Caribbean Trade Law and Development

Category: Trade

  • Caribbean Trade & Development Digest – September 23-29, 2018

    Caribbean Trade & Development Digest – September 23-29, 2018

    Welcome to the Caribbean Trade & Development Digest for the week of September 22-29, 2018! We are happy to bring you the trade and development headlines and analysis from across the Caribbean Region and the world from the past week.

    THIS WEEK’S HIGHLIGHTS

    World leaders gathered for the 73rd Session of the United Nations’ General Assembly this week where issues of trade and wider multilateralism featured prominently. Economic releases by the Organisation for Economic Cooperation and Development (OECD) and World Trade Organisation (WTO), respectively, have warned of the risks posed by escalating trade tensions to global economic and trade growth. In its flagship Trade and Development Report 2018 released this week, UNCTAD highlighted that the current trade tensions were a symptom of excessive financialisation and imbalances in trade and economic power. This week, the US also blocked the reappointment of a fourth WTO Appellate Body judge, which will reduce that body’s roster of judges to three, the bare minimum needed to hear a dispute.

    On the NAFTA front, the promised release of the renewal text agreed to by the US and Mexico has been delayed with hopes that the impasse between the US and Canada will be surmounted as the Sunday (today) deadline for agreement on the updated NAFTA looms.

    REGIONAL

    Tourism investments under the microscope

    The Gleaner: Jamaica Minister of Tourism Edmund Bartlett has put a cork on new approvals of tour businesses, while his Tourism Working Group (TWG) examines the degree to which large hotel groups may be crowding out local destination management companies and tour operators from the market. Read more 

    No significant return (on Carnival), says (Trinidad tourism minister)

    Trinidad Express: More than $500 million was spent on promoting Carnival over the last ten years and Trinidad and Tobago failed to get a significant return in terms of its investment, says Tourism Minister Randall Mitchell. Read more 

    Guyana to sign economic cooperation agreement with Barbados

    Caribbean360:  President David Granger has announced that Guyana will soon sign a framework agreement for economic cooperation with Barbados. The announcement came 24 hours after a memorandum of understanding (MOU) was signed between Guyana and Trinidad and Tobago for energy cooperation. Read more 

    Producers Seek CET Protection To Launch White Sugar Market

    The Gleaner: The sugar sector in the Caribbean is protected from outside competition by a 40 per cent tariff on brown sugar imports, and producers want that protection extended to refined sugar as a predicate to developing a market internally. Read more 

    Guyana should be pressing Trinidad & Tobago over artificial trade barriers -Ramkarran

    Stabroek: With opportunities now opening up due to Guyana’s advantageous position in the emerging oil and gas sector, it should begin pressing Trinidad and Tobago to remove its artificial barriers to trade, says commentator Ralph Ramkarran. Read more 

    T&T to continue restricting trade in honey produced in other CARICOM countries

    CNC3: The Government of Trinidad and Tobago has vowed to continue restricting the trade in honey being produced by CARICOM countries to prevent the spread of diseases. Read more 

    Caribbean region is the top destination for investors looking for second citizenship

    Global Trade Magazine: The 2018 CBI Index—a special report published by the Financial Times’ Professional Wealth Management magazine—has revealed that Caribbean nations remain the top destinations in the world to apply for second citizenship. Read more 

    Study: Post-Maria Contracts Go To Mainland, Not Puerto Rico

    The Gleaner: A study published last Wednesday found that the bulk of federal funds slated for post-hurricane reconstruction efforts in Puerto Rico are going to mainland companies despite a federal provision that states that local companies should receive priority. Read more 

    INTERNATIONAL

    World trade’s top court close to breakdown as U.S. blocks another judge

    Reuters: The supreme court of world trade is close to breakdown after the United States turned down a last-ditch petition to reappoint one of the four remaining judges at the World Trade Organization. Read more

    WTO downgrades outlook for global trade as risks accumulate

    WTO: Escalating trade tensions and tighter credit market conditions in important markets will slow trade growth for the rest of this year and in 2019, WTO economists expect. Read more

    Trade Deals, Multilateralism in the Spotlight as UN General Assembly Gets Underway

    ICTSD: Trade has been a high-profile topic both at this week’s UN General Assembly (UNGA), featuring during leaders’ speeches and at meetings in the margins, as officials lay out their visions on trade and multilateralism while also working to advance different negotiating processes at the political level.  Read more

