The writer is a senior fellow at the Centre for International Governance Innovation, former executive director at the IMF and former counsellor at the World Trade Organization
“Liberation day”, as US President Donald Trump triumphantly branded his tariff announcement last week, could deal a fatal blow to the already faltering international trading system governed by the World Trade Organization.
Built on two fundamental principles — “national treatment” and “most favoured nation” (MFN) — the WTO was designed to provide predictability to trade and therefore, investment. National treatment guarantees that once imports clear customs, they receive the same treatment as domestically produced “like products”. The MFN rule, with exceptions for free trade zones, requires WTO members to extend equal trading terms to all others.