Caribbean Trade Law and Development

Category: WTO

  • Caribbean Trade & Development Digest – April 21-27, 2019

    Caribbean Trade & Development Digest – April 21-27, 2019

    Welcome to the Caribbean Trade & Development Digest for the week of April 21-27, 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.

    THIS WEEK’S HIGHLIGHTS

    This week, Caribbean representatives were among 5,000 delegates from around the world who attended the Second Belt and Road Forum for International Cooperation in Beijing April 25-27, 2019. The key note speech delivered by President Xi Xinping of China may be viewed here, while the Joint Communique of the Leaders’ Roundtable may be accessed here.

    REGIONAL NEWS

    Jamaica’s annual exports up by one-third

    Jamaica Gleaner: Jamaican exports grew by nearly 38 per cent last year, a pace that was nearly four times faster than the rise in imports. Read more 

    EU blacklisting causing irreparable harm to Caribbean says St Kitts-Nevis foreign minister

    Caribbean News Now: St Kitts and Nevis wasn’t blacklisted by the European Union in a revised blacklist for tax havens outside the EU last month; however, that hasn’t stopped foreign affairs minister Mark Brantley denouncing what he considers unfair targeting of Caribbean countries. Read more

    Closer EU-Caribbean ties mean greater prosperity for all

    EU Observer: This month ministers and officials from across the Caribbean assembled in Jamaica to discuss the future of our collective relationship with the European Union. This was the latest in a series of forums that have taken place in the past eighteen months, all with the aim of working toward a bolstered agreement that will further integrate our political and economic interests. Read more 

    Renewable energy is making its way into Guyana’s agriculture sector

    IICA: A pilot project by the Inter-American Institute for Cooperation on Agriculture (IICA), the Organization of American States (OAS), and the state-owned company, Guyana Power & Light Inc., will promote the adoption of renewable energy in the Guyanese agriculture sector. The project will unfold in the final six months of 2019. Read more 

    China says Latin America and Caribbean will benefit significantly under BRI

    Jamaica Observer: China’s Ambassador to Dominica Lu Kun says his country’s Belt and Road Initiative (BRI) will bring tangible benefits to Latin America and the Caribbean (LAC). Read more 

    Ghana and Suriname sign four agreements

    Government of Ghana: Ghana and Suriname on Tuesday signed four separate agreements as part of efforts to strengthen the bilateral relations between the two nations. Read more 

    ITFC signs 6 trade deals worth over $1.1bn, including with Suriname

    Trade Arabia: ITFC’s framework agreement with the Republic of Suriname will see it mobilize up to $75 million financing for SME’s, exports and lines of finance to local banks, in addition to a Murabaha agreement over three years to boost the import of essential goods. Read more 

    King Sugar takes a break as Belize exports fall sharply

    Breaking Belize News: Belize’s number one export is grinding into high gear for the end of the season in May and June. But in March it counted for just under three million of Belize’s almost $26 million in exports, representing a slash by more than half of March 2018’s total. Read more 

    China and the Caribbean’s future 

    CGTN: China’s highly anticipated second Belt and Road International Cooperation Forum (BRF) wrapped up on April 27. Initially not including Caribbean nations, the country’s signature policy has gained increasing momentum in the region since 2017. So far, several Caribbean countries, such as Barbados, Jamaica, Dominica and Grenada, etc., have signed up to the initiative, which provides a useful context for offering some reflections on the place of China in the future development of the independent states of the English-speaking Caribbean. Read more 

    COTED officials hold preparatory meeting

    CARICOM: Work in preparation for the Forty-Sixth Ministerial Meeting of the Council for Trade and Economic Development (COTED) began on Thursday. Read more

    CARICOM leaders to meet in Trinidad next week

    CARICOM: Caribbean Community (CARICOM) leaders will meet in Trinidad and Tobago early next month to discuss security issues within the 15-member regional integration movement. Read more 

    Future EU-Caribbean Relations in New ACP-EU Partnership

    ACP: As the EU is working to modernise its relations with 79 countries in Africa, the Caribbean and the Pacific (ACP), the two groups’ chief negotiators Neven Mimica and Robert Dussey met with ACP Caribbean leaders for a dedicated dialogue on the regional EU-Caribbean pillar in the framework of the post Cotonou ACP-EU partnership. Read more 

    INTERNATIONAL NEWS

    Eswatini walking tightrope to become Africa’s trade hub

    Yeni Safak: The Kingdom of Eswatini in Southern Africa is walking a tightrope in its bid to become Africa’s trade hub and is competing against some of the continent’s biggest economies to win hosting rights for the African Continental Free Trade Area (AfCFTA) Secretariat. Read more 

    AfDB signs $50m agreement with Natixis to boost trade finance in Africa

    Ghanaweb: The African Development Bank (AfDB) has signed a $50 million risk participation agreement (APR) with investment and corporate bank Natixis. Read more 

    EU and Japan in delicate trade talks

    EU Observer: Top EU officials will meet Japanese prime minister Shinzo Abe on Thursday (25 April) in Brussels as world leaders prepare for their G20 meeting in June in Osaka, Japan. Read more 

