Category Archives: WTO

Caribbean Trade & Development Digest – April 7 – 13, 2019

Welcome to the Caribbean Trade & Development Digest for the week of April 7-13, 2019! We are happy to bring you the major trade and development headlines and analysis from across the Caribbean Region and the world from the past week.

HIGHLIGHTS

In this week’s highlights, the United States Trade Representative (USTR) released a list of Products for Tariff Countermeasures in Response to Harm Caused by EU Aircraft Subsidies. In response, the EU has indicated it aims to put tariffs on $12 billion of US exports.

In Brexit news, the EU granted the Theresa May UK Government a six month extension to October 31, 2019. Read more here.

Trade was a major topic looming over the IMF/World Bank Spring Meetings held this week. The IMF released its April Outlook in which it noted a deceleration in global growth on the back of several factors, including rising trade tensions. Read the Outlook here. Also watch the panel discussion on “How Trade can promote growth for all” here.

The 12th Annual Update on WTO Dispute Settlement, which provided an overview and discussion on WTO dispute settlement cases and developments in 2018, was held this week. Watch the playback here!

REGIONAL NEWS

Trade between GCC, Latin America and the Caribbean hit $16.3b in 2018

Gulf News: Trade flows between GCC countries and Latin America and the Caribbean (LAC) reached $16.3 billion (Dh59.86 billion) in 2018, while the UAE remained a top trading partner in the Gulf region for LAC countries, according to a new report conducted by Inter-American Development Bank (IDB) in cooperation with the Dubai Chamber of Commerce and Industry. Read more 

Consumer and Business Confidence Up in Jamaica

Caribbean360: Consumer and business confidence in the economy have recorded increases for the first quarter of 2019. Read more

Jamaica deepens ties with China

Jamaica Observer: The Government yesterday signed a Memorandum of Understanding with the People’s Republic of China on that country’s Belt and Road Initiative (BRI), to deepen cooperation and partnership between the two nations for economic development. Read more

Guatemala’s Fishing Trade Spells Trouble for Belize

The Reporter: An investigation into Guatemala’s thriving shark fishing industry reveals serious concerns for our country and fisherfolk. In February 2019, a team of investigative journalists from The Reporter traveled to southern Belize, then to Guatemala to evaluate the number and scope of sharks, fish and other marine species poached from Belizean waters and exported to Guatemala. Their findings were startling and it was discovered that this issue has deep roots. Read more 

The Dominican Republic opens plant species and variety registration office

Fresh Plaza: The Ministry of Agriculture opened the Plant Species and Varieties Registration Office (OREVADO), which seeks to guarantee the institutional framework for people who want to develop new varieties of vegetable crops, innovate in the transfer of technology or invest in production, i.e. breeders. Read more 

Dominican Republic leads Caribbean economies

Global Finance: The economy of the Dominican Republic is set to surpass its regional neighbors this year, notching the highest growth in the Caribbean region. The DR has been gaining attention for its ability to maintain steady robust economic growth. In 2018, GDP rose by 7%, and the latest report by the country’s central bank says all industries are expanding—and that its free-trade zones in particular are drawing investment. Read more

Atlantic International Bank maintains innocence in US Federal Trade Commission accusations but faces international ramifications

LoveFM: Atlantic Bank International is currently unable to process wire transfers, in and out, for its overseas customers who are in need of Belize currency. The stoppage in this service is the direct result of the Bank of New York issuing a ban against Atlantic Bank International after the US Federal Trade Commission has roped in Atlantic Bank International as an ally in the Sanctuary Bay multi-million-dollar scheme that saw several US investors lose money in a project that never came to fruition. Read more

CDB Grant Stirs Up Fuss About Regional White Sugar

Jamaica Gleaner: The April 2 announcement of a more than US$97,000 gift from the Caribbean Development Bank, CDB, to Caricom for a study on plantation white sugar has Jamaican manufacturing representatives lining up on different sides of the hot-button issue. Read more 

Govt to build nation’s quality standards system – Sutherland

Barbados Today: “Government considers this goal as urgent, and of very
high priority, in our efforts to enhance the national competitiveness of our local micro-small and medium size (MSMEs) businesses, industries and the promotion of fair trade,” he said. Read more 

CARICOM vital to regional development: Grenada’s new envoy

Caribbean News Service: CARICOM has been an indispensable force, says new envoy. Read more 

Call for Caribbean to speak out

Barbados Today: The Minister for tourism has issued a call for the Caribbean to take a defiant stand against the international community’s imposition of standards on small states – even as his own Government was racing to comply with new financial reporting rules set by a global watchdog. Read more

US report names several Caribbean nations as “major money laundering” centres

Caribbean News Now: In the latest US International Narcotics Control Strategy Report (INCSR), volume two dedicated to money laundering, the report lists all major Caribbean and Central American countries as “Major Money Laundering Jurisdictions” for the year 2018: Antigua and Barbuda, Aruba, The Bahamas, Barbados, Belize, British Virgin Islands, Cayman Islands, Colombia, Costa Rica, Cuba, Curacao, Dominica, Dominican Republic, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, St Kitts and Nevis, Saint Lucia, St Vincent and the Grenadines, St Maarten, Suriname, Trinidad and Tobago and Venezuela. Read more 

INTERNATIONAL NEWS

Argentine Elections Could Narrow Brazil’s Mercosur Reform Path

Stratfor: Brazilian President Jair Bolsonaro’s push to reform the trade policy of the Common Market of the South (Mercosur) risks collapsing without the support of Argentina. Read more

Ambassadors pave the way for EU-US trade talks, despite French opposition

Euractiv: Europe is set to start trade talks with the US after ambassadors gave their green light on Thursday (11 April) to a proposed mandate for the European Commission to conduct the negotiations on behalf of the 28 EU member countries. Read more

EU27 is now free to hold summits without the UK

Euractiv: The EU27 will be free to hold official Council meetings and make decisions without the UK despite the country still being a member of the Union, in a move seen as a success for France’s President Macron, who led calls for the restrictions. Read more