    Sustainable Financing, Climate Action Take Centre Stage During New York, Halifax Meetings

    ICTSD: Boosting the political momentum for climate action has taken centre stage in multiple high-level meetings across North America this month, including at this week’s UN General Assembly (UNGA) in New York. Read more 

    Members conclude first review of Nairobi Decision on export competition, seek details on US farm aid package

    WTO: WTO Members approved by consensus the first triennial review of the 2015 Nairobi Decision on export competition during a meeting of the WTO’s agriculture committee on 25-26 September. Read more 

    Panels established to rule on US safeguards, Canadian wine measures

    WTO: At a meeting of the WTO’s Dispute Settlement Body (DSB) on 26 September, WTO members agreed to requests from Korea for the establishment of two panels to determine whether safeguards imposed by the United States on imports of solar cells and washers are compatible with WTO rules. Read more 

    Canada unveils plan to strengthen WTO in face of U.S. protectionism

    Bloomberg: The proposal, called “Strengthening and Modernizing the WTO,” seeks to forge an alliance of like-minded countries to “restore confidence in the multilateral trading system and discourage protectionist measures and countermeasures,” according to a copy of the eight-page document obtained by Bloomberg. Read more 

    Commissioner Malmström visits Canada to take stock of progress with EU-Canada trade agreement

    EU: On Wednesday 26 September, the Commissioner met with the Canadian Minister of International Trade Diversification, James Gordon Carr. Together, they attended the first EU-Canada Joint Committee, which is the highest body for the two partners to discuss issues of interest related to the agreement. Read more

    Trade conflicts to dampen growth in Asia

    Deutsche Welle: Rising debt, US interest rate hikes, but above all simmering trade conflicts will take their toll on Asia’s growth prospects next year, the Asian Development Bank (ADB) has said in an update of its regional outlook. Read more 

    NYTimes: President Trump signed a revised free trade agreement with South Korea on Monday in New York, cementing the first bilateral trade deal of his administration and suggesting the United States could soon win similar agreements with other trading partners. Read more 

    EU, Japan and US met at Ministerial level

    EU: The three met as a continuation of the trilateral talks launched last year, to address issues such as trade-distortive practices. Read more 

    India-South Asia trade has potential to triple to $62 billion, says World Bank 

    Economic Times: Deeper regional trade and connectivity has the potential to more than triple India’s trade with its South Asian neighbors, World Bank said in a report on Monday. Read more 

    EU, China to meet on WTO reform in October

    Reuters: European Union trade officials will travel to Beijing next month for talks with Chinese counterparts on ideas for reform of the World Trade Organization, EU ambassador to the WTO Marc Vanheukelen said on Wednesday. Read more

    US, Japan agree to negotiate a free trade agreement

    Washington Post: The United States and Japan announced Wednesday they will open negotiations on a bilateral trade agreement between the world’s first- and third-largest economies. Read more 

    India sees opportunity in escalating US-China trade war

    Livemint: India has spotted an opportunity to boost its exports with the second round of tariff hikes by the Donald Trump administration on $200 billion of Chinese imports putting the US at a disadvantage. Read more 

    Courting Canada, U.S. and Mexico cancel plans to publish NAFTA texts: sources

    Reuters: The United States and Mexico abruptly canceled plans to publish NAFTA texts on Friday, sources said, as signs of renewed efforts by Canada and Washington to settle differences raised hopes a breakthrough could be made to keep the deal trilateral. Read more 

    Brexit costings 500M a week, study says

    Politico: The British economy is 2.5 percent smaller today than if the U.K. had voted to remain in the European Union, according to the Center for European Reform, a think tank. Read more 

    The closer we get to Brexit, the more polls show Britain wants to remain in Europe

    Business Insider: The closer we get to the Brexit deadline in March 2019, the more British people tell pollsters they think their decision to leave the European Union was wrong. Read more 

    Economists are severely underestimating the amount of trade between African countries

    Quartz Africa: The share of internal trade in Africa remains low, as reflected by official statistics. This is despite numerous regional trade agreements that have led to tariffs removal within the trading blocs. At least in principle. Read more 

    UNCTAD releases Trade and Development Report 2018

    UNCTAD: The world economy is again under stress. The immediate pressures are building around escalating tariffs and volatile financial flows but behind these threats to global stability is a wider failure, since 2008, to address the inequities and imbalances of our hyperglobalized world. Read more 

