US trade offensive takes out WTO as global arbiter

US trade offensive takes out WTO as global arbiter
Trade-restrictive measures among the G20 group of largest economies are at historic highs. (AFP)
Updated 10 December 2019

US trade offensive takes out WTO as global arbiter

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.


Flagship Huawei store in Saudi Arabia will be its biggest outside China

Flagship Huawei store in Saudi Arabia will be its biggest outside China
Terry He, the CEO of Huawei Tech Investment in Saudi Arabia, said the Kingdom is a very important market for the company. (AFP)
Updated 3 min 9 sec ago

Flagship Huawei store in Saudi Arabia will be its biggest outside China

Flagship Huawei store in Saudi Arabia will be its biggest outside China

RIYADH/JEDDAH: Chinese tech firm Huawei has signed an agreement with Kaden Investment for the launch in Saudi Arabia of its largest store outside China.
During the signing ceremony, at the Ministry of Investment headquarters in Riyadh, Investment Minister Khalid Al-Falih highlighted the importance of investment in information and communications technology, along with energy and entertainment, which are important pillars of the Kingdom’s Vision 2030 development plan.
He said that the agreement with Huawei is a symbol of the prosperity that comes from long-term partnerships, in this case a 20-year relationship with the Chinese business. It is a “long-standing digital partner and ahead of the curve” in spotting the potential offered by the Kingdom, he added.
“Huawei has played an instrumental role in Saudi Arabia’s development, collaborating with government and private enterprises to enhance our nation’s technological infrastructure,” said Al-Falih. “It continues to share our commitment to talent development, innovation and ambition, the values which underpin Vision 2030.”
Terry He, the CEO of Huawei Tech Investment in Saudi Arabia, said the Kingdom is a very important market for the company.
“It gives me great pleasure to announce the next step in Huawei’s commitment to the Kingdom of Saudi Arabia, to open the largest Huawei flagship store in the overseas market,” he added. “This will provide customers with an unprecedented, immersive full-scenario experience.”
Fahad Alarjani, a member of the Saudi Chinese Business Council, welcomed the agreement as a “huge success” for the Ministry of Investment, in collaboration with other Saudi ministries, in attracting high-tech investments to Saudi Arabia, “especially given that Huawei is considered a technology giant in China and the world.”
Alarjani, a doctorate-level scholar in sustainable entrepreneurship, SMEs development, and marketing strategies, said it is important that agencies in the Kingdom work together to create a fertile, world-leading environment for investors so that they can attract the latest, and sustainable, technological innovations.
“This will help to open new markets and speed up entrepreneurial development,” he added. “It is important to be aware of the fact that Chinese companies are working hard on being pioneers of 5G.”

The agreement with Huawei is a symbol of the prosperity that comes from long-term partnerships, in this case a 20-year relationship with the Chinese business.

Khalid Al-Falih, Investment minister

Saleh M. Al-Saleem, a professor of computer and information sciences at King Saud University, said: “The agreement will definitely entail training programs to transfer technology, and an investment by a company of this size in the Saudi market is an acknowledgment on its part of the huge size of the technological sector in the Kingdom.”


He added that the agreement opens the door for increased competition between the biggest international companies in the sector, and will contribute to lower costs and enhanced services in the Kingdom.
Saudi consumers also expressed excitement about the news. Pharmaceutical science graduate Ruwaid Mahalawi, 29, who lives in Jeddah and describes himself as a Huawei fan, said: “It’s nice to see big names coming into Saudi Arabia and this is only the start — it will inspire more companies to invest in the Kingdom and recognize the market is extremely welcoming.”
Saudis are a very tech savvy society, he said. “Children and adults alike use electronic devices — especially now, with the pandemic — whether it’s for work or schooling. I think it’s shedding light on how big the market is here.”
Mahalawi’s wife, 26-year-old Wajd Abdullah, is also a fan of the Chinese firm and said she ditched her iPhone for a Huawei Mate. She appreciates the added level of service that is provided when a tech brand sells its products through its own stores, rather than through third-party retailers.
“It’s always best when a brand’s own store opens,” she said. “You don’t have to worry about insurance for the gadgets or quality. The store staff will be more knowledgeable and helpful, too, and that helps to ensure customers will return.”
An opening date for the new store, which will be in Riyadh, has yet to be announced.