China says WTO faces ‘profound crisis’ — urges reform

Shoppers browse their phones outside a fashion boutique selling US brand clothing in a Beijing shopping mall. China and the US have clashed about how the WTO should reform to better serve member interests. (AP Photo)
Updated 23 November 2018

China says WTO faces ‘profound crisis’ — urges reform

  • Members of the G20 are expected to discuss WTO reform when they meet at a summit in Argentina next week
  • Debate on reforming the WTO has been largely driven by US complaints that it has failed to police suspected Chinese rule-breaking

BEIJING: China urged the World Trade Organization (WTO) to close loopholes and correct practices by some member states that damage global trade, warning of a “profound crisis” facing the institution’s existence.
China and the United States have clashed about how the WTO should reform to better serve member interests, amid a widening trade dispute that has triggered billions in retaliatory tariffs and rocked global markets.
Members of the G20 are expected to discuss WTO reform when they meet at a summit in Argentina next week, following a failed attempt to reach agreement on the topic at an APEC forum held last week in Papua New Guinea.
Debate on reforming the WTO has been largely driven by US complaints that it has failed to police suspected Chinese rule-breaking, with US President Donald Trump threatening a withdrawal to protect American interests.
The United States wants the WTO to crack down on China’s subsidies for state-owned enterprises (SOE), overcapacity in steel and other basic industries, and on the practice of forcing investors to hand over valuable technology.
At a news conference on Friday, China’s Vice Commerce Minister Wang Shouwen unveiled a list of detailed demand and principles to clarify China’s stance that reform should uphold core WTO values, ensure fairness and protect developing countries’ interests.
He took aim at what he called “excessive” agriculture subsidies enjoyed exclusively by developed countries, saying some member states had exploited loopholes in the WTO system.
Reforms should correct some countries’ discrimination against investments by other countries and companies, and not be used as a way to deprive China of the right to enjoy differentiated treatment as a developing country, Wang said, without naming any countries.
“Some countries are in reality just hoping to uphold their monopoly status and restrict other member states’ development,” he said.
Referring to state-owned enterprises (SOEs), he said China opposed groundless criticism of “normal SOE and industrial subsidies” and “normal sharing of technological innovations.”
Wang added the WTO should try to resolve a deadlock in appointments to its Appellate Body, which have been blocked by the United States which blames the dispute settlement body’s judges for hampering a US campaign against what it sees as unfair trade practices.
China’s ambassador to the WTO, Zhang Xiangchen, said this week that China would not have views forced upon it as he warned fellow WTO members against seeing reform as a chance to put China in a straitjacket.
“The WTO should prioritize key issues that threaten the institution’s existence,” Wang said.


Oil falls below $57 on virus impact and OPEC+ delay

Updated 19 February 2020

Oil falls below $57 on virus impact and OPEC+ delay

  • Contagion ‘is spooking market players,’ analysts say after Asian shares fall and Apple issues warning

LONDON: Oil fell below $57 a barrel on Tuesday, pressured by concerns over the impact on crude demand from the coronavirus outbreak in China and a lack of further action by OPEC and its allies to support the market.

Forecasters including the International Energy Agency (IEA) have cut 2020 oil demand estimates because of the virus. Though new cases in mainland China have dipped, global experts say it is too early to judge if the outbreak is being contained.

Brent crude was down 82 cents at $56.85 a barrel in mid-afternoon trade after rallying in the previous five sessions. US West Texas Intermediate crude fell 70 cents to $51.35.

“Risk aversion has returned to the markets,” said Commerzbank analyst Carsten Fritsch.

“OPEC+ has shown no sign yet of reacting to the virus-related slump in demand by making additional production cuts.”

The virus is having a wider impact on companies and financial markets. Asian shares fell and Wall Street was poised to retreat on Tuesday after Apple said it would miss quarterly revenue guidance owing to weakened demand in China.

“This has spooked market players and triggered a sharp pullback in risk assets,” said Tamas Varga of oil broker PVM.

The IEA last week said that first-quarter oil demand is likely to fall by 435,000 barrels per day (bpd) from the same period last year in the first quarterly decline since the financial crisis in 2009.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have been considering further production cuts to tighten supply and support prices.

The group, known as OPEC+, has a pact to cut oil output by 1.7 million bpd until the end of March.

The next OPEC+ meeting next month is set to consider an advisory panel’s recommendation to cut supply by a further 600,000 bpd. Talks on holding an earlier meeting in February appear to have made no progress, OPEC sources said.

As well as OPEC+ voluntary curbs, support for prices has come from involuntary losses in Libya, where output has collapsed since Jan. 18 because of a blockade of ports and oilfields.