Reuters is reporting that the U.S. has blocked the WTO from even looking into the compatibility of the bank bailouts with WTO rules:
The WTO's regular protectionism reports, introduced in response to the financial crisis, have focused on conventional trade measures such as tariff increases and anti-dumping duties.
The call to include bailouts and stimulus packages was led by Argentina, backed by Ecuador, Cuba, Brazil, India and China.
These trade policy reviews are for transparency purposes only, and do not mean that the WTO is prohibiting countries from taking a certain course of action. As we've noted, the WTO limits on both domestic financial policy are expansive, and were developed by AIG, Citigroup, Larry Summers and Timothy Geithner. Might this latest move be an attempt to paper over their role in the WTO financial deregulation push? After all, if the WTO secretariat were to report that controversial policies like the bailouts were WTO violations, we'd have to fess up to the fact that a lot of popular proposals - like bans on risky financial products, or limitations on unlimited capital mobility - are also in conflict with various trade pact rules.
The U.S. has a sad history of pressuring developing nations to refrain from adopting policies that could prevent the deaths of millions (see here and here). Developing nations are going to see it as more than a little hypocritical that the U.S. doesn't even want to talk openly about its bailouts, which are also opposed by most Americans.
Unfortunately, this latest move in Geneva deals another blow against Obama's promise of greater transparency in the trade policy review making process, and a continuation of putting the big banks first.