Category Archives: WTO

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

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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.

Urgent WTO reform needed, says G20 Trade and Investment ministers

Alicia Nicholls

Trade and investment ministers of the world’s twenty leading industrialised economies (G20) have called for urgent reform of the World Trade Organisation (WTO) to ensure its ability to “face current and future challenges”. This is according to the Ministerial Statement released following the G20 Trade and Investment Ministerial Meeting held on September 14, 2018 in Mar del Plata, Argentina.

The 164-member WTO serves not just as the only multilateral forum for the negotiation of global trading rules, but is a forum for the orderly and peaceful resolution of trade disputes amongst WTO member countries. While the Ministerial Statement does not detail what specific reforms the G20 Ministers deem necessary, it implores all G20 member countries and other interested parties to explore ideas to safeguard the continued relevancy of the multilateral trade governance organisation. G20 member countries have also ‘stepped up’ dialogue on current international trade developments.

The statement comes in the wake of increased threats to the multilateral rules-based trading system. The most recent are the current escalating trade tensions between the US and China manifested in the imposition of billions of dollars’ worth of tariffs on goods by both sides. It also comes  amidst new threats by United States’ President, Donald Trump, to withdraw the US from the WTO, which he perceives to be inherently biased towards the US. This is, despite independent research showing that the US, which is the most litigious of the WTO member countries, wins about 91% of the trade disputes in which it was the complainant, and 89% of cases as respondent. Despite this positive track record, the Trump administration continues to block Appellate Body judge selections, which threatens to grind the WTO’s once vaunted dispute settlement body system to a halt.

Concerns about the relevance of the WTO predate the Trump administration, with a major concern being the WTO’s consensus-based decision making model which requires agreement by all member countries for progress to be made. Out of frustration with the slow pace of the Doha negotiations and the refusal to include new emerging issues into negotiations, there was a marked shift in the US focus during the Obama Administration from the now defunct Doha Development Round negotiations towards the negotiation of mega regional trade agreements. However, the Trump administration marks the first time a US administration has openly threatened to withdraw from the WTO, an organisation it was instrumental in pushing for and forming.

One positive aspect to the Trump administration’s anti-WTO stance and actions is that they have given new urgency to the need to reform the WTO to secure its relevance, efficiency and effectiveness for all members, including small vulnerable economies (SVEs). SVEs account for only a tiny fraction of world trade, but generally have high levels of trade openness and a narrow range of exports and export partners. As such, any unfair trade practices by one of their major trading partners which prejudices an SVE’s exports, could have a deleterious impact on its economy and development prospects.

Despite the problems inherent with the consensus-based decision making model, the removal of such a system would likely undermine the WTO’s legitimacy and disenfranchise less powerful member countries, such as SVEs. The WTO is of particular importance to SVEs because it is one international organisation in which they have equal voice, and because, at least in theory, it provides a mechanism for small States to hold hegemons to account when they engage in unfair trade practices. This, however, has not always been the case. For instance, Antigua & Barbuda’s inability to receive compensation from the United States following the rulings in the US-Antigua Gambling case is the most glaring example of how power asymmetries affect small States’ ability to hold powerful States to account, even where rulings have been made in their favour.

There have been numerous calls for reform of the WTO over the years, as well as several studies, including this one by Bertelsmann Stiftung, which have posited recommendations. Encouragingly, current Director General of the WTO has expressed support and willingness for reform of the organisation, noting that some countries have already begun talks. It is hoped that CARICOM countries, as well as other SVEs, will demand a voice in these discussions and offer their ideas for reforming the WTO to ensure it meets their needs. The presence of CARICOM at the G20 Trade and Investment Ministers meeting, represented by Jamaica, is a good start.

Despite the WTO’s shortcomings, the fact that non-Members continue to pursue accession to the WTO show that countries generally still see value in the organisation.

In essence, the G20 Statement shows support in principle, at least from a majority of the world’s largest economies, for the continuation of the rules-based multilateral trading system which the WTO affords and states commitment towards making the reform of the WTO an urgent priority. Now these words must be translated into action.

The full G20 Trade and Investment Ministers’ Ministerial Statement may be read 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.

WTO: Trade tensions could sabotage global trade growth momentum

Alicia Nicholls

The World Trade Organisation (WTO) has predicted that global merchandise trade growth will remain strong in 2018 and 2019, but has cautioned that this momentum is contingent on the policy choices taken by governments.

This forecast was disclosed by WTO Director General, Roberto Azevedo, in a press conference held last week. According to Mr. Azevedo, global merchandise trade grew an estimated 4.7% in 2017 and is forecast by WTO economists to grow 4.4% in 2018 and by a more modest, 4.0% in 2019.

