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TWN
Info Service on WTO and Trade Issues (Aug26/06) WTO:
US trade policy review set for December amid key reform debates Geneva, 4 Aug (D. Ravi Kanth) -- The United States' 16th trade policy review is scheduled to take place at the World Trade Organization on 16-18 December 2026, against a backdrop of significant developments - including allegations from several people familiar with the matter that Washington's actions are not in compliance with WTO rules, with what some describe as flagrant violations stemming from the continued "America First" trade policies. As per the WTO's customary schedule, major industrialized economies undergo a trade policy review every two years. By that practice, the United States' 16th review should have taken place in 2024. However, according to the WTO's schedule of trade policy reviews, the meeting was not held then - possibly due to the transition in administration following the national elections in Washington. Ahead of the December meeting of the Trade Policy Review Body (TPRB), the US Trade Representative (USTR) earlier this year circulated a document, titled "The President's 2026 Trade Policy Agenda - The America First Trade Policy [and] A Trade Policy That Puts America First." That document offered some indications of Washington's possible course at the WTO, which is mentioned four times. For example, it states: "In May, USTR will commence the statutorily required Four-Year Review of the Section 301 responsive action on forced technology transfer." "In July," the US stated, "USTR will also consider whether to take action in the Section 301 investigation involving the enforcement of US rights in the World Trade Organization (WTO) disputes involving large civil aircraft." With respect to China, the report said that the US aims to "manage Trade with China for Reciprocity and Balance," arguing that "there is now no doubt about the costs of more than two decades of unfettered free trade with China." Yet, people familiar with the matter noted that the Trump administration concluded a bilateral trade agreement with China some time ago, which reduced the overall scale of friction between the two sides. Nonetheless, the USTR painted a critical picture of China, suggesting that the US "lost millions of jobs as the result of unfair competition after China acceded to the WTO in 2001." Washington has reportedly criticized Beijing on grounds that China "has been the largest driver of the United States' trade deficit for over 20 years, and many critical supply chains have been weakened as a result of China's non-market policies and practices." At the WTO, the US said that it "will continue its day-to-day work to reduce barriers to US trade and will pursue realistic and practical outcomes of benefit to all trading nations." The reality, however, has been a "one-way street" of US unilateral tariffs that are allegedly inconsistent with the core provisions of the Marrakesh Agreement that established the WTO in 1995. The US said ahead of the WTO's 14th Ministerial Conference (MC14) that it will be "clear-eyed about the limited opportunities for outcomes and reform, but will continue to seek realistic outcomes including permanent extension of the moratorium on customs duties on electronic transmissions." It is well established, however, that the US single-handedly blocked the meeting from taking any decisions, including on reforms on which there was no consensus at MC14 in Yaounde, Cameroon, said several trade envoys who asked not to be quoted. BEYOND MC14 At MC14 and beyond, the US explicitly stated that it will "encourage a reorientation of the WTO's atrophied negotiating function by favoring meaningful plurilateral agreements and urging reassessment of the MFN." The US also stated that it is "pleased and encouraged that other countries already have begun to share US views on these issues and recognize the importance of balance and reciprocity." At the conclusion of the US' previous trade policy review in December 2022, the then chair of the Trade Policy Review Body, Ambassador Villalobos Rodriguez of Mexico, observed that "developments in US trade and related policies have been significant during the review period and this examination has been timely given the continued economic recovery from the COVID-19 pandemic and the current geopolitical situation that continues to impose challenges." Crucially, "the majority of Members noted that the impasse with respect to the Appellate Body was jeopardizing the judicial function of the WTO and they were hopeful that the United States would lead the reform efforts so that a fully functional dispute settlement system would be operational by 2024," Ambassador Rodriguez emphasized in December 2022. However, the recent US positions during the discussions on dispute settlement system reform have seemingly exposed its opposition to treating these negotiations on par with the WTO reform talks. Its stated principles - changing the negotiating function, pursuing plurilateral agreements without adhering to the WTO rules, and undermining the principle of special and differential treatment (S&DT) - have been strongly opposed by a majority of countries during last month's reform discussions, said several trade envoys who asked not to be quoted. Significantly, the US positions appear to be shared by the major industrialized countries, who seem determined to bring about a "regime change" in the WTO rules, according to several trade envoys who preferred not to be identified. MIDTERM ELECTIONS It remains to be seen whether the upcoming trade policy review of the US will see any shift in the US position, possibly due to changes resulting from the upcoming US midterm elections. Many countries, apart from the reform proponents, appear frustrated with current US policies. Yet, they seem helpless against the continued "predatory" trade policies of the world's largest trading nation, said trade envoys who asked not to be quoted. By then, a new UN Secretary-General will have been chosen, amid growing fears that Ms. Rebeca Grynspan of Costa Rica could win and "re-brand" the UN into a "UN Corporation," as she allegedly did with UNCTAD, trade envoys cautioned. "It could be a big happening, with everyone bombarding the US with questions about whether they are still an abiding member of the system they helped to create in 1995," said another trade envoy, who preferred not to be quoted. Many questions remain, such as: "How does the US intend to conform and comply - or should everyone else also deviate and do as they please?"; "When will they be ready to finally address the DS [dispute settlement] dysfunctionality?"; "When will they notify the deals they have made?"; and "How will they compensate members for the harm done?" Given current trends of countries buckling under US pressure, said a trade envoy, one might foresee a situation "where all become lackeys and accomplices and decide to see, hear and say nothing, but niceties, to the overlord." +
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