    USTR Releases Annual Special 301 Report on Intellectual Property Protection and Review of Notorious Markets for Piracy and Counterfeiting

    USTR: The Office of the United States Trade Representative today released its annual Special 301 Report on the adequacy and effectiveness of trading partners’ protection of intellectual property rights and the findings of its Notorious Markets List, which highlights online and physical markets that reportedly engage in and facilitate substantial copyright piracy and trademark counterfeiting. Read more 

    Turkey-Africa trade volume totals $179 billion in last decade

    Daily Sabah: Turkey’s improving relations with African countries have also been reflected in the growing trade volume. Between 2009 and 2018, bilateral trade volume between Turkey and the African continent stood at $179 billion. Read more 

    P&O sues over £33m Eurotunnel payout in Brexit ferry fiasco

    The Guardian: P&O Ferries is suing the government over its £33m settlement with Eurotunnel, in the latest controversy over the Department for Transport’s fraught no-deal Brexit preparations. Read more 

    Amid Brexit uncertainty and allegations, UK lawmakers consider Mueller-like inquiry

    ABC News: The parallels between Russian meddling in the U.S. presidential election and the Brexit referendum in Britain are striking. In fact, calls among lawmakers have been growing for a public inquiry, according to The Guardian, into Prime Minister Theresa May’s Brexit strategy. Read more 

    ‘Running OUT OF TIME’ – EU expert issues DAMNING statement on May’s latest extension

    Express: Although Mrs May has managed to buy some valuable time to get her Brexit deal through, the UK is only just coming to the end of the beginning of the whole process. Dr Simon Usherwood, deputy chair at The UK in Changing Europe think tank, has argued that with every extension, the UK is cutting into the crucial transition stage of the Brexit negotiations. Read more 

    U.S. organized labor opposes USMCA in current form, says official

    Japan Times: The head of the largest U.S. labor union said Tuesday he opposes ratification of the new North American free trade pact, because he doubts Mexico will enforce labor reforms required by the deal. Read more 

    U.S. considers concessions on drug protections in China talks: Sources

    BNN Bloomberg: The Trump administration may concede to a Chinese proposal that would give less protection for U.S. pharmaceutical products than they receive at home, according to people familiar with the matter, a move that could draw opposition from the American drug industry. Read more 

    U.S. and Japan Push for a Trade Deal Following Failed Pacific Partnership

    New York Times: President Trump said on Friday that trade talks between the United States and Japan were “moving along very nicely” and suggested a deal might be reached by late May as he met with Shinzo Abe, the Japanese prime minister, at the White House. Read more 

    Donald Trump pulls US out of UN Arms Treaty

    Euronews: Donald Trump has said he is pulling the United States out of an international arms treaty designed to prevent weapons being sold to those who abuse human rights. Read more 

    Qatar withdraws measures established against UAE at WTO

    Al Arabiya: Qatar has decided to withdraw its measures against the UAE in a significant concession aimed at averting the consequences of the UAE’s case in WTO against an illegal Qatari ban on UAE goods and services. Read more 

    U.S. says WTO national security ruling ‘seriously flawed’

    Reuters: The United States said on Friday a World Trade Organization ruling on national security was “seriously flawed”, a warning not to use it as a precedent to judge U.S. President Donald Trump’s tariffs on imported steel and cars. Read more 

    Japan seeks to join WTO dispute consultations over India’s import duties on ICT products

    Business Today: Japan has expressed interest to join consultations in a dispute case filed by the EU in the WTO against India’s import duties on some information and communications technology products, including mobile phones, according to a communication of the World Trade Organization. Read more

    Wine, beef imports rise after free trade pacts

    NHK: Japan’s Finance Ministry says wine and cheese imports from Europe, and beef imports from Canada and New Zealand, increased considerably up to March after two free trade deals came into effect. Read more

    WTO NEWS

    WTO Forum looks at addressing food safety concerns through trade and cooperation

    WTO rules on food safety play an important part in enabling governments to protect their citizens while ensuring trade can play its critical part in maintaining timely supplies of safe and affordable food, said Director-General Roberto Azevêdo in opening the International Forum on Food Safety and Trade taking place at the WTO on 23-24 April. Read more 

    DDG Wolff suggests members look at accessions as source of inspiration for WTO reform

    Is there scope for members to look at the experience of WTO accessions for additional inspiration in the ongoing WTO reform debate, asked Deputy Director-General Alan Wolff at a meeting of the Informal Group of Acceding Governments on 25 April. Read more

    DDG Wolff welcomes timely and substantive discussions on trends in food safety and trade

    Speaking at the pre-event session of the International Forum on Food Safety and Trade on 23 April at the WTO, Deputy Director-General Alan Wolff stressed the importance of interlinkages between trade and food safety standards, as recognized by WTO members in the Sanitary and Phytosanitary Measures Agreement. Read more 

    International Forum on Food Safety and Trade

    Remarks by WTO Director General Roberto Azevedo. Read more

    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.

     

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

    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.

  • WTO: Trade tensions pose greatest risk to trade growth

    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?

    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.