The immigration deal imposed on Mexico by Donald Trump under the threat of punitive tariffs is a victory for “hostage-taking” over international rules, a former head of the World Trade Organization (WTO) said on Saturday.
Late on Friday, the US and Mexico struck an accord to avert a tariff war when Mexico agreed to expand a contentious asylum program and deploy security forces to stem the flow of migrants from Central America.
Mexico made the concessions after Trump threatened to slap escalating tariffs of 5% on all Mexican goods from Monday if Mexico’s president, Andrés Manuel López Obrador, did not do more to tighten his country’s borders.
“My reaction is it seems that hostage-taking works,” Pascal Lamy, a former director-general of the WTO, told Reuters, saying Trump’s actions went against the spirit of diplomacy.
“If there’s a rule of law, it’s because people believe it’s better than the law of the jungle. And many people don’t like the law of the jungle because some are strong, some are weak, and they don’t want the strong to always step on the weak.”
If there’s a rule of law, it’s because people believe it’s better than the law of the jungle
The White House did not immediately respond to requests for comment. Lamy has criticized Trump’s use of tariffs in the past. Trump has blamed the WTO for not doing enough to defend US trade interests, and in August 2018 threatened to pull out of the organization.
Global markets have been roiled by the Trump administration’s aggressive use of tariffs, fanning concern about the stability of multilateral institutions that grew up after the second world war.
Lamy, a French civil servant, is a former European commissioner for trade who led the WTO from 2005 to 2013. He has been a staunch defender of the post-war rules-based system. His criticism of Trump’s tariffs reflects wider misgivings about the US going it alone.
Mexico sends about 80% of its exports to the US, giving Trump ample leverage to put pressure on López Obrador over a surge in migrants to the US border.
Lamy said it was understandable that Mexico had sought to extricate itself from the tariff bind, but noted it ran the risk of facing more threats in future.
He was in “absolutely no doubt” that the WTO would have found in favor of Mexico if López Obrador had asked it to arbitrate the dispute with Trump, a process he said would have taken around two years.
“The US president is taking trade decisions that are in total violation of the WTO rules,” Lamy said. “That was the case with these Mexican tariffs. The notion that you put a tariff because there are too many people crossing the border is just miles away from any letter and spirit of the WTO agreement. Which is why I qualify this as hostage-taking.“
Lamy said it was still not clear whether the US president was more interested in reforming the WTO or neutralizing it. He said Trump had complaints worth heeding, noting that some WTO rules made it hard to constrain Chinese trade practices that have caused frictions.
But he said the rest of the world would need a fallback plan if the US decided not to abide by international rules.
“The others have to find a way to stabilize the multilateral rules-based system,” he said, “even if the US wants to kill it.”