Tokyo and Washington finally set to kick off trade talks as American farmers fume over poor Japan access

Japan Times: This week, negotiators from Japan and the United States will meet in Washington to address something that U.S. President Donald Trump considers to be long overdue: trade negotiations to open the Japanese market to more American goods. Read more

China-US trade deal could threaten Beijing’s other trading partners, IMF says

South China Morning Post: Any trade deal between China and the United States must comply with multilateral rules, as not doing so may create economic risks for the Asian nation’s other major trading partners, the International Monetary Fund said. Read more 

South Korea WTO appeal succeeds in Japanese Fukushima food dispute

Reuters: South Korea won the bulk of its appeal on Thursday in a dispute at the World Trade Organization over import bans and testing requirements it had imposed on Japanese seafood in the wake of the 2011 Fukushima nuclear disaster. Read more 

China has good reasons to join Pacific Trade pact, but obstacles remain

The Strait Times: If China joined a massive Pacific trade deal, it could create hundreds of billions of dollars in extra income and spur domestic reforms, say analysts, but signing up would be far easier said than done. Read more 

China, US could win big on no-deal Brexit: UN

France24: If Britain leaves the EU without a deal, the bloc and Britain’s smaller trading partners stand to lose big, but Beijing and Washington could reap huge benefits, the UN said Tuesday. In a fresh report, the UN Conference on Trade and Development (UNCTAD) examined what repercussions it would have for Britain’s trading partners if the country crashes out of the European Union without a deal. Read more 

Commission releases detailed information on requirements for EU goods exported to the UK in case of a hard Brexit

EU: The European Commission has included in its Market Access Database detailed information on the rules that the UK would apply on its imports from the EU in the event of a hard Brexit. It is based on information made publicly available by the United Kingdom authorities. Read more

EU foreign investment screening regulation enters into force

EU: The new EU framework for the screening of foreign direct investments has officially entered into force on 10 April 2019. The new framework is based on proposal tabled by the European Commission in September 2017 and will be instrumental in safeguarding Europe’s security and public order in relation to foreign direct investments into the Union. Read more

India reduces trade deficit with China by $10 billion in FY19

CNbcTV: India’s trade deficit with China fell by $10 billion to $53 billion in FY19 on the back of lower imports, officials told CNBC-TV18. The downtick in the merchandise trade gap was also aided by new market opportunities arising out of the US-China trade war in the neighbouring nation. Read more 

India’s trade ministry says no legal basis to ban e-cigarette imports

Economic Times: India’s trade ministry says it cannot impose a ban on electronic cigarette imports as there is no legal basis for doing so, an internal government memo viewed by Reuters shows, in a boost for those looking to tap into the country’s growing vaping market. Read more 

Africa’s new free trade area faces bumpy road to full implementation

Global Trade Review: The Gambia has become the 22nd nation to ratify the African Continental Free Trade Area (AfCFTA), the number required for the agreement to take effect. While this marks a significant step towards the continent’s ambition to create a single market, the free trade area will face a bumpy road to full implementation. Read more 

Why no-deal Brexit could be a win for South Africa

Business Tech: A no-deal Brexit could damage smaller economies trading with the United Kingdom (UK) – but bring substantial gains for China and other trading partners such as South Africa. Read more 

A US-EU trade war would be a political and economic mistake, says French finance minister

CNBC: With global growth already slowing down, starting a trade war now between the U.S. and the European Union would be both a political and economic mistake, French Finance Minister Bruno Le Maire said Thursday. Read more 

Brexit: UK and EU agree delay to 31 October

BBC: European Union leaders have granted the UK a six-month extension to Brexit, after late-night talks in Brussels. The new deadline – 31 October – averts the prospect of the UK having to leave the EU without a deal on Friday, as MPs are still deadlocked over a deal. Read more

EU Commission split on fertiliser anti-dumping duties

Independent: A serious spat involving two arms of the EU Commission has erupted over attempts by the fertiliser industry to have anti-dumping duties imposed on liquid urea ammonium nitrate (UAN). Read more 

EU-U.S. Trade War Escalates Over Disputed Aviation Subsidies

Bloomberg: The European Union is preparing retaliatory tariffs against the U.S. over subsidies to Boeing Co., significantly escalating transatlantic trade tensions hours after Washington vowed to hit the EU with duties over its support for Airbus SE. Read more

Report to Congress on China’s Engagement with Latin America and the Caribbean

The following is the April 11, 2019 Congressional Research Service Insight report, China’s Engagement with Latin America and the Caribbean. Read more 

EU aid increases, bucking global trend

Euractiv: Development aid spending by EU members saw a slight increase to $87 billion in 2018 (€77 billion) compared to 2017, according to new data published by the Organisation for Economic Co-operation and Development (OECD). Read more 

WTO NEWS

VACANCY: Young Professionals Programme – Apply by April 15, 2019

The WTO Young Professionals Programme was launched in 2016 as an opportunity for qualified young professionals from developing and least-developed countries that are members of the WTO to enhance their knowledge regarding WTO and international trade issues. Read more 

WTO’s Trade Policy Review Mechanism turns 30

The WTO marked on 12 April the 30th anniversary of the Trade Policy Review Mechanism (TPRM), which over the last three decades has contributed to ensuring and facilitating the smooth functioning of the multilateral trading system by enhancing the transparency of WTO members’ trade policies. Read more 

Registration opens for screening of second compliance panel meeting in “EC — Large Civil Aircraft”

At the request of the parties in the dispute “European Communities and Certain Member States — Measures Affecting Trade in Large Civil Aircraft: Recourse to Article 21.5 of the DSU by the European Union and Certain Member States” (DS316), the panel has decided to invite officials of WTO Members and Observers, and the general public, to view a recording of its substantive meeting with the parties and consenting third parties. The public viewing will take place at the WTO headquarters in Geneva on 13 May 2019. Read more 

DG Azevêdo: rules-based trading system is “irreplaceable” but must be ready to evolve