    African Development Bank Launches first Africa-to-Africa (A2A) Investment Report

    AfDB: The report unearths the realities African companies face when investing in the continent, the emerging trends in A2A investment and the steps African policymakers can take to accelerate intra-African investment. Read more 

    Africa: Kagame – CFTA Will Help the World Better Relate to Africa

    All Africa: The African Continental Free Trade Area (CFTA) Agreement is a bold framework that stands to define the future of relations between the continent and the rest of the world, President Paul Kagame has said. Read more 

    ECA emphasizes holistic approach to realize Africa’s ambitions in trade

    Xinhua: The UN Economic Commission for Africa (ECA) on Wednesday called for greater all-rounded involvement in Africa’s trade policy processes, with due emphasis given to the success of Africa’s flagship trade agreements and policies. Read more 

    Commonwealth countries back rules-based global trade

    Commonwealth Secretariat: Commonwealth members in the World Trade Organisation (WTO) agreed that despite their rich diversity, including in levels of development, they are united in recognising the importance of the rules-based multilateral system as a common good. Read more

    NEW ON CTLD BLOG

    US-China Trade Tensions: What may these mean for the Caribbean?

    Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

  • US-China Trade Tensions: What may these mean for the Caribbean?

    US-China Trade Tensions: What may these mean for the Caribbean?

    Alicia Nicholls

    On-going trade tensions between the United States of America (US) and China reached a new low point last week. Beijing cancelled upcoming trade talks with Washington in the wake of US President Donald Trump’s announcement of tariffs on a further $200 billion dollars’ worth of Chinese imports, starting September 24th. The Chinese government announced that it will retaliate with tariffs on a further US$60 billion dollars’ worth of US imports.

    US-China relations have had turbulent periods throughout the years, but the Trump Presidency has taken a markedly more aggressive stance to Beijing’s purported unfair trade practices which the US President blames for China’s large merchandise trade surplus with the US, estimated to be US$375 billion in 2017.

    With the US as the Caribbean region’s main trading partner and China, a growing economic presence in the region, will the Caribbean be caught in the middle of this spat between the world’s two largest economic superpowers? And is there anyway in which the region could possibly benefit?

    China-Caribbean Relations

    It must first be noted that Caribbean countries’ policy towards the recognition of either the People’s Republic of China (PRC) or the Republic of China (ROC – Taiwan) is fragmented. Five (Belize, Haiti, St. Kitts & Nevis, St. Vincent & the Grenadines and St. Lucia) out of fifteen Caribbean Community (CARICOM) member States still recognise Taiwan as a sovereign State. Moreover, it was only this week that China opened an embassy in the Dominican Republic after that country severed ties with Taiwan earlier. As such, not all Caribbean countries have diplomatic or economic ties with the PRC, but the majority do.

    In the midst of declining US presence in the Caribbean, Beijing has sought to fill the void through mainly bilateral engagement with individual Caribbean governments. China has become an increasingly important source of foreign direct investment, government loans, and development aid and cooperation. A growing number of infrastructure projects throughout the region have been built with Chinese funding and labour. The Chinese Government has also long provided generous government scholarships to Caribbean nationals whose countries recognize the PRC.

    China-Caribbean trade flows have increased and China has widened its trade surplus with the region. According to Ambassador Dr. Richard L. Bernal in his insightful book “Dragon in the Caribbean”, while Caribbean countries’ imports from China have grown “substantially and rapidly”, Caribbean exports to China have increased, but not nearly in as robust a manner. The Chinese Ambassador to Barbados has been reported as stating last week that in “the first six months of this year trade volume between Bridgetown and Beijing reached US$79.8 million”, a rapid increase.

    US-Caribbean Relations

    While China’s deepened economic engagement with the Caribbean is relatively recent, US-Caribbean relations with the region it considers its “backyard” or “third border” are longstanding, dating back to colonial times. The US is not just the region’s largest trading partner, but since the late 1980s many Caribbean countries have benefited from duty-free, quota-free access for most goods to the US market under the Caribbean Basin Initiative, a non-reciprocal goods-only preferences programme.

    The US is the major source market for Caribbean tourist arrivals, with the Caribbean Tourism Organisation reporting an estimated 14.9 million US arrivals to the region in 2017. US-Caribbean ties also manifest through the relatively large Caribbean-American diaspora which numbers approximately four million. The US is also a major (though declining) provider of foreign assistance to the Caribbean, and the Trump Administration has sought to scale back its assistance even further.

