Trump tells WTO to stop lenient trade treatment of China

US President Donald Trump said that the WTO ‘is in desperate need of reform.’ (AFP)
Updated 28 July 2019

Trump tells WTO to stop lenient trade treatment of China

  • Trump said the designation lets powerhouse China and others take “unfair” advantage of trade rules

WASHINGTON: President Donald Trump pressed the World Trade Organization to stop letting China and other economies receive lenient treatment under global trade rules by calling themselves “developing” countries.
In a memo, Trump directed US Trade Representative Robert Lighthizer to “use all available means” to get the WTO to prevent countries from claiming developing country status if their economic strength means they don’t need beneficial treatment.

FASTFACT

Among wealthy countries that claim developing status are Singapore, South Korea, Brunei and Kuwait.

Developing countries, supposedly not yet competitive with advanced economies such as the US, get more time to open their economies, more leeway to subsidize their exports and procedural advantages in WTO disputes. Countries can choose their own status, and other countries can challenge them.
Trump said the designation lets powerhouse China and others take “unfair” advantage of trade rules. If the US decides the WTO has not made “substantial progress’ after 90 days, it will seek unilaterally to stop treating those countries as developing economies.
In a tweet, Trump wrote that the “WTO is BROKEN when the world’s RICHEST countries claim to be developing countries to avoid WTO rules and get special treatment. NO more!!! Today I directed the US Trade Representative to take action so that countries stop CHEATING the system at the expense of the USA!”
Despite claiming developing country status, China is the world’s second-biggest economy and No. 1 exporter. Among wealthy economies that claim developing status are Singapore, South Korea, Brunei, Kuwait and the UAE.
“China and too many other countries have continued to style themselves as developing countries, allowing them to enjoy the benefits that come with that status and seek weaker commitments than those made by other WTO members,” Trump’s memo said, adding that “the status quo cannot continue.”
But former WTO official Jennifer Hillman said that she doubts Trump’s move will make much difference. Most of the more-generous deadlines developing countries got to open their economies have long since passed.
“While there may be a few places in the agreement that still give some small break to developing countries, they are not many,” said Hillman, senior fellow on the Council on Foreign Relations. “The proposal to stop treating countries as developing countries for purposes of the WTO won’t change much.”
The US and China are locked in a trade war over American allegations that Beijing is using predatory practices, including outright cybertheft, to challenge US technological dominance.
The Trump administration has complained that the Geneva-based WTO, which referees trade disputes, is ill-equipped to handle China’s unique economy in which the government plays a major role and boundaries between state-owned and private companies can be blurry. “The WTO is in desperate need of reform,” Trump said.


US to extend license for its companies to continue business with Huawei

Updated 9 min 12 sec ago

US to extend license for its companies to continue business with Huawei

  • A longer extension is in the works but has not yet been finalized due to regulatory hurdles

WASHINGTON: The Trump administration is set to issue a two-week extension of a license allowing US companies to continue doing business with China’s Huawei Technologies, two sources familiar with the deliberations said.

The extension of around two weeks is far shorter than the prior 90-day extension and a longer extension is in the works but has not yet been finalized due to regulatory hurdles, said one source who was briefed on the matter.

After adding Huawei to an economic blacklist in May citing national security concerns, the US Commerce Department has allowed it to purchase some American-made goods in a move aimed at minimizing disruption for its customers, many of which operate networks in rural America.

The extension will be announced on Monday, when the earlier reprieve is set to expire, the sources said, declining to be identified as the extension has not been publicly announced.

A spokesman for Huawei, the world’s biggest maker of telecom network equipment, said the company does not comment on rumors and speculation. The Commerce Department declined to comment.

HIGHLIGHTS

  • US added Huawei to an economic blacklist in May citing national security concerns.
  • The Commerce Department is also considering whether to grant individual licenses for US firms to sell components to Huawei.

Commerce Secretary Wilbur Ross told Fox Business Network on Friday that some rural carriers need the temporary licenses and are dependent on Huawei for 3G and 4G networks.

“There are enough problems with telephone service in the rural communities — we don’t want to knock them out. So, one of the main purposes of the temporary general licenses is to let those rural guys continue to operate,” Ross said.

The development comes amid discussions between the US and China aimed at coming to an initial agreement to resolve a trade war that has lasted for over a year.

In blacklisting Huawei, the US government said it had a “reasonable basis to conclude that Huawei is engaged in activities that are contrary to US national security or foreign policy interests.” Huawei has repeatedly denied the accusations.

Attorney General William Barr said on Thursday Huawei and ZTE Corp. “cannot be trusted,” as he backed a proposal to bar US rural wireless carriers from tapping an $8.5 billion government fund to purchase equipment or services from them.

In May, President Donald Trump also signed an executive order declaring a national emergency and barring US companies from using telecommunications equipment made by companies posing a national security risk. The Commerce Department was due to draw up an enforcement plan by mid-October but has yet to publish one.

The Commerce Department is also considering whether to grant individual licenses for US firms to sell components to Huawei after receiving more than 200 requests.