U. S. Backtracks on WTO Funding Cuts Amid Backlash
The U.S. government recently made a quiet change to its plans. They initially wanted to cut funding for the World Trade Organization (WTO). This move was part of a larger effort to reduce foreign aid. The cuts were announced last Friday and totaled $4.9 billion. However, the plan to cut WTO funding sparked a lot of concern.
Concerns and Reactions
- Democratic lawmakers argued that the cuts were illegal. They said Congress had already authorized the funding.
- Trade groups warned that cutting WTO funding would give China more influence.
- WTO Director General Ngozi Okonjo-Iweala was working with U.S. officials to resolve the issue.
By Wednesday, the WTO was no longer listed as a target for cuts on the White House website.
Initial Announcement and Reversal
The initial announcement mentioned $29 million in WTO funding. It was described as an example of U.S. contributions that went against President Trump's "America First" priorities. The administration had called the WTO "toothless." However, the reference to the WTO was removed from the White House website by Wednesday. A trade source confirmed that the funding cuts for the WTO were no longer happening.
Broader Context
The cuts announced on Friday are part of a broader effort by Trump. His "Make America Great Again" movement aims to reduce U.S. spending abroad. This comes after a government-wide review of U.S. participation in international organizations. Details of this review have not been released.
Both Democratic and Republican administrations have criticized the WTO. They say it has failed to resolve trade conflicts or make progress on global trade standards. Trump has imposed high tariffs on nearly all trading partners. He has also pursued separate bilateral trade deals. Experts say these deals undermine efforts to set binding multilateral rules for trade.
Current Status
A senior U.S. official said the WTO reference was removed to avoid confusion. The list referred to programs funded in the past, not new cuts. The initial announcement sparked questions from Congress and concern from trade groups. The National Foreign Trade Council warned that withdrawing U.S. funding would leave a vacuum. Other countries, like China, would be happy to fill this gap.
The fate of the WTO funding remains unclear. Barring specific instructions, the funding could roll over after September 30. It comes from an account that carries over automatically at the end of the fiscal year. The administration also owes the WTO money for 2024. The WTO's annual budget is 205 million Swiss francs. Washington is due to contribute about 11% of this amount.