    However, the Caribbean region’s geopolitical significance to Washington has diminished since the end of the Cold War, and so has the level of development assistance in recent years. The US-Caribbean Strategic Engagement Act, which had bi-partisan congressional support, was passed in 2016 and signed into law under the then Obama administration as Washington’s attempt to re-engage with the Region. A multi-year Strategy, as required under the Act, was published in 2017.

    So, what may US-China trade tensions mean for the Caribbean?

    It is still too early to tell whether there will or has been any economic fall-out from the US-China tariff war so far on Caribbean economies. Most Caribbean countries are services-dependent making them generally more insulated from direct fall-out from the tariff hikes on global goods supply chains. Commodities-based economies, however, might suffer from softening commodities prices due to reduced Chinese demand.

    President Trump’s calculation may be that a trade war would be more damaging to China’s economy than to the US since it exports more to the US than viceversa. This gives Beijing less American imports on which it could levy tariffs. An already slowing Chinese economy would be further weakened by reduced American demand for its products.

    One possible negative consequence of any severe downturn in the Chinese economy may be a reduction in Beijing’s economic largesse in the region. But, the US economy may not be immune either. Though the US economy grew 4.2% in the last quarter and unemployment is low, these fortunes could be reversed due to Washington’s erratic trade policy and recent tax cuts. American farmers in key states are already warning about the possible impact of the tariff hikes. A downturn in the US economy could have a ripple effect on Caribbean economies, especially those dependent on US tourist arrivals. It is also worth pointing out that China is the US’ largest creditor, with a stockpile of over US$1 trillion worth of US Treasury securities. Beijing may see this as a source of leverage in this economic war, but a mass sell-off by China of its US debt could also backfire.

    Another possible channel of impact for Caribbean countries could be in the financial markets. Spooked by these trade tensions, investors may revert to less risky investment options, which may make bonds issued by emerging economies, like those in the Caribbean, less attractive, and also affect currency markets. Additionally, any downturn in the global economy precipitated by softening global demand due to the rising trade tensions and reduced investor confidence could have a ripple effect on the small open economies of the Caribbean. In its recently released Interim Economic outlook, the OECD warned that new restrictive trade measures were already impacting global trade flows, resulting in a slowdown in global trade volume growth in the first half of 2018.

    An upside to the US-China trade tensions, and this may already be playing out, is that Chinese exporters, faced with these high tariffs in the US market, will be looking at alternative markets for their goods. In light of Washington’s anti-China stance, Chinese firms may also seek out more investment-friendly climates in which to invest. In this case, the Caribbean also hypothetically stands to benefit.

    It should be noted as well that China increasingly sees itself as having similar interests to the Caribbean, and also as an ally to the region in multilateral fora. This week the Chinese government noted that it plans to step up its multilateral cooperation with the Caribbean Community (CARICOM), to help protect the integrity of multilateral institutions which have been increasingly under attack from the current unilateral stance taken by the Trump administration. WTO reform is one area in which China and the Caribbean could potentially collaborate, although China’s status as a developing country is one of the sore points for some WTO members, including the US.

    There may also be greater opportunities for Caribbean countries to meaningfully increase exports to China. However, this is easier said than done. Caribbean firms looking to export to, or invest in China, will need to overcome barriers to market access and penetration, which are not just legal/regulatory in the form of non-tariff barriers, but also linguistic and cultural.

    One way in which these barriers may be mitigated is by tapping into those persons who have knowledge of the Chinese market and culture. A growing number of Caribbean nationals have benefited from Chinese government scholarships. These persons not only speak the language, but know the culture and may have built up lasting contacts there. They could be employed as trade and investment liaisons in their countries’ diplomatic missions in China and their expertise used during trade shows to China. Local chambers of commerce, trade and investment promotion agencies, and individual firms looking to scope out the Chinese market, should also view these persons as useful sources of insights on the Chinese market and sources of contacts for exploring possible joint ventures and partnerships as market entry strategies.

