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TWN
Info Service on WTO and Trade Issues (Dec22/08) Geneva, 14 Dec (D. Ravi Kanth) — China, at the 15th Trade Policy Review (TPR) of the United States at the World Trade Organization on 14 December, severely criticized the trade policies adopted by the US, calling Washington a “destroyer [of] the multilateral trading system,” a “unilateralist and bullying hegemonist”, and a “double standards manipulator.” In stark contrast, the European Union, which is the main trans-Atlantic trading partner of the US, praised Washington for its “defining role in shaping the global trading system since the early days of the GATT (General Agreement on Tariffs and Trade)” and “in developing the rules that underpin international economic relations today.” The US-EU partnership has “become even more closer following the Russian aggression against Ukraine, which sees the EU and the US, along with many other WTO members, allied in our unwavering support to Ukraine,” it said. Yet, the EU, but in a somewhat subdued tone, also expressed sharp concerns about several trade policy initiatives undertaken by the US during the past two years. At the 15th TPR of the US on 14 December, China seems to have issued its strongest statement yet by tearing apart the credentials of the US in calling itself “multilateralist” and as a country that claims to be “leading by example.” The 15th TPR of the US will take place for a period of two days beginning on 14 December and ending on 16 December. During this period, the US is expected to provide an account of its trade policy initiatives, while members are likely to raise countless questions on every aspect of the US measures. On the first day of the US trade policy review, members will also make their preliminary statements on the WTO Secretariat’s report and the US statement. All the reports will be made public on the concluding day of the review for reporting on the proceedings. However, members who share their initial statements can be reported without delving into the WTO Secretariat’s report, according to the WTO rules. CHINA’S UNPRECEDENTED CRITICISM OF US TRADE POLICIES The Chinese statement at the US TPR, seen by the SUNS, said that US President Joe Biden maintained in his inaugural address to “lead by the power of our example.” Yet, the “US has failed to follow President Biden’s statement and has gone even further [in] the opposite direction since its last trade policy review” two years ago, China said. Beijing said that “for the past four years, we had been expecting the United States to lead by an example of safeguarding the core principles of the multilateral trading system.” It argued that “even when with the rhetoric of returning to multilateralism, what we saw was “America First” and measures running counter to the fundamental principles of the multilateral trading system.” Worse still, “while chanting for a level playing field, the United States has provided a large amount of discriminatory subsidies to its industries to gain predominance,” China noted in its statement. Further, “while urging other members to fulfill their transparency obligations, it has deliberately evaded the WTO agriculture box limit by way of “box shifting” and notification period splitting,” China alleged. China said despite repeated pronouncements by the US that it would “lead by example of promoting open trade and investment liberalization”, what was seen in reality is an “arbitrary protectionist together with unilateralism.” According to China, “over 90 anti-dumping measures initiated by the United States more than 20 years ago still persist.” “With the Buy American Act, the United States keeps foreign suppliers outside its government procurement market,” China argued. More disturbingly, China said that “the export control measures adopted by the United States deviate alarmingly further from the original tenet. What is worse, the US’s foreign investment national security review is getting more arbitrary and stringent, resting on no facts.” On the US claim of “leading by example” in implementing WTO dispute settlement rulings, China observed that “what we saw was a capricious rule-breaker.” By blocking the selection of Appellate Body (AB) Members, the US has refused to implement WTO dispute settlement rulings in quite a number of cases, China said. “On the other hand, it has appealed a dozen of cases to the AB, such as rulings on its high tariffs from the invocation of the WTO-inconsistent Section 301.” It pointed out that “just a couple of days ago, the United States once again strongly rejected the Panel’s rulings on its Section 232 measures.” Instead of “safeguarding the sustainability of the global supply chain,” China said, “what we saw was a United States distorting the market-based global supply chain through “decoupling”, “friend-shoring” and coercing key industry supply chains to move into the United States.” According to China, “the “long-arm jurisdiction” is repeatedly used to coerce other WTO members to abide by American domestic laws.” CHINA’S CONCLUSIONS China summed up its statement by making four major observations: “1. The United States puts “America First” by prevailing its domestic laws over international rules and laws of others, disregarding WTO rules and concerns of other members. Clearly, the United States is a “destroyer [of] the multilateral trading system”. 2. The United States has put its own interests above the global common interests, bullying other members to obey by leveraging its economic and technological power. Clearly, the United States is a “unilateralist and bullying hegemonist”. 3. The United States applies different standards to others and itself. While demanding other members to enhance disciplines and transparency, the United States itself is implementing large-scale exclusive and discriminatory industrial policies. Clearly, the United States is a “double standards manipulator”. 4. The United States is hanging onto the Cold War mentality of zero-sum game, abusing the concept of “national security” and disrupting the global supply chain by decoupling and disconnecting. Clearly, the United States is a “disturber of the global supply chain.” In the face of worsening global challenges such as “climate change and food insecurity,” China said, “the world needs a multilateral trading system that is non-discriminatory, open, inclusive and rule-based.” China urged the United States “to respect the WTO rules that were drafted under its own leadership, take actions to restore fully a well-functioning two-tier dispute settlement mechanism, preserve the authority of the multilateral trading system, and seriously and faithfully live up to its status as an example for all members.” Alleging that the US “has lost its direction”, China concluded that “it is time that Washington truly returns to the family of multilateralism at an early date.” THE EU’S CONCERNS In stark contrast to China’s hard-hitting statement at the US TPR, the EU said that “despite the shared objectives” with the US, Brussels continues to “have serious concerns about the impact of some US policies on trade: there continue to be strong inward-looking tendencies in US trade policy, favoring domestic sectoral interests.” “The EU, along with other WTO members are, for example, very concerned about the recent adoption of the Inflation Reduction Act (IRA),” the EU maintained. Although the EU welcomed the IRA in the fight against climate change, it said that Brussels has “serious concerns with some of its provisions.” According to the EU, “many of the generous subsidies provided for in the Act tilt the playing field in favor of the US producers in key technology sectors including, but not limited to, the automotive sector”. Also, certain elements of the IRA “such as those subsidies dependent on the use of domestic goods and domestic production are discriminatory and need to reconcile with the US’ WTO obligations,” the EU said. The IRA, according to the EU, “risks being detrimental to the economic interests and industrial competitiveness of the EU and other WTO members, and risk making the green transition more costly, for tax payers and consumers.” Also on the IRA, the EU pointedly asked the US as to how it will ensure “that the legislation is implemented or modified in a way to ensure it remains in compliance with its obligations under the WTO agreement, and advances the green transition without distorting the international level playing field for its trading partners?” Like China, the EU also asked about US government procurement, expressing concern “about the limitations introduced through the “Buy American” legislation”. Brussels argued that “by imposing local content requirements to US’ government procurement contracts, the “Buy American” rules close the US procurement to certain EU exports.” Like China, the EU also highlighted its concerns about the US agriculture measures, saying that “on agriculture support, there has been a steep increase in product-specific trade-distorting support since 2018/19 for key commodities (notably maize and soybeans) which has pushed the overall total US Agricultural Marketing Services (AMS) very quickly close to its AMS limits” of $19 billion. “Given the trade-distorting nature of this support and the negative effect on international markets,” the EU said it is looking for reassurances from the US that this trend is not going to continue. It appealed to the US “to conduct a trade policy and work together with its partners in the WTO, notably on the issue of WTO reform in the spirit of the WTO rules.” +
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