External Affairs

WTO Losing Its Focus on Trade in Favour of Litigation, Claims US

Stating that the WTO was 'too easy' on wealthier developing countries such as China, the US trade chief, criticised the organisations's protectionism and advocated for a stronger multilateral system.

US Trade Representative Robert Lighthizer attends the 11th WTO's ministerial conference in Buenos Aires, Argentina December 11, 2017. Credit: Reuters/Marcos Brindicci

US Trade Representative Robert Lighthizer attends the 11th WTO’s ministerial conference in Buenos Aires, Argentina December 11, 2017. Credit: Reuters/Marcos Brindicci

Buenos Aires:  US President Donald Trump’s trade chief said on Monday that the WTO is losing its focus on trade negotiations in favour of litigation, and was going too easy on wealthier developing countries such as China.

With Trump’s “America First” trade agenda casting a cloud over the WTO‘s 11th ministerial meeting in Buenos Aires, representatives of other major members criticised protectionism and advocated a stronger multilateral trading system, while acknowledging the WTO‘s shortcomings.

US Trade Representative Robert Lighthizer, who has said he does not want major agreements out of the meeting, voiced concern that the WTO was becoming a litigation-centered organisation.

Too often members seem to believe they can gain concessions through lawsuits that they could never get at the negotiating table,” he said. “We have to ask ourselves whether this is good for the institution and whether the current litigation structure makes sense.”

Too many countries were not following WTO rules, he complained, and too many wealthier members had been given unfair exemptions as developing countries.

“We need to clarify our understanding of development within the WTO. We cannot sustain a situation in which new rules can only apply to a few and that others will be given a pass in the name of self-proclaimed development status,” Lighthizer told the conference’s opening session.

He said five of the six richest countries claim developing country status at the WTO, without providing evidence to back up the assertion. A Lighthizer spokeswoman later said he was referring to the six countries with the highest gross domestic product per capita, according to IMF measurements.

Five, including Qatar and Singapore, claim developing status, which provides longer times to implement WTO agreements and more opportunities to boost trade.

Ahead of the meeting, the US blocked efforts to draft a joint statement emphasizing the “centrality” of the global trade system and the need to aid development. Its opposition has raised concerns that the WTO will not be able to accomplish even modest goals, such as addressing fishing and agricultural subsidies, at the conference.

“We need to have a clear objective in mind,” European Trade Commissioner Cecilia Malmstrom said. “For the EU, this is clear: to preserve and to strengthen the rules-based multilateral trading system.”

Swipes at China

Trump has indicated his preference for bilateral deals over the multilateral system embodied by the WTO. The US has vetoed new judges for trade disputes, pushing the organisation into a crisis.

Several countries’ delegates criticized that delay on Monday, without mentioning the US. South Korean Trade Minister Kim Hyun-chong, whose resignation as a WTO appellate judge this year created one of the openings, said members should “promptly fill all the vacancies.”

“We need to collectively and expeditiously resolve this impasse,” Indian Commerce Minister Suresh Prabhu told the conference.

Lighthizer said it was impossible to negotiate new rules when many of the current ones were not being followed, and added that too many members viewed exemptions from WTO rules as a path to faster growth.

In a thinly veiled swipe at China’s trade practices, Lighthizer said the US was leading negotiations to “correct the sad performance of many members in notification and transparency.”

Japan’s Trade and Economy Minister Hiroshige Seko said Japan would support efforts to boost reporting standards.

The US is backing the EU in its resistance to recognizing China as a market economy, arguing the government unfairly intervenes in the economy. The case is before the WTO and a victory for Beijing could dramatically lower tariffs on imports of Chinese goods.

Chinese Commerce Minister Zhong Shan said on Monday that while trade protection was rising, no country would be able to succeed in isolation and that WTO rules were critical to protecting globalisation.

“Let us join hands and take real action to uphold the authority and efficacy of the WTO,” Zhong said.


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