    Notwithstanding, it is still too early to state definitively what impact the current US-China trade tensions will have for the Caribbean region. As such, Caribbean leaders and the business community should continue to monitor the situation closely, looking for ways to mitigate any possible channels of impact, but also areas where opportunities may arise.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • Caribbean Trade and Development Digest – September 16-22, 2018

    Caribbean Trade and Development Digest – September 16-22, 2018

    Welcome to the Caribbean Trade & Development Digest for the week of September 16-22, 2018! We are happy to bring the trade and development headlines and analysis from across the Caribbean Region and the world from the past week.

    It has been a busy week in trade news. The European Commission has published a concept paper outlining its initial proposals for WTO reform. On the Brexit front, EU leaders have rejected aspects of British Prime Minister Theresa May’s ‘Chequers Plan’ – post-Brexit economic proposals. China has cancelled upcoming trade talks with the US, as Washington readies to impose another $200 billion dollars worth of tariffs on Chinese imports. And those are just some of the highlights! Please see below for more headlines:

    REGIONAL

    St Maarten as CARICOM Associate Member “still under consideration”

    The Daily Herald: It has been more than half a decade since St. Maarten as well as Curaçao and Aruba have been approved for associate membership to the English-speaking countries dominated Caribbean Community Caricom, and that pending application is “still under consideration.” Read more 

    Jamaica gets green light to export mangoes to US

    Jamaica Observer: Jamaica has been granted permission to export mangoes to the United States, Agriculture Minister Audley Shaw said here on Monday. Read more 

    Interview: Dominican Republic-China ties open “world of opportunities,” says economy chief of Dominican Republic

    Xinhua: The newly established diplomatic ties between China and the Dominican Republic have opened a panoply of trade and investment opportunities for the two countries, according to the Economy, Planning and Development Minister of Dominican Republic Isidoro Santana. Read more 

    Puerto Rico businesses interested in Trinidad and Tobago

    LoopT&T: “These trade missions provide Trinidad and Tobago with opportunities to deepen relations and increase business,” said Trade and Industry Minister, Senator the Honourable Paula Gopee-Scoon at the launch of Trade Mission from Puerto Rico hosted by the United States Embassy, Trinidad on Tuesday.  Read more 

    Trinidad and Tobago to examine law prohibiting transshipment of honey from Guyana

    Stabroek: Trinidad and Tobago (T&T) has made a commitment to examine the law prohibiting the transshipment of honey from Guyana into the twin-island republic, its Agriculture Minister Clarence Rambharat says.

    The Bahamas reactivates WTO accession process

    WTO: WTO members praised The Bahamas’ commitment to reactivate and accelerate its WTO accession process after six years of impasse. Read more 

    Guyana seeking to finalise economic cooperation pact with Barbados

    Stabroek: Guyana is moving to finalise a framework agreement for economic cooperation with Barbados as part of government’s attempts to pursue economic cooperation in the region to nurture prosperity and global competitiveness, President David Granger said yesterday. Read more 

    BVI premier to lead first trade mission to Africa

    Caribbean News Now: British Virgin Islands premier and minister of finance, Dr Orlando Smith, will be leading a two-week trade mission to Africa in November. Read more

    China opens embassy in the Dominican Republic

    Golden Times: China’s national anthem was heard in the Dominican Republic on Friday, as China opened its embassy in the country’s capital Santo Domingo. Read more 

    China ready to enhance multilateral cooperation with Caribbean Community: Wang Yi

    Xinhua: China is ready to enhance cooperation with the Caribbean Community (CARICOM) in multilateral areas in order to better safeguard the rights and interests of developing countries, Chinese State Councilor and Foreign Minister Wang Yi said here Saturday. Read more

    Barbados to host one-day CSME Meeting

    Barbados Today: Guyana-based Caribbean Community (CARICOM) Secretariat says it is reviewing the CARICOM Single Market and Economy (CSME) administrative procedures to recommend ways of making them more simple and harmonised where possible. Read more

    Suriname-Indonesia joint commission promotes agriculture, trade and capacity building

    Caribbean News Now: The fifth Joint Council Commission between Indonesia and Suriname took place in Paramaribo on September 17-18 and the objective was to “recommit to strengthen cooperation that can translate into concrete results” between the two countries.  Read more 

    Haiti’s trade deficit with DR amounts to $816 million US

    HaitiLibre: The National Statistical Office (ONE) of the Dominican Republic has revealed that in 2017, trade between the two nations of the island reached 852.53 million US dollars. During this period, imports from Haiti amounted to $ 36.31 million, a positive trade surplus for DR of $ 816.22 million.  Read more 