At a speech delivered to the Peterson Institute in Washington DC on 11 April, Director-General Roberto Azevêdo underlined the critical importance of the WTO to the stability and predictability of the global trading system. At the same time “it is clear that the WTO has to be better, faster and more responsive” to the challenges facing the organization and the system as a whole. Read more 

WTO hosts closing ceremony of Model WTO 2019

Over 70 students from around the world came to the WTO’s headquarters on 11 April for the conclusion of Model WTO 2019, a week-long simulation of WTO negotiations organized by a group of students from the University of St. Gallen with the support of the WTO. Read more

WTO establishes panel to review Turkish duties on Thai air conditioners

At a meeting of the Dispute Settlement Body (DSB) on 11 April, WTO members agreed to Thailand’s request for the establishment of a dispute panel to rule on duties levied by Turkey on imported Thai air conditioners. Members also considered Russia’s request for a panel regarding European Union anti-dumping duties on Russian steel products and formally adopted the compliance panel and Appellate reports in the EU’s complaint against US subsidies for Boeing. Read more

Appellate Body issues report regarding Korean restrictions on Japanese food imports

On 11 April the Appellate Body issued its report in the case brought by Japan in “Korea — Import Bans, and Testing and Certification Requirements for Radionuclides” (DS495). Read more

WTO, IMF and World Bank leaders stress vital role of trade in reducing poverty

Director-General Roberto Azevêdo joined with IMF Managing Director Christine Lagarde and World Bank CEO Kristalina Georgieva on 10 April to argue for renewed efforts to leverage trade as a force to reduce poverty. DG Azevêdo argued that the current trade tensions could undermine recent progress in tackling poverty. “We cannot afford to go down this path,” he said. The three leaders were speaking at a joint WTO-IMF-World Bank event in Washington DC titled “Beyond Uncertainty: Leveraging Trade to Reduce Poverty”, held alongside the World Bank-IMF Spring meetings. Read more 

EU initiates WTO dispute complaint against Turkish measures affecting pharmaceuticals

The European Union has requested dispute consultations with Turkey regarding various requirements imposed by Turkey on the production, import and approval for reimbursement, pricing and licensing of pharmaceutical products. The request was circulated to WTO members on 10 April. Read more 

Trade Policy Review: Samoa

The first review of the trade policies and practices of Samoa takes place on 10 and 12 April 2019. The basis for the review is a report by the WTO Secretariat and a report by the Government of Samoa. Read more 

CTLD BLOG NEWS

Read my latest article with Dr. Jan Yves Remy, Deputy Director of the University of the West Indies’ Shridath Ramphal Centre for International Trade Law, Policy & Services exploring the issue of special and differential treatment in the World Trade Organization from a Caribbean perspective Special and Differential Treatment at the WTO: A Caribbean Perspective.

The Caribbean Trade & Development Digest is a weekly trade news digest published by the Caribbean Trade Law & Development Blog. Liked this issue? To read past issues, please visit here. To receive these mailings directly to your inbox, please follow our blog.

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WTO: Trade tensions pose greatest risk to trade growth

Alicia Nicholls

Rising trade tensions and economic uncertainty account largely for the deceleration in global trade growth experienced in 2018 and will continue to pose the greatest risk to growth in 2019. This is according to the World Trade Organization (WTO) in its latest Trade Statistics and Outlook released on April 2, 2019.

As I had noted in my first blog post for the year, 2018 was without doubt a challenging  year for global trade policy. Among the highlights (or low lights) were the tariff tit for tat between the US and China until a truce in December 2018 brought a halt to the planned imposition of more tariffs, and the imposition by the US of punitive tariffs on steel and aluminium imports, which led to retaliation by other major powers, most notably, the EU.

It is little surprise then that according to WTO economists, global trade under-performed in 2018 expanding by 3.0%, down from the 4.6% above-average growth recorded in 2017 and slower than the 3.9% which was projected for 2018 in their September 2018 forecast. The uncertainty has led to a dampening of investment and consumption. Weak import demand in Europe and Asia depressed global trade volume growth in 2018. Higher energy prices were partly responsible for the 10% increase in the value of merchandise trade in 2018.

In his brief remarks during a press conference on the latest forecast, the WTO’s Director General, Mr. Roberto Azevedo, noted that “the fact that we don’t have great news today should surprise no one who has been reading the papers over the last 12 months. Of course there are other elements at play, but rising trade tensions are the major factor”.  The Director General further explained that the range of new and retaliatory measures tariffs introduced affected widely trade goods. Other factors which affected global trade growth in 2018 were the weaker global economic growth, volatility in financial markets and tighter monetary conditions in developed countries, among others.

World commercial services trade was much more positive with the value rising 8% in 2018 on the back of strong import growth in Asia.

Looking forward, WTO economists now forecast world merchandise trade growth to slow further to 2.6% in 2019, which is a downward revision from their forecast of 3.7% in September 2018. WTO economists estimate some pickup in trade growth to 3.0% in 2020, with stronger growth predicted for developing economies than developed ones.

They, however, caution that this forecast could be affected negatively if trade tensions continue to escalate, or positively if they ease. Director General Azevedo reiterated that “it is therefore increasingly urgent that we resolve tensions and focus on charting a positive path forward for global trade which responds to the real challenges in today’s economy”.

The full forecast may be viewed here, while Mr. Azevedo’s remarks are available 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.

Global Trade Policy in 2019: What to Watch?

This article has been updated.

Alicia Nicholls

Happy New Year to all! 2018 was without doubt a nail-biting year for global trade policy developments. In our first blog for the year, we take a look back at some of the key trade policy developments in 2018 and five developments to watch for 2019!

  1. US-China Trade Tensions and Truce?

Starting with the scary; 2018 saw an escalation in global trade tensions among major trading powers. Without doubt, the election of President Donald Trump in the US in 2016 has led to a more nationalistic, protectionist and unilateral turn in US trade and foreign policy. Under his ‘America First’ ideology, President Trump issued proclamations hiking tariffs on imported steel and aluminum under the guise of national security, with only a small handful of countries being spared.