He noted that trade volume growth in 2017 was the most robust since 2011, with Asia being responsible for much of the recovery. He noted that South and Central America and the Caribbean made a positive contribution for the first time since 2013 due to Brazil’s economic recovery. The ratio of trade growth to GDP growth will be slightly lower in 2018 at 1.4 in 2018, down from 1.5 in 2017. Commercial services trade experienced strong growth in 2017 after two years of lacklustre growth.

The escalating global trade tensions, particularly between the US and China, cast a shadow over the forecast, as Director-General Azevedo strongly cautioned that continued positive trade growth could be “quickly undermined” if Governments turned to trade restrictive policies and engaged in retaliation. Mr. Azevedo pointedly stated that “a cycle of trade retaliation is the last thing the world economy needs”, noting that trade tensions may already be impacting business confidence and investment decisions. He further warned that missteps on trade and monetary policy “could undermine economic growth and confidence”.

In an appeal to WTO Member States to resort to the rules-based system as opposed to unilateral action, Mr. Azevedo added that “pressing trade problems confronting WTO Members is best tackled through collective action”.

The full WTO press release 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.

 

Caribbean Trade and Development Digest – October 15-21, 2017

Welcome to the Caribbean Trade and Development Digest for the week of October 15-21, 2017! We are pleased to share some of the major trade and development headlines and analysis across the Caribbean region and the World. We hope you enjoy this edition.

REGIONAL

Cuba, T&T trade ties growing, says Cuba ambassador

Trinidad Guardian: Despite the American economic embargo against Cuba, T&T businesses continue to show interest in commercial ties with the island said Cuban Ambassador Guillermo Vázquez Moreno. Read more

(Jamaica) Senate passes law to speed up exports

Jamaica Gleaner: The Senate yesterday passed legislation amending the Processed Food Act and the Processed Food (General) Regulations, 1959, removing the requirement for export certificates to facilitate the implementation of the Automated System for Customs Data (ASYCUDA). Read more

COTED green-lights Agriculture Regional Emergency Response Team

ST Kitts & Nevis Observer: The Council for Trade and Economic Development (COTED) has approved the Regional Agriculture Emergency Response Sub-Committee to provide prompt action to help the agriculture sector in Caribbean Community (CARICOM) member states to rebound after natural disasters. Read more

CARDI ready to take action to rebuild agriculture in Barbuda, Dominica

Caribbean News Now: The Caribbean Agricultural Research and Development Institute (CARDI) has already begun taking action to restore the battered agriculture sectors in Barbuda and Dominica. Read more

UWI launches Centre for Reparations Research

Jamaica Observer: The University of the West Indies (UWI), Mona, this week officially launched Centre for Reparation Research at the campus. Read more

Meat safety training for Caribbean countries

Jamaica Observer: A two-day regional training workshop covering hygiene provisions for raw meat, meat preparations and manufactured meat from the time of live animal production up to the point of retail sale, gets underway here on Tuesday. Read more

INTERNATIONAL

ACP trade ministers reaffirm commitment to multilateral trade system

Caribbean News Now: Ministers and senior officials responsible for trade from 79 African, Caribbean and Pacific (ACP) countries reaffirmed their strong and resounding commitment to the multilateral trading system, at the conclusion of the 20th ACP Ministerial Trade Committee meeting held in Brussels on 18-19 October. Read more

Ukraine files WTO Complaint over Russia, import, transit restrictions

WTO: Ukraine has requested WTO consultations with Russia regarding Russian measures affecting trade in certain products such as juice, alcoholic beverages, confectionery and wallpaper from Ukraine. The request was circulated to WTO members on 19 October. Read more

Dubai set to host Africa trade summit

The Standard: Dubai will this November host African heads of State and business leaders at a forum to discuss the continent’s economic outlook and investment opportunities for countries in the United Arab Emirates (UAE). Read more

Canada ‘extremely worried’ about NAFTA: Ambrose

CTV: Behind the scenes Canadian officials are “extremely worried” about where the North American Free Trade Agreement negotiations are headed, and it’s time to be worried, says Rona Ambrose, a member of Canada’s NAFTA Advisory Council. Read more

UK Trade Secretary Dismisses ‘Nightmare’ of No-deal Brexit

Bloomberg: U.K. International Trade Secretary Liam Fox said leaving the European Union without a deal for future business isn’t a “nightmare scenario” for Britain. Read more

US will not interfere in EU trade with Iran, says Tillerson

Reuters: The United States does not aim to impede European trade and business transactions with Iran despite President Donald Trump’s decision last week to decertify the 2015 nuclear agreement, Secretary of State Rex Tillerson told the Wall Street Journal. Read more

‘We need trade deals’: Swedish PM opposes Macron’s call to slow down

The Local: Swedish Prime Minister Stefan Löfven has said he opposes moves by French President Emmanuel Macron to slam the brakes on free trade deals. Read more