    WTO members review two regional trade agreements covering Africa, the Caribbean and the EU

    WTO: WTO members reviewed Seychelles’ accession to the South African Development Community (SADC) trade protocol and the economic partnership agreement between the European Union and Cariforum states at the 18 September meeting of the Committee on Regional Trade Agreements. Members welcomed progress being made in the economic integration of the African region. Read more 

    Barbados welcomes skilled CARICOM nationals

    CaribbeanLife: While moving to tighten immigration security by introducing a state-of-the-art travel document, Barbados is opening its arms to Caribbean Community nationals who can help further develop the island. Read more 

    Wang Yi: CARICOM and China share extensive interests

    CGTN: Chinese State Councilor and Foreign Minister Wang Yi has called for closer cooperation between China and the Caribbean Community (CARICOM) to further build a community of shared future between the two. Read more 

    UWI a CARICOM integration leader

    Barbados Today: In order to assert themselves in the forefront of CARICOM integration, University of the West Indies academics must make their messages clear and easily understandable for both regional decision-makers and ordinary Caribbean citizens. Read more 

    INTERNATIONAL

    Theresa May sticks by Chequers plan for Brexit despite EU warning it ‘will not work’

    Sky News: Theresa May is defiantly sticking by her Chequers strategy for Brexit, despite the EU insisting a key element of her plan “will not work” and issuing a four-week deadline to agree a deal. Read more

    ‘Majority of Cabinet’ now supports move towards Canada-style Brexit deal

    The Telegraph: A majority of the Cabinet now supports moving towards a Canada-style trade deal with the EU following the outright rejection of PM Theresa May’s Chequers Plan. Read more 

    US-China trade talks stall amid tariff standoff

    CNN: Negotiations between the United States and China have stalled after President Donald Trump ordered new tariffs on Chinese goods. Read more 

    European Commission presents comprehensive approach for the modernisation of the World Trade Organisation

    EU: The EU’s approach to the World Trade Organisation (WTO) reform outlined in a document published today will be presented to EU partners in Geneva on 20 September during a meeting on that subject convened by Canada. Read more

    Mauritania signs the Regional Economic Partnership agreement between West Africa and the EU

    European Commission: Mauritania today became the 15th West African country to have signed the region-to-region Economic Partnership Agreement (EPA) with the European Union, an agreement negotiated with 16 countries of the region. Read more 

    EU-India “fully committed” to move forward on free trade pact: Official 

    Economic Times: The European Union and India are “fully committed” to moving forward on the proposed free trade agreement and discussions are on between the two sides on the much-delayed pact, according to an EU official. Read more 

    USTR Finalizes Tariffs on $200 Billion of Chinese Imports in Response to China’s Unfair Trade Practices

    USTR: As part of the United States’ continuing response to China’s theft of American intellectual property and forced transfer of American technology, the Office of the United States Trade Representative (USTR) today released a list of approximately $200 billion worth of Chinese imports that will be subject to additional tariffs. Read more 

    One year on, EU-Canada trade agreement delivers positive results

    European Commission: Friday 21 September will mark the first anniversary of the provisional entry into force of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada. Early signs show that the agreement is already starting to deliver for EU exporters. Read more 

     

    China-Singapore trade agreement upgrade to be concluded by year-end

    Channel News Asia: Singapore and China will conclude a substantive upgrade of their free trade agreement, which first came into effect in 2009, by the end of this year, said Deputy Prime Minister Teo Chee Hean on Thursday (Sep 20). Read more 

    South Korean Finance Minister Optimistic About Revised U.S. Trade Deal

    Wall Street Journal: South Korean Finance Minister Kim Dong-yeon expressed optimism about signing a revised U.S. free-trade pact into law, though lawmakers in Seoul have threatened to block the deal if Washington imposes new tariffs on Korean autos and auto parts. Read more 

    Japan mulls bilateral trade deal with US: Nikkei

    Reuters: Japan is mulling a bilateral trade agreement with the United States that would lower tariffs on U.S. agriculture imports in exchange for avoiding higher tariffs on Japanese autos, the Nikkei newspaper said on Saturday. Read more 

    US very very close to Mexico-US only deal: White House

    Global News: The United States is getting “very, very close” to having to move forward on its trade deal with Mexico without Canada, White House economic adviser Kevin Hassett said on Friday. Read more 