Tensions between the US and its other key trading partners, such as Canada and the EU, were inflamed, but China was the main target of US trade action. According to the BBC, the US has imposed tariffs on over $250 billion dollars of Chinese goods and had threatened an additional $260 billion, while China has imposed tariffs on $50 billion dollars of US goods and threatened tariffs on an additional $60 billion. Both countries agreed to a truce in December to suspend any further tariff impositions for a 90-day period while talks resume.

Trade talks held between the US and China this week have been hailed as positive by both sides, but the two economic behemoths are still a long way from resolving long-simmering tensions. US President Donald Trump appears confident that China will acquiesce to the US’ demands given the current slowdown in the Chinese economy. However, the US has not escaped the trade tensions unharmed as, for example,  soybean farmers have been affected by the reduced Chinese demand for their produce.

The WTO has warned that the uncertainty around the escalating trade tensions was beginning to adversely impact business and investment confidence, with potential implications for continued global trade growth. Moreover, in its Global Economic Prospects – January 2019 report, ominously titled ‘Darkening Skies’, the World Bank has warned of darkening clouds over the global economy and softening global trade and investment flows.

2. WTO Reform

On the multilateral scene, the crisis in the WTO’s Appellate Body due to the US’ blockage of appointments appears to have given new political will and urgency to the need to reform the WTO, which is facing its greatest existential crisis since its founding in 1995.

The US’ continued blockage of appointments/re-appointments to the organisation’s seven-member Appellate Body has now resulted in only three sitting Appellate Body members – the minimum for the Body to function.

Several WTO members have tabled proposals for reforms on discrete issues, such as transparency/notification, while the European Union (EU) and Canada have both placed more comprehensive reform proposals on the table, including reform of the dispute settlement system.

However, WTO members are still a long way from deciding on how deep and wide-ranging the reform agenda should be. The US, which has for a long time expressed grave reservations about the Appellate Body, has so far not been convinced by any of the proposals tabled.

This year will be critical for deciding on the way forward for WTO reform, especially since the loss of yet another Appellate Body member will result in the Appellate Body being unable to operate, with grave implications for the prompt settlement of disputes and the rules-based multilateral trading system, on a whole.

3. Regional Trade Agreements – AfCTA, USMCA, CPTPP, EU-Japan 

On the regional trade agreement scene, there were several positive and major developments in 2018. One of the most exciting was in March, 2018 when forty-four African states signed the Africa Continental Free Trade Agreement (AfCTA) in Kigali, Rwanda. Since then, five other States have signed the agreement. Thirteen African States have ratified the agreement thus far and further ratifications will be needed before it comes into effect.

President Donald Trump made good on one of his major trade policy promises – the renegotiation of the North American Free Trade Agreement (NAFTA) with Canada and Mexico to make it ‘fit for purpose’ for the 21st century. In November 2018, the three countries announced they had agreed an agreement under a new name – the United States, Mexico and Canada (USMCA) Agreement. Some of the major changes include more stringent rules of origin (RoO), extension of terms of copyright protection, a sunset clause and provision for a 6-year review.  The Agreement is awaiting ratification in the three countries.

After the US’ withdrawal from the Trans-Pacific Partnership (TPP) under President Trump, the remaining eleven TPP parties signed a successor agreement termed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in March 2018. The Agreement came into effect on December 30, 2018, and its parties account for an estimated 14% of global GDP.

Five years after negotiations began in 2013, the EU and Japan signed the Economic Partnership Agreement and the EU-Japan Strategic Partnership Agreement. The Agreement, which is on track to come in effect in February 2019, is the first free trade agreement to make explicit reference to the Paris Climate Change Agreement which was signed in 2015.

4. Bolsonaro’s Brazil

South America’s largest country, Brazil, elected Jair Bolsonaro who took office as president at the beginning of 2019. Riding the wave of right-wing populism, Mr. Bolsonaro has expressed support for the unilateral foreign policy espoused by his US counterpart and has expressed apathy about Mercosur. Brazil is one of the most influential emerging economies, both hemispherically and internationally. The implications of the South American nation’s shifting foreign and trade policy will, therefore, be key to watch.

5. Brexit Uncertainty

Of course, one of the biggest trade policy developments to watch in 2019 will be the UK’s impending withdrawal from the EU – Brexit – which, as it stands, is to take place on March 29, 2019.

After nearly two years of intense negotiations, the EU-27 and the UK finally arrived at a Draft Agreement on the UK’s Withdrawal from the EU and a Political Declaration Setting out the Framework for the Future Relationship between the EU and the UK in November 2018. The EU-27 leaders endorsed the two texts at a special emergency meeting of the European Council.

However, in the face of strong opposition to the deal, particularly the ‘backstop’ provisions regarding the Northern Ireland/Ireland Border, UK Prime Minister Theresa May cancelled a crucial House of Commons vote on the deal which she likely would have lost. Mrs. May has sought to obtain further binding concessions from the EU, but without success thus far.

This week, the British House of Commons MPs voted in favour of an amendment requiring the Prime Minister to present to Parliament a Brexit Plan B within three days, in the event that MPs reject the current Draft Withdrawal Agreement in their vote rescheduled for next week Tuesday. Meanwhile, Labour Leader Jeremy Corbyn is calling for a general election to break the Brexit deadlock.

The Brexit deadline looms, but the May Government has ruled out requesting an extension under Article 50. With the timeline for the UK’s withdrawal ticking and the real threat of a potentially economically disastrous ‘no-deal’ exit, this will be one of the major trade policy issues to watch in 2019.

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.

Why WTO Reform Matters for Caribbean Small States

Alicia Nicholls

At the conclusion of its 47th Meeting this week, the Caribbean Community (CARICOM) Council for Trade and Economic Development (COTED) released a statement in support of the multilateral trading system and its guardian, the World Trade Organisation (WTO), which are currently under threat. All independent CARICOM member States, with the exception of the Bahamas which is currently in the process of accession, are WTO members and have a rich history of engagement in the WTO. WTO reform is more than a moot point for the Caribbean, but a question of economic and sustainable development importance for the region.

