WTO Corner blog, WTO crisis and reform, WTO dispute settlement

WTO Corner: Ottawa Group, Supply Chain talk at Davos, China, Russian wood, LDC accession

There was much less of a void at or around the WTO this week. Here a round-up of developments around the world trade instirution this week. Today trade ministers are holding their annual Swiss-hosted informal WTO ministerial not, as usual, on the sidelines of Davos but online.

Ottawa Group compares notes on WTO issues, trade and health

Canada convened a ministerial meeting of members of the so-called Ottawa Group, which is pushing for procedural reforms at the organisation this week. This meeting was held ahead of the ritual annual informal WTO ministerial meeting which is usually held on the sidelines of the big Davos global leaders’ meeting.

In any case, Ottawa Group members “committed to continuing momentum towards achieving strong outcomes on trade and health, WTO reform, as well as on negotiations related to fisheries subsidies and agriculture,” the Canadian government stated after the meeting.

On health, “the group committed to working closely together to address trade barriers in essential medical goods, including export restrictions, customs clearance, transparency and sharing of best practices between public and private sectors.”

“The group agreed to intensify its engagement with other members to restore a fully functioning WTO dispute-settlement system,” we are also told.

Supply chains: Okonjo Iweala subsidy warning, calls for poor country inclusion

The supply chain challenge was one of the leading items for discussion at the meeting at the online Davos meeting, which the Commission used to announce the imminent launch of its European Chips Act. A panel discussion hosted by Klaus Schwab featuring the WTO’s Ngozi-Iweala, USTR Katherine Tai and three business CEOs was an opportunity to gauge the political temperature around this matter at multilateral level.

Using the most diplomatic of languages, the WTO’s DG warned of risks implied by US, European and other large rich countries’ move to subsidies industrial production on a grand scale, at least in some sectors.

“If we start getting governments that invest too much into industrial policy could be quite significant. I understand the phenomenon of trying to secure supply chains, it is a way of managing risk,” said Okonjo-Iweala.

“I would caution that we do not take this too far. Because getting too entangled in managing what industry to support where might have other implications for the (…) trading system with respect to the way trade works. I am a little worried,” she said.

The WTO leader also called on the big companies and decision-makers present to also give other poor countries a chance to take part in supply chains as these are being diversified.

“This is a chance for us (…) to integrate those countries and parts of the world and countries that have been left behind, not included in the benefits of globalisation,” said the WTO’s director-general.

“We’ve seen shifts to Vietnam, Laos, Cambodia, Bangladesh, Ethiopia etc in our data. I call it re-globalising and using this globalisation and supply chain to solve (…)  inequality problems (…) . I see this supply chain issue not only as a problem, I see it as an opportunity (…) to tackle lack of inclusion.”

While the United States was not mentioned by name anywhere in a very polite web conversation, for some reason Katherine Tai must have felt the pinch of criticism.

“I am sensitive to charges of nationalism, protectionism. I think it is more constructive for governments to engage with each other on the interests that we share which is in resilience in supply chains, confidence in globalisation in international trade and resist some of the urge in name-calling,” said the USTR.

China presses ahead with case against Australian steel product anti-dumping duties

In a clausewitzian trade-war-by-other-means move China has moved up a gear in a big case at the World Trade Organization against Australian anti-dumping duties on Chinese wind towers, stainless steel sinks and railway heels imposed in 2014, 2015 and 2019 respectively. Beijing will request the establishment of a panel at the next dispute settlement body meeting next Monday (25 January).

This comes just two months after the DSB agreed to establish a panel in the case brought by Australia against anti-dumping duties on wine. The latter are believed to be part of a general political backlash against Australia’s critical stances on Chinese policies.

EU sues Russia at WTO over wood export restrictions

The EU is filing yet another WTO case against Russia. This is about the country’s export restrictions on wood, which came into force this month. The European Commission’s notification says that these “Russian restrictions are highly detrimental to the EU wood processing industry, which relies on exports from Russia, and create significant uncertainty on the global wood market.”

“At the WTO, Russia committed to applying export duties at rates of maximum 13% or 15% for certain quantities of exports. By withdrawing these tariff-rate quotas, Russia now applies export duties at a much higher rate of 80%, and thereby does not respect its commitments under WTO law,” the EU announced to the press.

“Russia has reduced the number of border crossing points handling wood exports to the EU, from more than 30 to only one (Luttya, in Finland). By prohibiting the use of existing border crossing points that are technically capable of handling such exports, Russia is violating a WTO principle forbidding such restrictions,” the European Commission stated.

Least-developed country WTO accessions

The WTO hosted a three day stock-take of accessions of the world’s very poorest country to the global trade institution in a programme sponsored by China. More here.

The WTO tells us that eight of the 23 ongoing WTO accessions are LDCs: Bhutan, Comoros, Ethiopia, Sao Tomé and Principe, Somalia, South Sudan, Sudan and Timor-Leste.

“Despite the disruptions from the COVID-19 pandemic, some of these processes are making good progress. In fact, over the last 24 months, all but one of the active Working Parties on accessions have been for LDCs. One of the most advanced accessions today is an LDC, namely Comoros,” the secretariat writes.

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