    Mexico will seek deal with Canada if NAFTA talks fail: Lopez Obrador

    Reuters: Mexico’s incoming government will pursue a bilateral deal with Canada if talks to overhaul the North American Free Trade Agreement falter, Mexican president-elect Andres Manuel Lopez Obrador said on Friday. Read more 

    Mercosur Holds First Negotiating Round for Korea Trade Deal, Looks to EU Next Steps

    ICTSD: Officials from the South American customs bloc Mercosur held negotiating meetings last week with South Korea and the European Union, respectively, as the coalition looks to cement trade ties with new partners. Read more 

    Global Trade is thriving (for some)

    Bloomberg: The West has turned hostile to open markets, but trade isn’t in retreat everywhere. In other parts of the world, it’s flourishing. Read more 

    The Global Trade System could break down

    Project Syndicate:  Ten years after the failure of Lehman Brothers, we know that multilateral action was crucial in preventing the so-called Great Recession from becoming even worse than it was. Back then, it was the global financial system that was tottering. Today, it is the global trade system that is in jeopardy. Read more 

    NEW ON CTLD BLOG

    This week, we were honoured to have our frequent guest author, Javier Spencer, return to give a critical analysis of what the Trump administration may mean for the WTO in this piece: Trump ‘trumps’ the WTO. You can also follow Javier on Twitter at @jav_d_spencer

    The following other articles were posted:

    EU makes initial proposals for WTO modernization

    Urgent WTO reform needed, says G20 Trade and Investment ministers

    Liked this issue? To read past issues of our weekly Caribbean Trade & Development Digest, please visit here. To receive these mailings directly to your inbox, please follow our blog.

  • EU makes initial proposals for WTO modernization

    Alicia Nicholls

    The European Commission has released a concept paper outlining its initial proposals for making the WTO more relevant and adaptive to current global realities and for strengthening its effectiveness.

    The paper originates from a mandate given by the European Council to the European Commission. It was published days after G20 trade and investment ministers called for urgent WTO reform and a month after United States’ President Donald Trump renewed his desire to withdraw the US from the WTO. It also comes against the backdrop of an escalation in unilateralism as Washington readies to impose a further $200 billion in tariffs on Chinese goods imports.

    In the paper, the Commission reiterates the EU’s “staunch” support of the multilateral trading system, noting that the 164-member WTO was “indispensable in ensuring free and fair trade”. It warns, however, that the WTO is under threat. It notes that the organisation’s current marginalisation by some of its key members stem from its failure to “adapt sufficiently to the rapidly changing global economy”.

    The 17-page concept paper offers proposals under three key areas and is in effect three papers in one. These areas are: rulemaking and development, regular work and transparency and dispute settlement.

    The Commission recommends that the EU continue to the work on the issues under the existing Doha mandate, but also states there is urgent need to broaden the negotiating agenda, building on several initiatives launched at the Buenos Aires Ministerial held in December 2017. Lamenting the current inadequacy of the WTO’s Agreement on Subsidies and Countervailing Measures (SCM), the Commission calls for improved transparency and subsidy notifications, rules which better capture subsidies granted by state-owned enterprises and stricter rules for the most trade-distortive types of subsidies.

    The Commission recommends updating current trade rules on services and investment, and further reduce existing market access barriers and discriminatory treatment of foreign investors. One issue of which the Commission was particularly critical was the need to tighten rules on forced technology transfer – practices by some States which force foreign investors to directly or indirectly share their technological innovations with the State or domestic investors. Indeed, intellectual property rights issues are a major sore point between US and China trade relations.

    The Commission also sounds the alarm about the “grave danger” to the WTO’s dispute settlement system posed by the US’ blocking of Appellate Body judge appointments. By end of September, the Appellate Body would have only the minimum (just three judges on its roster) and by December 2019 will have less than the minimum required to hear an appeal as two more retire. As such, the Commission has made some initial proposals for amendments which would take into account many of the US’ concerns with the WTO dispute settlement system which had been outlined in the President’s Trade Policy Agenda for 2018. For example, the Commission has suggested amending the 90-days rule contained in Article 17.5 of the Dispute Settlement Understanding to provide for more transparency and consultation.

    The Commission has made clear that the proposals were meant to be a basis for discussion with the EU Parliament, the Council and other WTO members, and did not prejudice the EU’s final positions on the matters.

    The concept paper makes for an interesting read and may be viewed here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.