What is the Multilateral Trading System and the WTO?

The multilateral trading system was formed at the end of the Second World War with the creation of the General Agreement on Tariffs and Trade (GATT), the progenitor to the WTO, in 1947. This rules-based system has provided for the predictable and peaceful conduct of global trade for more than a half century to the benefit of the global economy.

Since its inception in 1995, the WTO has been the guardian of the multilateral trading system. Its 164 members account for over 97% of global trade, with 22 other countries currently in the accession process. Despite its flaws, some of which I will come to shortly, the WTO has been an important building block in the global economic governance structure. Among its functions, the organisation serves not just as a permanent forum for negotiation of global trading rules among its members, but its dispute settlement system provides to WTO members an exclusive and compulsory system for the timely and orderly settlement of trade disputes.

Why the need for reform?

The core functions of the WTO have become increasingly under strain. Calls for reform are not new, but have intensified in recent years. Without doubt, the United States’ threat of withdrawal unless its own demands are met, has invigorated political will for reform of the WTO.

Firstly, the negotiation function of the WTO is in a paralytic state given the inability of member states to conclude the Doha Development Agenda – the latest round of trade negotiations which were launched at the Doha Ministerial in 2001 and whose only major agreement so far is the Trade Facilitation Agreement. The paralysis has been due largely to current decision-making procedures and the increased number of members which has made multilateral rule-making on ever more complex trade issues difficult. Secondly, the US has been blocking the appointment of judges to the WTO’s Appellate Body, which means there are currently only three judges, the minimum needed to hear a dispute. The once vaunted system will grind to a halt by December 2019 when two other judges’ terms are up for renewal. Thirdly, there are concerns with the lack of compliance by some States with notification and transparency requirements which impacts on the WTO’s monitoring function.

In response, many countries have not just pivoted their attention away from the multilateral table towards the regional arena, but there is growing protectionism and resort to unilateral measures. In its latest economic outlook released November 21st , the Organisation for Economic Cooperation and Development (OECD) warned that global GDP growth has peaked on the back of a slowdown in global trade and investment flows owing to current trade tensions. The OECD has, therefore, called for renewed international cooperation and dialogue to tackle global trade issues and reform of the global trading system. Similar warnings have been made by other multilateral institutions and bring into sharp focus the importance of the stability of the multilateral trading system for the global economy in general, and for Caribbean small states, in particular, whose small open economies are susceptible to global economic shocks.

These systemic risks suggest that the WTO requires more than superficial tinkering, but comprehensive, inclusive and transparent reform. The challenge is making the WTO, an institution born in a different era and different economic landscape, “fit for purpose” for twenty-first century global trading realities, and in a way that caters to the unique needs of its smallest and most vulnerable members.

Why does WTO reform matter to Caribbean small States?

Caribbean small states, and small States in general, comprise only a tiny fraction of world trade, but their equitable integration into the global economy is essential for their economic survival. These States comprise primarily small island States, but also some small continental States. Compromised by limited bargaining power and inherent economic and other vulnerabilities, they depend on the certainty and predictability of the rules-based multilateral trading system not just to ensure that their traders face fair trading conditions in external markets, but that they could hold (at least in theory) larger states to account through the WTO’s dispute settlement body when they do not play by the rules.

It is of importance to Caribbean small States that updated trade rules for the twenty-first century not be made in negotiation theatres to which they are often not party (such as in Regional Trade Agreements and Mega-Regional Trade Agreements), but in the multilateral system where they have an equal seat at the table.

What proposals are on the table?

Thankfully, the silver lining to this story is that most WTO members have thus far expressed continued support for the multilateral trading system and have exhibited interest in WTO reform. The EU and Canada have both publicly shared their initial reform proposals and Canada held a meeting with thirteen other ‘like-minded’ governments in Ottawa to discuss WTO reform. The proposals have touched, for example, on decision and rule-making, improving the dispute settlement function and improving transparency and notification requirements.

In November 2018, the US, EU, Japan, Argentina and Costa Rica laid a proposal for tightening transparency and notification requirements under the WTO agreements. Among the recommendations were changes to the current Trade Policy Review mechanism, special consideration for developing countries and penalties for non-compliance by members.

Many of the proposals currently on the table have direct implications for Caribbean small States. For example, the EU and Canadian proposals evince growing appetite by the more advanced economies to change the current model of decision-making, that is, the consensus-based approach which requires absence of any formal objection to the decision. This approach has made the WTO one of the most democratic of the multilateral economic institutions. It allows small States to have bargaining power they otherwise would not have had and by mere numbers has led to a shift in the balance of bargaining power in favour of developing countries in the WTO. Though this approach has accounted for some of the stalemate, the wholesale move to a less democratic form of decision making would be disadvantageous to small States beset by limited negotiation might.

There are also calls for reforming the application of special and differential treatment (SDT) since currently any WTO member can self-designate as a developing country, entitling it to the flexibilities under the Agreements. This concern is due to the inclusion of large emerging economies such as China, India and Brazil in particular as developing countries. While not specifically supporting the creation of special categories, the EU concept paper notes the lack of nuance in the concept of a ‘developing country’. This is a good reason why small States should redouble their advocacy efforts for the translation of the Small Vulnerable Economy (SVE) informal group into a formal sub-category of developing countries.

What should we do?

The current crisis in the multilateral trading system has implications for Caribbean small states which rely on the certainty of the multilateral trading system and on the health of the global economy. It, however, also opens the door for our States to advocate for reforms as well. CARICOM countries have always played an active role in WTO negotiations, including pushing for the SVE grouping. For this reason, the COTED statement supporting the multilateral trading system and the WTO, and demanding a space for small States in the negotiations, was a good initial step.

The next step should entail formulating our own carefully considered responses to the proposals already on the table and advancing our own concrete proposals where we deem necessary. For instance, as noted before, given the dissatisfaction by advanced economies with the current carte blanche approach to SDT, this may be the opportune time to raise the reconsideration of making the SVE category a formal category. Additionally, as the on-going US-Antigua Gambling dispute shows, even though a small State may win a dispute, obtaining compliance is another matter. For this reason, dispute settlement reform is another area on which Caribbean small States should take particular interest.

