|
||
|
TWN
Info Service on WTO and Trade Issues (Oct25/08) Geneva, 8 Oct (D. Ravi Kanth) — The United States appears to have rejected China’s submission on “Heightened Trade Turbulence and Responses from the WTO” during the World Trade Organization’s General Council (GC) meeting on 7 October. However, China’s submission, which attributes growing trade instability to the continued expansion of “unilateral tariff measures” and uncertainty in the global trade policy environment, was supported by several other WTO members, said people familiar with the development. China warned that “foreshadowed by unilateral tariffs, “power-based” trade relations are gradually upending the rules-based multilateral trading system [MTS],” citing recent bilateral trade deals as evidence. On the second day of the two-day GC meeting on 7 October, the US reportedly raised sharp concerns over China’s positions, including Beijing’s decision to forgo special and differential treatment (S&DT) in current and future trade negotiations. The US also characterized the WTO Director-General’s oft-cited claim – that 72% of global trade operates under the most-favoured-nation (MFN) framework – as “myopic”. The DG, Ms. Ngozi Okonjo-Iweala, immediately countered this assertion, according to sources familiar with the development. CHINA’S SUBMISSIONS China’s new trade envoy, Ambassador Li Yongjie, presented two submissions during her first GC meeting: one titled, “Heightened Trade Turbulence and Responses from the WTO”, and another titled, “China’s Position Paper Regarding Special and Differential Treatment in the WTO.” Regarding heightened trade turbulence, Ambassador Li noted that this was the fourth time that China had tabled the paper, due to persistent “global economic and trade turbulence.” She told members that “since July, the scope of unilateral tariff measures continues to expand, and uncertainty in the global trade policy environment keeps rising.” Citing the WTO’s July Trade Monitoring Report – which found that “nearly one-fifth of global merchandise imports are now subject to increased tariffs; trade-restrictive measures have more than tripled compared to 2024 and reached their highest level since the monitoring mechanism was established” – Ambassador Li observed that “some Members have been coerced into making unilateral trade concessions, affecting the legitimate rights and interests of third parties.” Without explicitly naming the United States – which has imposed unilateral reciprocal tariffs, sectoral tariffs under Section 232 national security provisions, and non-trade-related tariffs – Ambassador Li warned that such actions “may even trigger a domino effect, further fragmenting the multilateral trading system.” She expressed agreement with the DG’s repeated assertion that “the multilateral trading system has shown its resilience.” She emphasized: “For the WTO to respond to increased turbulence, we hope the discussions under this agenda could help members better reflect on and explore ways to preserve the rules-based multilateral trading system.” In a rather ironic twist, when the GC chair, Ambassador Saqer Abdullah AlMoqbel of Saudi Arabia, suggested limiting media access due to leaks from WTO meetings, China called for greater “transparency,” according to participants. China also urged support for “objective third-party monitoring and analysis” by institutions such as the Geneva- based International Trade Centre (ITC), the United Nations Conference on Trade and Development (UNCTAD), the Paris-based Organization for Economic Co-operation and Development (OECD), the International Monetary Fund (IMF), the World Bank, and others. These organizations, China noted, have published reports analyzing today’s turbulent trade landscape and highlighting the risks of unchecked trade tensions. Ambassador Li encouraged the WTO Secretariat to “continue compiling and sharing relevant research findings with Members.” Recently, at a meeting of the Committee on Agriculture, China raised questions about information-sharing concerning bilateral trade agreements between the US and Japan, the US and Indonesia, the US and the European Union, and the US and Vietnam. According to the replies from these countries, none of them shared details of tariff concessions, as reported in the WTO’s Trade Policy Review database. Against this backdrop, Ambassador Li stated: “We encourage relevant Members, especially major economies, to share information with WTO members on their bilateral trade agreements, particularly regarding WTO-related provisions.” China called on all members to “reaffirm, in every possible way, their commitment to the rules-based multilateral trading system.” Ambassador Li noted that since the beginning of the year, various forums – including the “Friends of the System”, the ASEAN Economic Ministers’ Meeting, the BRICS Trade Ministers’ Meeting, and the Shanghai Cooperation Organization Council of Heads of State – have issued statements supporting the multilateral trading system. “More importantly,” she said, “members must take real and tangible actions to enable the WTO to deliver tangible results.” US RESPONSE While many members agreed with China’s call to uphold the WTO rules and support the multilateral trading system, the US countered: “We should all look at the Marrakesh Agreement and its preamble.” According to participants, the US said that some members are seeking to preserve a system that “never was what it was supposed to be,” arguing that the preamble envisions a “fair, market-oriented system.” The US reportedly criticized China for not fulfilling its Accession Protocol commitments “to be a market- oriented economy,” instead adhering to a “state-led model.” A US representative expressed surprise that members are advocating to preserve a system that, in the US view, has never functioned as originally intended under the Marrakesh Agreement. S&DT POSITION PAPER China’s S&DT position paper – first announced at the United Nations General Assembly last month – elicited two broad types of responses. Several industrialized countries welcomed China’s decision not to seek S&DT in current and future trade negotiations, while maintaining its formal status as a developing country. These countries described the move as “worth ameliorating” and stressed that S&DT should be “aligned to the actual needs of developing countries.” The Gambia, speaking on behalf of the least-developed countries (LDCs), praised China’s commitment to provide tariff- and quota-free access for LDC products. Meanwhile, Brazil and Jamaica said China’s announcement reaffirmed the sovereign right of developing nations to choose whether or not to avail themselves of S&DT, implying that the provision is self-designated. Over 50 countries took the floor to comment on China’s decision not to avail of S&DT. Notably, India did not make any statement on the matter, according to sources. Among the industrialized nations, Japan and the US made some critical remarks, with Japan reportedly stating that it was “unexpected” for a country like China – which it described as “the most developed and advanced developing country, almost a developed country” – to claim S&DT. Japan echoed calls for China not to invoke S&DT based on its past accession commitments. In response, Beijing clarified that its decision to forgo S&DT in future negotiations was made “in the interest of development and in the interest of other developing countries.” China also categorically reaffirmed its status as a developing country and emphasized its role as “a voice for developing countries and the Global South.” However, the US characterized China’s announcement on S&DT as being “very confusing,” saying that its implications were unclear. Washington recalled that it had submitted a detailed statement on the matter and asserted that China’s move at least confirms that its past use of S&DT “has not been justifiable,” according to participants. MFN DATA DISPUTE Following earlier questions from Brazil and Uruguay about the credibility of the claim that 72% of global trade operates on an MFN basis, the US on 7 October systematically challenged both the data and what it called the “myopic” interpretation of MFN trade figures. The US argued that the statistic ignores other fundamental WTO provisions. In a sharp rebuttal, the DG reportedly said: “Nobody raised objections when the figure was 80%. Now that it’s 72%, many questions are being asked – even though the methodology hasn’t changed.” Ms. Okonjo-Iweala emphasized that the WTO Secretariat remains open to explaining its methodology and strongly urged members “not to impose any restraints on the Secretariat’s analytical work,” which is conducted at members’ request. She noted that China, in its intervention, had expressed appreciation for the Secretariat’s analysis of current trade policies and their global impact. In response, the US contended that China’s request for continued information-sharing amounts to an attempt to make “soft decisions” under agenda items intended solely for transparency. The US warned that this could set a precedent for informal decision-making. When the US labelled the Secretariat’s analysis as “myopic,” the DG appealed directly: “Please do not restrain, do not put any limitation on the Secretariat’s analytical work,” according to several participants who asked not to be quoted. +
|
||
