Latest news with #AppellateBody
NDTV
5 days ago
- Business
- NDTV
Trade Deals vs WTO: Is Trump Hastening The World Trade Organization's Demise?
The World Trade Organization (WTO) is a key institution of global governance that was founded in 1995 as a successor to the General Agreements on Tariffs and Trade (GATT), established in the wake of World War II. The period just before the Second World War was an era of protectionism that saw high tariffs imposed by the US, and the GATT was signed by 23 countries in 1947 to tackle the tariff barriers and facilitate international trade. The current Trump tariffs may not be mimicking the pre-WWII period, but they are certainly reminiscent of that. The world has witnessed the impact of the Smoot-Hawley Tariff Act of the 1930s. So, the question that arises is, why would US President Donald Trump tread a similar path a century later? There is a growing viewpoint that the Trump administration is using tariffs as a negotiating tool to pressure countries to strike bilateral trade deals with the United States. While sovereign nations are free to decide what works in their interest, America's stress on bilateral deals is a more nuanced move. At the heart of this move is a strategic shift that risks rendering the World Trade Organization irrelevant. This is because one of the basic principles of the WTO is non-discrimination - Most Favoured Nation (MFN) and National Treatment (NT). That means member countries need to extend similar concessions to all members in the WTO. So, if President Trump strikes trade deals with a few countries and drops the tariffs for them, for example, on steel and aluminum, while continuing with high tariffs for some other countries, it would be flouting the WTO principle. In essence, any preferential treatment emerging from the deals would undermine the MFN concept - even though the cover that the US could use is one of the two exceptions under MFN - that Free Trade Agreements are valid if they are comprehensive. Political scientists like Timothy Sinclair, Margaret Karns, and Karen Mingst stress that the power of a high-profile subset of key intergovernmental organizations - like WTO - rests on mutual benefits from conformity to the system. The US is clearly deviating from conforming to a system of which it was at the forefront of building. At this moment, it appears that President Trump is the executioner-in-chief of this strategy of deviation; however, one of the first steps towards weakening the WTO was taken during the Obama administration and later followed up by the first Trump administration. The Dispute Settlement System (DSS), a vital organ of the trading system, is being virtually strangled due to a lack of quorum in its Appellate Body (AB). Through three US administrations, starting with President Barack Obama's, Washington has accused the WTO's Appellate Body of overstepping its boundaries, making new trade rules in its decisions that were not negotiated by the WTO's 166 member economies. In 2016, the US blocked the reappointment of a South Korean judge to the Appellate Body. In 2018, the Trump administration blocked the reappointment of two other judges, rendering the Appellate Body non-functional. Conservative US think tanks have alleged bias by judges in the Appellate Body, demanding that the US completely withdraw from the WTO. A write-up in the Heritage Foundation by Andrew Hale in March 2024 said that judges had repeatedly shown bias against the US and in favour of their home countries. 'These biased judges have ruled against the US at least partially in 90% of cases, and the US became the most sued-against country at the WTO, despite the fact that we arguably have the freest trade system in the world.' This is not just the Conservative viewpoint, it seems to have bipartisan support despite not being entirely rooted in reality. Late last year, the then-outgoing American ambassador to the WTO, Maria Pagan, had warned that if the world wanted the US to be part of the international rules-based trading system, then it should 'take us seriously". The United States, which had emerged as the strongest economy after World War II, was the driving force in the international trade regime back in the day. 'Nothing of consequence was achieved without US leadership. Today, this is no longer the case,' said Keith M. Rockwell in Postcard From A Disintegration: Inside the WTO's Fraying Seams. The US is now the world's second-largest trading nation, pushed behind China. Rockwell believes that the Cold War mentality gripping Washington stems from its anxiety over China. The US believes 'China has somehow rigged the multilateral trading system, shirked its responsibilities, and gamed the dispute settlement function". Hence, it appears that the US stand on the Appellate Body is either to destabilise the WTO leading to its demise or to use it as a lever to negotiate on its terms on contentious issues like self-designation of developing countries, agricultural subsidies and Trade Related Intellectual Property Rights Agreement (TRIPS) - all of which have seen a pushback from the Global South in the past. In an article titled The Global South in the WTO: Time to Go on the Offensive, published by Foreign Policy in Focus, Walden Bello says that as resistance by developing countries under the leadership of India, Brazil, and China to attempted restrictive moves of the US in the WTO grew, 'the United States began to move away from a strategy of multilateral trade liberalization via the WTO". In fact, Professor and Canada Research Chair in Global Policy, Kristen Hopewell, wrote in 2023 that China and India formed a surprising alliance at the WTO that has been highly successful in bringing an end to American dominance and sharply curtailing the ability of the US to set the rules of global trade, which has resulted in a 'vertical forum shifting' by the dominant power; it is now at the brink of abandoning the WTO and pursuing bilateral trade more actively. This is underway with President Trump's multiple trade deal dialogues currently - from India to Canada and Indonesia. The US has trade relations with more than 200 countries, territories, and regional associations around the globe. With over $7.0 trillion in exports and imports of goods and services in 2022, per the Office of the US Trade Representative, the significance of the US participation in a rules-based trading system cannot be overstated. But with nations being compelled to seal bilateral deals with the US in a hurry, they may end up collectively helping the US write the WTO's epitaph.