Indeed, CARICOM governments will not have to depend solely on the vast knowledge and experience of their technocrats, but there are an increasing number of regional scholars and academic institutions, such as the University of the West Indies’ Shridath Ramphal Centre for International Trade Law, Policy & Services, which are pro-actively considering these issues, and whose technical expertise and research capacity could be drawn upon. There is also no need to reinvent the wheel given the growing corpus of literature, developed by the Commonwealth Secretariat for example, which has analysed the drawbacks of the WTO for small States and making proposals for reform. This work can be drawn upon in the formulation of our own proposals.

The Caribbean has a strong history of multilateral engagement within the WTO. The current situation gives us an appropriate moment to contribute to the comprehensive reform of the guardian of the multilateral trading system to ensure it remains fit for purpose for 21st century trading realities and for the global economy, and that it better serves its smallest and most vulnerable members. Caribbean small States can ill-afford to be perceived as backseat participants, but must be fully engaged and mobilized in this critical moment.

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.

The Sino-American Challenge to Multilateralism

Rasheed J. Griffith, Guest Contributor

Nations don’t trade. Metaphors can both clarify and deceive. Trade is no exception. The current commentary on trade relationships between nations has elevated the commercial profit-loss mechanisms of international trade to an abstract state level apparatus. When we say states trade what we really mean is the firms in different states have commercial relationships. Firms have a singular motive: to make profit. Similarly to making the individual-firm distinction, we must always remember to make the state-firm distinction. This distinction is further amplified when we are discussing large economy states. They too have a singular motive: geopolitical dominance.

The persistent US trade deficit with China implies that US consumers are able to buy cheaper goods from China. But it is also a signal of the erosion of the US global geopolitical dominance caused by economic decline. In the US economy financial goods are replacing physical goods. The chart below shows the increase in the financial component of US GDP relative to manufacturing.

Americasfireeconomy

Stock market capitalization of the US relative to GDP is 153%. For China it is 65% and Germany 54%. I am familiar with arguments that claim this is not problematic because countries trust the US markets most.

The 2008 financial crisis gave a glimpse of what could happen to the US economy if the financial sector collapsed.

The US government was barely able to patch up the financial markets by using excessive money creation and debt redistribution (i.e quantitative easing) in 2008. This was a necessary move but it means the Federal Reserve System balance sheet is now bloated. In another crisis, quantitative easing will likely not be effective. At that point, the money and capital markets of the US will no longer be as attractive in the long term, resulting in the dollar losing its global reserve currency status. At this point, the geopolitical dominance of US will weaken. And the main adversary (which is now China) will strive to make sure the US remains in a weakened position.

Very few people seem to understand this. But the Communist Party of China (CCP) understands. In 1999, two colonels of the People’s Liberation Army published Unrestricted Warfare[1]. The book gave strategies for defeating the USA without direct conventional military engagement. One of the core strategies was the use economic policies to eat away at the US economy. Having China being the core manufacturing hub of the world was one such strategy. This was made explicit with the ‘Made in China 2025’ policy recently launched by the CCP[2].

China did not achieve its spectacular growth through free trade. All of China’s trade is managed by the CCP. When discussing the USA-China trade relationship we must always acknowledge that China has an authoritarian government that will create and implement policies that they believe will benefit China irrespective of what the Chinese citizens think or what multilateral organizations demand. When China ascended to the WTO in 2001 it was naively expected that China would conform to the rules of that organization. Authoritarian governments, however, do not follow neoliberal rules.

Starting around 1978 under Deng Xiaoping, the CCP began their reforms from Soviet style system wide planning to state capitalism directed by large and powerful state owned enterprises (SOEs)[3]. Although China ascended to the WTO in 2001, this model never changed. On the Fortune 500 list of largest global companies, China comes in a close second (120) behind the US (126). Japan (52) is quite far behind. But what is shocking is that 93% of the Chinese firms on the list are SOEs. The CCP heavily subsidies their SOEs, and creates rules specifically favorable to them; to the detriment of foreign entities.

The USTR Section 301 report identified several instances where China has violated the WTO rules to which it signed in 2001. These concern trading rights, import regulations, export regulations, intellectual property rights, technology transfer, foreign investment, and so on[4]. The US has complained to the WTO about China on 22 occasions and China has still persisted in violating the rules. The White House Office of Trade and Manufacturing report goes on the dissect the persistent economic aggressions of China[5].

What choice does the US have if it is not able to deal with China through WTO processes? Multilateral processes only work if everyone agrees to adhere to the same rules. Of course , though, these rules were largely set by the US. In dealing with China, the WTO is absolutely ineffective. There is no democratic fallout if China refuses to acknowledge multilateral rules (as seen explicitly in China’s absolute refusal to acknowledge the Philippine’s win in the Hague in matter of the West Philippines Sea/South China Sea). It is likely that any strong ruling in the WTO against China will similarly fall on deaf ears. (Similarly the US has substantially disregarded a WTO ruling after losing a case to Antigua).

In any case, it has gotten to a point where countries cannot simply halt or significantly decrease trade with China in the form of sanctions. The US, then, is forced to use geoeconomics – the use of economic instruments to further geopolitical goals.

As the President of the United States, Trump is right to engage China directly. His strategy is clever: robe a geostrategic containment engagement in bland terms of trade rhetoric. And this is by no means outside the modus operandi of the US. During the Cold War period the US actively practised a strategy of containment against the Soviet Union. In fact, China has accused the US of trying to economically contain China[6]. But of course, China has been engaging in geoeconomics as well recently.

For example, in 2012 China allowed farmers from the Phillipines to export their bananas to China but when the bananas arrived they were left to rot on the dock. This left the Philippines banana planters with neither stock nor payment (30% of Philippines banana exports go to China). This was used as a tactic to weaken the Philippines position when the tensions over the South China Sea were rising[7]. Another example is when China blocked rare earth metals to Japan almost crippling Japanese tech manufacturing, until Japan finally conceded, over another maritime dispute[8]. In both cases, the WTO was impotent.