New Zealand’s Ardern wants to balance trade pact with housing pledge

Bloomberg: Incoming leader Jacinda Ardern says New Zealand will still seek membership in the proposed Trans Pacific Partnership even as she strives to honor her election campaign pledge to clamp down on foreign property speculators. Read more

Details of a massive trade deal among 11 heavyweight economies may be announced next month

CNBC: Ten months after President Donald Trump abandoned what was pegged as the world’s biggest trade deal, its surviving participants may be close to a new agreement. Read more

US pushes ‘fair trade’ as economic talks with Japan advance

Bloomberg: The Trump administration is advocating for a more balanced trade relationship with Japan as high-level economic talks with the Asian nation advance this week in Washington, according to Vice President Mike Pence. Read more

WTO: On 17 October the WTO issued the panel report in the case brought by Brazil in “Indonesia – Measures Concerning the Importation of Chicken Meat And Chicken Products” (WT/DS484). Read more

Azevedo underlines growing importance of services trade

WTO: Speaking at the Global Services Summit in Washington D.C. on 17 October 2017, Director-General Roberto Azevêdo highlighted that trade in services accounts for almost 50 per cent of world trade today. Read more

Afghanistan and Brazil welcomed as observers to WTO Government Procurement Agreement

WTO: The WTO Committee on Government Procurement agreed on 18 October to grant observer status to Afghanistan and Brazil. Members welcomed Afghanistan’s commitment to seek eventual accession to the Government Procurement Agreement (GPA). Some also expressed hopes that Brazil might, in the future, consider acceding to the Agreement. Read more

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Belize undergoes third WTO Trade Policy Review

Photo credit: Alicia Nicholls 2016

Alicia Nicholls

Belize underwent its third World Trade Organisation (WTO) mandated Trade Policy Review over the period April 24th and 26th, 2017. Trade Policy Reviews are a mandatory exercise under the WTO’s Trade Policy Review Mechanism. Each WTO member country’s national trade and other trade-related policies are peer-reviewed by the Trade Policy Review Body (the WTO General Council acting under special rules and procedures).

The frequency of the reviews depends on the country’s share of world trade. The purpose of the trade policy reviews is to help to ensure transparency of member countries’ trade policies. Belize has previously undergone reviews in 2010 and 2004.

Some key findings from Belize’s 2017 review

These findings were taken from the WTO Secretariat Report and the Chairman’s concluding remarks.

The Report noted that several issues had affected Belize’s economy during the review period, including the decline in oil prices, disease outbreaks affecting its agriculture sector and the impact from the loss of correspondent banking relationships due to the de-risking practices of major global banks.

Areas of praise

Members praised Belize for the following:

 

  • Its diversification into tourism which is now the major driver of the country’s economy, and the adoption of the country’s first National Trade Policy Framework.
  • Belize’s participation in the WTO. Some members also suggested that the country establish a permanent mission in Geneva.
  • Belize was commended  for being among the first Members to ratify the Trade Facilitation Agreement and for having notified its Category A commitments.  Belize also recently established a National Committee on Trade Facilitation
  • Members commended Belize’s efforts to modernize its trade regime and customs procedures.
  • Reduction by half of the number of products subject to import licensing, but some members noted that this was followed by tariffication, resulting in some applied MFN tariffs exceeding their bound rates.
  • Noting Belize’s membership of the Caribbean Community (CARICOM), Members encouraged Belize to continue engagement in regional integration and trade liberalization schemes.
  • Belize was commended for its acceptance of the Protocol amending the TRIPS Agreement; while some Members encouraged Belize to join the WIPO treaties.
  • The establishment of Belize’s first Internet Exchange Point to reduce the costs of local internet traffic.
  • Members acknowledged the recent reforms to Belize’s financial services regulatory framework.
  • Some Members welcomed Belize’s efforts to improve its air transport infrastructure and air links, and encouraged Belize to replicate such efforts to enhance land and maritime transport.

Areas of concern

  • Members, however, were concerned that Belize had not submitted notifications in a number of areas, and urged for compliance with the WTO requirements.
  • Several Members highlighted Belize’s three incentive programmes granting export subsidies which should have been eliminated by 31 December 2015. However, they acknowledged Belize’s ongoing efforts to amend the relevant legislation.

As noted by the Chairman, Belize was commended for providing prompt and helpful answers to all written questions submitted in advance by members, as well as to all that came after the deadline.

Belize is the fourth WTO member country to undergo review so far for the year, following Sierra Leone, Japan and Mexico. The other CARICOM member state to be reviewed this year is Jamaica which will undergo its review on September 13 & 15.

The documents from Belize’s review, including the full WTO Secretariat Report and the Chairman’s Concluding Statement, may be viewed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a 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.

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