Reuters
21-07-2025
- Business
- Reuters
WTO reverses parts of previous decision in EU-China intellectual property dispute
July 21 (Reuters) - World Trade Organization arbitrators on Monday reversed part of a previous panel decision that had rejected the European Union's claims that China had violated the global watchdog's rules on intellectual property. In April, a WTO panel rejected the EU's complaint, lodged in 2022, that China had violated the global watchdog's IP rules over patents for 3G, 4G and 5G mobile technology. However, it did say that China had failed to comply with all WTO transparency obligations. The EU appealed the case at the Multi-Party Appeal Arbitration Arrangement - a surrogate for the WTO's Appellate Body which was shuttered in 2019 after the United States repeatedly blocked judge appointments. On Monday, the arbitrators reversed part of the previous panel decision and found that the Chinese courts' prohibition of patent holders to enforce their patent rights in countries outside of China, through the use of anti-suit injunctions, was not consistent with Trade-Related Aspects of Intellectual Property Rights rules concerning patent rights. The arbitrators upheld the previous findings on four issues but reversed the Panel's findings on three issues. It has given China 90 days to remedy its measures to comply with WTO rules.
Yahoo
01-04-2025
- Business
- Yahoo
Buffeted by Trump, WTO hunkers down to plot future
By Emma Farge and Olivia Le Poidevin GENEVA(Reuters) - From its sleek headquarters on the shores of Lake Geneva, the World Trade Organization hopes to quietly ride out the after-shocks of Trump administration tariffs whose protectionist intent runs in the face of its free-trade mandate. For three decades the WTO has worked to maintain a rules-based and obstacle-free trading system as a motor of the global economy. It says the 5.8% average annual increase in trade it has overseen has created jobs and raised living standards. But now the U.S. determination to double down on tariffs risks sidelining the organisation and its ability to regulate trade, enforce rules and negotiate new ones. In a direct blow to the body, Washington has already decided to pause its funding. Reuters spoke to WTO Director-General Ngozi Okonjo-Iweala and a dozen serving or former officials and delegates to the WTO, who depicted an organisation worried about what the future holds under Trump, but set on continuing its work in the hope that more orderly times eventually return. "(Members) are saying to me: 'Yes we are concerned, but at the same time we're using the system, and we want to continue using it'," Okonjo-Iweala said. "I'm telling you that the bedrock of trade is here and it's not going anywhere. This is what guarantees stability, predictability, trust, any word you want to use, and members know it – including the U.S.," she said, citing agreements that govern patents, food safety and the value of goods for customs. Okonjo-Iweala said the WTO administers just over 75% of global trade, down from around 80% due to recent tariffs, and continues to attract new membership applications. The current alarm follows years of paralysis in the WTO's top dispute settlement arm, the Appellate Body, due to the U.S. blocking new judge appointments during Trump's first term, which was not remedied under former President Joe Biden. CONTINUING TO COPE For now, there is no obvious sign of upheaval at the WTO's headquarters, whose modern facilities stand in contrast to more run-down U.N. institutions nearby. Black Mercedes saloons with diplomatic licence plates linger outside and besuited delegates huddle in small groups in its sunlit atrium. The spacious offices once occupied by judges of its Appellate Body have been taken over by other staff. Trump officials view the WTO as a body that has enabled China to get an unfair export advantage via massive subsidies without making the country open up to foreign businesses - a criticism the WTO rejects. One WTO staffer said people were "nervous" about its future but not currently fearful for their jobs. Asked about possible cuts, Okonjo-Iweala said: "We are making our plans on how to continue to cope. I'm not the type who will let my staff find out from the newspaper what I'm planning." Indeed, those staff providing support to the first tier of the WTO dispute system - which remains functional but cannot act on appeals - have seen their workload go up since Trump's return, with five disputes filed since January. "The press depicts a picture that the whole WTO system is falling apart, which, in fact, it is not", said Thomas Cottier, an arbitrator at the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), a surrogate for the WTO appeals court. The WTO was set up in 1995 as a successor to the General Agreement on Tariffs and Trade (GATT) to create a better framework for the exchange of goods. Now worth over $30 trillion, global trade grew briskly following the collapse of the Soviet Union and China's entry into the WTO in 2001. As a proportion of global GDP, trade leapt from 38% in 1989 to 61% in 2008 when the global financial crisis bit, World Bank data show. Since then it has seesawed. Still, when Okonjo-Iweala in February suggested an event to mark the WTO's 30th anniversary, the U.S. delegate raised budgetary concerns and urged her to make it an occasion for "careful reflection", a meeting transcript showed. Okonjo-Iweala took note and pared back the event, she said. The April 10 event will be members-only and the costs of a reception will be borne by Switzerland. WTO delegates are cautious about prospects for new global agreements to reduce trade barriers in the current environment, with all 166 members having to agree by consensus. One silver lining is that a 2022 deal to curb fishing subsidies could soon take effect, with just 17 more ratifications needed. WTO staff comfort themselves that the Trump administration, which quickly announced its plan to quit the World Health Organization, has not so far said it will leave the trade body. Looking further into the future, others say the fate of the WTO and the free trade it defends is ultimately down to its members, in particular open economies such as Europe's. "It can survive this if the non-U.S. WTO members agree to remain committed to the obligations they've made, and decide they can run the system without the U.S.," Pascal Lamy, who was director-general of the WTO from 2005 to 2013, told Reuters. (Additional reporting by Dave Graham; Editing by Sharon Singleton and Mark John)