What Trump gets wrong is that tariffs are not sufficient. And he failed to properly define a long term strategy to deal with China. Without such a strategy the US will continue ad hoc aggressions.

China has been shown to disregard all multilateral rules if it wants to. But even so, it is difficult being upset with China. China has succeeded in the most comprehensive and rapid poverty alleviation program in all of human history. China was able to lift over 600 million people out of poverty in less than 30 years[9]. Following along this path, it should be expected that the CCP is mounting a restoration of China to compensate for its decline after the late 1850s: the “century of humiliation[10]”. Few commentators remember that for 18 of the last 20 centuries China commanded a greater share of world GDP that any other country. Henry Kissinger reminds us that as recent as 1820 China “produced over 30% of world GDP – an amount exceeding the GDP of Western Europe, Eastern Europe, and the United States combines.”[11]

Wang Yi, however, recently attempted to assure the UN that China has no ambition of hegemonic dominance[12]. I believe that is an empty statement given Xi Jinping’s expansive Belt and Road Initiative (BRI) which has been added to the Party constitution of the CCP[13]. From the perspective of CCP, as Lee Kuan Yew frames it, China is not looking to become dominant; rather, it is looking to restore dominance. It is a different geopolitical mindset.

This to me is the crux of the Sino-American challenge. The US is right that China is not properly following WTO rules because it has disregarded many of those rules to accelerate its economic growth. And it has been exceedingly effective. But if China were to conform to the WTO rules, it would not match the model that has been so successful.

Multilateral trade rules were not designed by China to fit China’s model (authoritarian government, state capitalism). They were primarily designed by liberal democracies – the US in particular. Both of these nations have fundamentally different economic models and justifiable geopolitical reasons for disregarding WTO rules to protect (or increase) their geopolitical dominance.

We are living in a time of multilateralism. But this time is anomalous. Dani Rodrik has explained in detail why “free trade agreements” have little to do with free trade[14]. Those agreements are primarily political documents. In fact, “76 percent of existing preferential trade agreements covered at least some aspect of investment (such as free capital mobility) by 2011; 61 percent covered intellectual property rights protection; and 46 percent covered environmental regulations”[15]. These are political documents that attempt to alter a nation’s domestic policies with the preferences of international actors.

This is not possible with a powerful authoritarian government. It is a grave error to treat China as just another Western country; like how you would treat Japan. China is an ideological adversary to the US that has now become an economic adversary. When at odds with geopolitical motives multilateralism always fails. Geoeconomic escalation is not only justified but it is inevitable.

Rasheed Griffith’s professional interests include Southeast Asian Monetary Policy and AML Compliance. He may be contacted at rasheed.j.griffith AT gmail.com. You can also follow him on Twitter at @RasheedGriffith

[1] http://www.c4i.org/unrestricted.pdf

[2] https://supchina.com/2018/06/28/made-in-china-2025/

[3] https://orca.cf.ac.uk/99467/1/Publication_2016_IJEMSc.pdf

[4] https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF

[5] https://www.whitehouse.gov/wp-content/uploads/2018/06/FINAL-China-Technology-Report-6.18.18-PDF.pdf

[6] http://www.atimes.com/article/us-tariffs-are-containment-beijings-message-fed-by-the-white-house/

[7] https://www.asiasentinel.com/society/the-china-philippine-banana-war/

[8] https://www.nytimes.com/2010/09/23/business/global/23rare.html

[9] https://en.wikipedia.org/wiki/Poverty_in_China#Poverty_reduction

[10] https://www.theatlantic.com/china/archive/2013/10/how-humiliation-drove-modern-chinese-history/280878/

[11] https://www.amazon.com/China-Henry-Kissinger/dp/0143121316

[12] http://usa.chinadaily.com.cn/a/201809/30/WS5bafb647a310eff303280520.html

[13] https://idsa.in/idsacomments/what-the-inclusion-of-bri-in-the-chinese-constitution-implies_jpanda_071117

[14]https://drodrik.scholar.harvard.edu/files/dani-rodrik/files/what_do_trade_agreements_really_do.pdf

[15] Limão, Nuno. 2016. “Preferential Trade Agreements.” NBER Working Paper 22138, March

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.

Trump ‘trumps’ the WTO

Javier D. Spencer, Guest Contributor 

Javier

THE WTO

The 1995 organization has done considerably well to date as an arbiter of international trade. The organization was created as a response to the economic situation in the 1930’s that resulted in global tensions. Its predecessor, the General Agreement on Tariffs and Trade (GATT), was ostensibly limited in scope and so, the consensual demand was for an inclusive and comprehensive institution to govern and promote international trade.

Achieving inclusive and comprehensive trade was daunting; nevertheless, the organization has attained the aforementioned buzzwords and continues along this trajectory. For instance, the WTO started with only 123 signatories under the Marrakesh Agreement in 1994 and today has over 160 members, with pending ascensions. Additionally, it is remarkable to note that the WTO agreements are comprehensive. They cover trade in goods, services, agriculture, sanitary and phytosanitary measures, intellectual property, rules of origin, subsidies, dispute settlement, and many more.

The WTO rests on its founding principles of non-discrimination, reciprocity, transparency, safety values, and binding and enforceable commitments such as the tariffs commitments in order to liberalize and promulgate free trade as a global public good. With these at its core, it is fair to say that the organization has lived up to its core function and objective.

Having regard to the organization’s core functions and objectives, governing global trade is no easy feat, especially taking into consideration competing political and economic interests among WTO member . The organization is a rules-based organization and these rules are agreed upon by consensus of member states. In this regard, the organization’s Dispute Settlement system remains a feather in the cap and its prized arm. The Dispute Settlement Body (DSB) has provided stability to the global economy by ensuring that agreed rules are enforced. Since its existence, the DSB has successfully deliberated on many cases that have maintained the integrity of the WTO rules.

