GENEVA: A spate of disputes at the WTO this week, far from suggesting the world is on the brink of a trade war, shows the global trading system is alive and kicking. The biggest economic downturn since the Great Depression led many to fear a return to 1930s-style protectionism.
But the World Trade Organization says the world economy ended 2009 about as open to trade as before the crisis — not least because countries can sort out their trade differences according to an agreed system of rules.
This week’s disputes turn on highly technical issues such as implicit subsidies on out-of-quota exports, or the controversial US method of calculating anti-dumping duties known as zeroing.
What they have in common is that China, the United States, the European Union and other trade powers are not slugging it out in tit-for-tat trade wars but using the rules of the global trading system to resolve their disputes.
The resilience of the dispute system contrasts with the lack of progress in the Doha Round of trade talks, launched in late 2001 and likely to miss yet another deadline this year. The Doha talks aim to update and improve the rules of the current trading system, largely in place since 1994.
But trade experts say the WTO, and the global trading system, is much more than trade negotiations.
“Doha could collapse and the set of rules the WTO has would still provide a very healthy system,” said Brendan McGivern of international law firm White & Case.
When the Doha talks appear to be moving forward, governments may be inclined to hold back on launching disputes.
So far this week: Brazil, Australia and Thailand called on the EU to withdraw plans to export an extra half a million tons of sugar outside agreed quotas, hinting they would revive a previous dispute they won over EU subsidies; Vietnam launched its first trade dispute since joining the WTO in 2007 with a case against US anti-dumping duties on shrimp based on zeroing; The European Union said it would seek $311 million a year in retaliation against the United States for failing to comply with WTO rulings on zeroing; China launched a trade dispute against the European Union over anti-dumping duties on shoes.
