the WTO requires
explicit approval from both U.S. chambers of Congress for the country to
withdraw from the agreement, an extremely high barrier to such a move.

The 164-member WTO is the only international organisation that deals
with the rules of trade between countries and states its key purpose as
opening trade “for the benefit of all.”

In Geneva, WTO spokesman Keith Rockwell said no one from the U.S.
government had indicated to officials “in the Secretariat that they have
any intention of leaving the organisation.”

The White House press office did not immediately respond to a request
for comment, and neither did the U.S. Trade Representative’s office.

CHINA

The USTR has launched a WTO challenge against China’s technology
licensing practices, arguing that they ignore market principles and
violate WTO rules. The challenge is part of Trump’s “Section 301” tariff
efforts to pressure China to change its intellectual property practices
and industrial policies.

Last Friday, the United States told the Geneva-based WTO that appeals
rulings in trade disputes could be vetoed if they took longer than the
allowed 90 days.

The statement by U.S. Ambassador Dennis Shea threatened to erode a
key element of trade enforcement at the 23-year-old WTO: binding dispute
settlement, widely seen as a major bulwark against protectionism.

It came as Trump, who has railed against the WTO judges in the past,
threatened to levy a 20 percent import tax on European Union cars, the
latest in an unprecedented campaign of threats and tariffs to punish
U.S. trading partners.

Mnuchin was asked earlier on Friday if new trade tariffs the United
States has imposed or threatened might wipe out gains from major tax
cuts passed into law six months ago.

“I can assure you that we are not going to do anything that wipes out
all those benefits or does anything that has a significant risk on
growth,” he said.

 Source: Reuters (Reporting by Tom Miles in GENEVA and David Lawder,
Steve Holland, Patricia Zengerle, Eric Walsh and Doina Chiacu in
WASHINGTON;