Anyone who had hoped that the change of power in the White House would bring a quick end to the crisis within the World Trade Organization (WTO) has been officially disappointed since this week. US President Joe Biden is currently holding on to his predecessor Donald Trump’s blockade of the WTO arbitration mechanism, as it turned out at WTO talks on Monday. For example, a crucial function of the WTO – that of arbitrator in trade disputes – remains largely paralyzed.
In a statement, the US representative to the WTO in Geneva said he was “not in a position” to agree to the appointment of new members of the Appellate Body, the highest body at the WTO in trade disputes. With this, Biden continues Trump’s line. Since Trump blocked appointments of these WTO “ judges ” in late 2019, the Appellate Body has been inoperative.
WTO member states can appeal to the Appellate Body when a panel of experts at the WTO has ruled on a dispute, for example in one of the many disputes between the EU and the US about the aircraft industry. Only when the appeal procedure has been completed will the decision be binding. Now this is no longer possible, causing the system to crash. Not only are ten appeals unresolved, including one from the EU against the US in a case over subsidies to aircraft manufacturer Airbus. Member States also continue to appeal panel rulings, purely to prevent WTO rulings from becoming binding. The US itself, cynically enough, has already done this three times. The EU has also done this once, in a case brought by Russia about anti-dumping (measures against the export of products below cost price).
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The US delegation to the WTO stated in its statement that the US has “systemic objections” to the WTO Appellate Body. These objections are said to have existed for “more than sixteen years” and have applied to several US governments. Indeed, American politicians, Republicans and Democrats alike, have for years considered the Appellate Body to act too much as an international court restricting the US’s ability to protect itself from unfair foreign competition. Specifically, it is mainly about China. On several occasions, the WTO has ruled against the US on anti-dumping duties on Chinese products.
Earlier this month, there seemed to be some hope for the WTO. The Biden government agreed to appoint a new WTO Director General, Nigerian Ngozi Okonjo-Iweala. Trump had blocked this nomination, which was supported by all other 163 WTO countries. But this week’s US stance shows that the Trump era on trade policy is not over yet.
The massive import tariffs that Trump imposed on most Chinese products and on European steel and aluminum also remain in effect under Biden so far. Worryingly from the WTO, the Biden government on Monday referred to ‘national security’ in a dispute with China over products from Hong Kong, which the US labels’made in China‘ have given. Since US national security would be at stake, the WTO would have no say in this. This is precisely the argument Trump used over and over again to bypass the WTO.
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Like Trump, Biden is also blocking appointment to the WTO
Source link Like Trump, Biden is also blocking appointment to the WTO