G20 trade ministers say WTO reform ‘urgent’ as new Trump tariffs loom

Trade and investment ministers from G20 countries meeting in Argentina said there was an “urgent need” to improve the World Trade Organization. (File/AFP)
Updated 15 September 2018

G20 trade ministers say WTO reform ‘urgent’ as new Trump tariffs loom

  • Trump has said he would attend the summit’s final meeting with other heads of state, in Buenos Aires on November 30
  • The Trump administration has demanded that China cut its $375 billion trade surplus with the United States

MAR DEL PLATA: Trade and investment ministers from G20 countries meeting in Argentina said there was an “urgent need” to improve the World Trade Organization, a joint statement said on Friday.
With US President Donald Trump readying tariffs on another $200 billion in Chinese goods, the ministers said they were “stepping up the dialogue” on international trade disputes, according to the statement issued at the summit.
It did not provide any details of possible WTO reforms or how dialogue on trade was being increased.
“Obviously the new tariff measures are not positive,” Argentina’s Production and Labor Minister, Dante Sica, said in a news conference at the end of the one-day meeting. “But we need to see how things evolve.”
German Deputy Economy Minister Oliver Wittke said the joint declaration sent a powerful signal about the importance of strengthening WTO “especially in times of ‘America first’ and increasing global protectionism,” with next steps to follow when G20 leaders meet in Argentina at the end of November.
“We have to use this momentum,” Wittke said in a statement released by the ministry after the summit.
Outside the meeting, smoke filled the air in the normally tranquil seaside city of Mar Del Plata where the conference is being held. Protesters burned makeshift American flags and chanted against free trade orthodoxy and Trump’s support of Argentina’s cash-strapped President Mauricio Macri, whose fiscal belt-tightening has garnered a backlash from the country’s working-class.
“We’re standing here in solidarity with the workers of Latin America. While those politicians sleep in fancy beds, communities starve because of trade and adjustment policies that hurt the most vulnerable,” protester Maralin Cornil, 30, said.
Argentina holds the G20’s rotating presidency this year, and is re-negotiating a $50 billion stand-by financing deal with the IMF, cutting its fiscal deficit targets and reducing costs to ensure it can continue paying its international debts.
Trump has said he would attend the summit’s final meeting with other heads of state, in Buenos Aires on November 30.
The Trump administration has demanded that China cut its $375 billion trade surplus with the United States, end policies aimed at acquiring US technologies and intellectual property, and roll back high-tech industrial subsidies.
While Trump has threatened to pull the United States from the WTO, China has called for WTO reform to make the global trade system fairer and more effective.
The 23-year-old trading club is run on the basis of consensus, meaning that every one of its 164 members has an effective veto and it is almost impossible to get agreement on any change to the rules.
Sica also said that talks on a free trade deal between the European Union and the Mercosur trade bloc of Argentina, Brazil, Paraguay and Uruguay were wrapping up, with an agreement likely by the end of the year.
“We are in the final stages regarding the most delicate aspects of an EU-Mercosur agreement and we are concluding with the political and technical details,” Sica said.


US trade offensive takes out WTO as global arbiter

Updated 10 December 2019

US trade offensive takes out WTO as global arbiter

  • Two years after starting to block appointments, the US will finally paralyze the WTO’s Appellate Body
  • Two of three members of Appellate Body exit and leave it unable to issue rulings

BRUSSELS: US disruption of the global economic order reaches a major milestone on Tuesday as the World Trade Organization (WTO) loses its ability to intervene in trade wars, threatening the future of the Geneva-based body.
Two years after starting to block appointments, the United States will finally paralyze the WTO’s Appellate Body, which acts as the supreme court for international trade, as two of three members exit and leave it unable to issue rulings.
Major trade disputes, including the US conflict with China and metal tariffs imposed by US President Donald Trump, will not be resolved by the global trade arbiter.
Stephen Vaughn, who served as general counsel to the US Trade Representative during Trump’s first two years, said many disputes would be settled in future by negotiations.
Critics say this means a return to a post-war period of inconsistent settlements, problems the WTO’s creation in 1995 was designed to fix.
The EU ambassador to the WTO told counterparts in Geneva on Monday the Appellate Body’s paralysis risked creating a system of economic relations based on power rather than rules.
The crippling of dispute settlement comes as the WTO also struggles in its other major role of opening markets.
The WTO club of 164 has not produced any international accord since abandoning “Doha Round” negotiations in 2015.
Trade-restrictive measures among the G20 group of largest economies are at historic highs, compounded by Trump’s “America First” agenda and the trade war with China.
Phil Hogan, the European Union’s new trade commissioner, said on Friday the WTO was no longer fit for purpose and in dire need of reforms going beyond just fixing the appeals mechanism.
For developed countries, in particular, the WTO’s rules must change to take account of state-controlled enterprises.
In 2017, Japan brought together the United States and the European Union in a joint bid to set new global rules on state subsidies and forced technology transfers.
The US is also pushing to limit the ability of WTO members to grant themselves developing status, which for example gives them longer to implement WTO agreements.
Such “developing countries” include Singapore and Israel, but China is the clear focus.
US Commerce Secretary Wilbur Ross told Reuters last week the United States wanted to end concessions given to then struggling economies that were no longer appropriate.
“We’ve been spoiling countries for a very, very long time, so naturally they’re pushing back as we try to change things,” he said.
The trouble with WTO reform is that changes require consensus to pass. That includes Chinese backing.
Beijing has published its own reform proposals with a string of grievances against US actions. Reform should resolve crucial issues threatening the WTO’s existence, while preserving the interests of developing countries.
Many observers believe the WTO faces a pivotal moment in mid-2020 when its trade ministers gather in a drive to push through a multinational deal — on cutting fishing subsidies.
“It’s not the WTO that will save the fish. It’s the fish that are going to save the WTO,” said one ambassador.