Despite its successes, the future of the WTO remains vulnerable. At present, it is on the receiving end of dire threats from one of its founding members – the United States (US). Interestingly, the US led the global effort to establish the machinery to manage global trade. However, the present President of the United States (POTUS) lashes the organization as the worse deal for the US. POTUS’ actions to date are alarming – from delaying the appointment of members to the WTO Appellate body to dusting off Section 301 of the Trade Act to a brewing trade war with China and other countries to the burial of the NAFTA to public statements of leaving the WTO and much more. We should be worried about the future of the WTO.

TRUMP

The WTO is lauded by many countries as a fair and just organization that seeks to level the playing field and as much as possible promulgate all-inclusivity. However, not all world leaders share these sentiments. One example is the President of the United States, Donald Trump. Trump was elected as the 45th President of the United States and has been in office since January 2017. He triumphed over his opponent with his patented and infamous campaign slogan, “Make American Great Again”, a slogan that is purported to usher in better economic times for the United States of America. It was envisioned to focus on military operations and to focus on implementing mechanisms to fillip the job market and ailing industries in the US. The implication of this, of course, is that Trump’s actions would focus on US’ external trade policy. However, at what cost is Trump willing to “Make America Great Again?” Does he mean to make America great again by ruffling the feathers of a peaceful, collaborative, rules-based multilateral trading system?

It is without a doubt that Trump has very little faith in multilateral organizations. To date, the POTUS has adopted many controversial positions in global affairs, with harsh jabs towards the WTO. He has aired that the WTO does not serve the interest of the US and as such, the organization is biased and unfair to the country. He has further iterated that the WTO and the EU are collaborating against the US and as a result, transactions by these organizations are very ‘bad’ for the United States. These sentiments all lead to a threat to withdraw the US from the organization – much like the US withdrawal from the UN Human Rights body. The threats and dire warning aimed at the multilateral organization from the POTUS show isolationism, protectionism, nationalism, and I even dare say reverse globalization.

The stance on global trade, in particular, and actions that are taken show that POTUS’  external trade policy remains a mystery. One thing is for certain, he strives to deliver on his campaign promise of remedying the trade [im] balances that the US has with other countries, in an effort to “Make America Great Again”. The achievement of this infamous slogan has led to a trade war with China, sanctions against Turkey, a failed trilateral negotiation of NAFTA and other trade turbulences – with surely more to follow.

In early July, in a claim to fix the unfairness in trade, the US imposed 25% tariffs on $34 billion worth of Chinese goods. This then extended to steel and aluminium imports from Canada and the European Union. (The move to extend the imposed tariffs to the other countries could be looked at from the lens of ensuring that Chinese firms do not engage in deflective trade strategies by establishing firms in these territories and export under the guise of these territories.) As the US imposed these tariffs on Chinese goods, China returned the favour by imposing tariffs on US goods and as such, a tit-for-tat trade war ensued. For Trump, he deemed that the imposition of tariffs was necessary and served as “national security” interest of the United States. This exemption clause is enshrined in the 1994 GATT Article XXI of the WTO agreement and is certainly one loophole of which the POTUS will take full advantage.

The example of the US-China brewing trade war definitely puts the global rules-based system in peril. It brings into question the authority or jurisdiction of the WTO to advise the US of the legitimacy of “essential” or national security claims. However, on the other hand, supporting Trump will legitimize a major loophole in the global trade rules. At this crossroads, the WTO faces an uphill battle with a world leader’s determination to dismantle decades of the global trade order.

The POTUS’ actions to weaken the organization goes beyond Section 301 of the Trade Act of 1974, which was the US domestic legislation used to spur the trade war. In fact, there is a draft a bill that the POTUS has advanced that would have dire consequences for the WTO and the global trading system. The Fair and Reciprocal Tariff Act (FART Act) is de facto a mechanism for the POTUS to completely disregard the WTO rules. In other words, the Act confers rights on the POTUS to adjust tariffs rates with countries outside of the WTO jurisdiction, without much red tape and authorization of Congress.

 WHAT WILL HAPPEN?

With all that is happening now in the global trade environment, the brewing question is what would happen if the WTO were dismantled by the US. As a global hegemon, the US’ exit of the WTO will certainly cause a domino effect. Other countries will follow and move to impose tariffs to their absolute advantage – making the rules-based organization and its decades of work useless.

POTUS certainly has no faith in the multilateral trading system and is reshaping the US’ external trade policy by striving for bilateral trade agreements with countries. There is nothing inherently wrong with negotiating bilateral agreements with third-party states. In fact, there are provisions made within the WTO rules-based system that enables countries to create regional trade agreements. However, it would seem that POTUS’ aim is to completely ignore the rules and create his own rules. Rules that would only advance the economic interest of the US, which may not maintain the integrity and ethos of free and fair global trade. This form of trade policy is one where we will see that the US will use economic pressure to its whims and fancy.

Many cases have proved the WTO’s worth in regulating global trade so that there is an equal opportunity available to all member states. Developing countries and countries of the Global South should make it a priority to save the WTO. In particular, the Caribbean Small Vulnerable Economies (SVEs) should focus on the future of the WTO against the backdrop of POTUS’ withdrawal threat. The US remains the Caribbean’s largest trading partner for both imports and exports.  So, what would a US withdrawal mean for these Member States? An appropriate question considering US-Antigua Gambling Case. Antigua is yet to be compensated and the possibility of the US complying with the WTO’s ruling is unpromising. With the US’ pronounced economic influence on the region, its withdrawal would further subject the Caribbean SVE’s to the US “beggar-thy-neighbour” trade policy.

It would be unfortunate for all if the actions of one President collapse a just and fair trading system.

Javier Spencer, B.Sc., M.Sc., is an International Business & Trade Professional with a B.Sc. in International Business and a M.Sc. in International Trade Policy. His professional interests include Regional Integration, International Business, Global Diplomacy and International Trade & Development. He may be contacted at javier.spencer at gmail.com.

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