Reuters
01-04-2025
- Business
- Reuters
Buffeted by Trump, WTO hunkers down to plot future
GENEVA, April 1(Reuters) - From its sleek headquarters on the shores of Lake Geneva, the World Trade Organization hopes to quietly ride out the after-shocks of Trump administration tariffs whose protectionist intent runs in the face of its free-trade mandate. For three decades the WTO has worked to maintain a rules-based and obstacle-free trading system as a motor of the global economy. It says the 5.8% average annual increase in trade it has overseen has created jobs and raised living standards. But now the U.S. determination to double down on tariffs risks sidelining the organisation and its ability to regulate trade, enforce rules and negotiate new ones. In a direct blow to the body, Washington has already decided to pause its funding. Reuters spoke to WTO Director-General Ngozi Okonjo-Iweala and a dozen serving or former officials and delegates to the WTO, who depicted an organisation worried about what the future holds under Trump, but set on continuing its work in the hope that more orderly times eventually return. "(Members) are saying to me: 'Yes we are concerned, but at the same time we're using the system, and we want to continue using it'," Okonjo-Iweala said. "I'm telling you that the bedrock of trade is here and it's not going anywhere. This is what guarantees stability, predictability, trust, any word you want to use, and members know it – including the U.S.," she said, citing agreements that govern patents, food safety and the value of goods for customs. Okonjo-Iweala said the WTO administers just over 75% of global trade, down from around 80% due to recent tariffs, and continues to attract new membership applications. The current alarm follows years of paralysis in the WTO's top dispute settlement arm, the Appellate Body, due to the U.S. blocking new judge appointments during Trump's first term, which was not remedied under former President Joe Biden. CONTINUING TO COPE For now, there is no obvious sign of upheaval at the WTO's headquarters, whose modern facilities stand in contrast to more run-down U.N. institutions nearby. Black Mercedes saloons with diplomatic licence plates linger outside and besuited delegates huddle in small groups in its sunlit atrium. The spacious offices once occupied by judges of its Appellate Body have been taken over by other staff. Trump officials view the WTO as a body that has enabled China to get an unfair export advantage via massive subsidies without making the country open up to foreign businesses - a criticism the WTO rejects. One WTO staffer said people were "nervous" about its future but not currently fearful for their jobs. Asked about possible cuts, Okonjo-Iweala said: "We are making our plans on how to continue to cope. I'm not the type who will let my staff find out from the newspaper what I'm planning." Indeed, those staff providing support to the first tier of the WTO dispute system - which remains functional but cannot act on appeals - have seen their workload go up since Trump's return, with five disputes filed since January. "The press depicts a picture that the whole WTO system is falling apart, which, in fact, it is not", said Thomas Cottier, an arbitrator at the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), a surrogate for the WTO appeals court. The WTO was set up in 1995 as a successor to the General Agreement on Tariffs and Trade (GATT) to create a better framework for the exchange of goods. Now worth over $30 trillion, global trade grew briskly following the collapse of the Soviet Union and China's entry into the WTO in 2001. As a proportion of global GDP, trade leapt from 38% in 1989 to 61% in 2008 when the global financial crisis bit, World Bank data show. Since then it has seesawed. Still, when Okonjo-Iweala in February suggested an event to mark the WTO's 30th anniversary, the U.S. delegate raised budgetary concerns and urged her to make it an occasion for "careful reflection", a meeting transcript showed. Okonjo-Iweala took note and pared back the event, she said. The April 10 event will be members-only and the costs of a reception will be borne by Switzerland. WTO delegates are cautious about prospects for new global agreements to reduce trade barriers in the current environment, with all 166 members having to agree by consensus. One silver lining is that a 2022 deal to curb fishing subsidies could soon take effect, with just 17 more ratifications needed. WTO staff comfort themselves that the Trump administration, which quickly announced its plan to quit the World Health Organization, has not so far said it will leave the trade body. Looking further into the future, others say the fate of the WTO and the free trade it defends is ultimately down to its members, in particular open economies such as Europe's. "It can survive this if the non-U.S. WTO members agree to remain committed to the obligations they've made, and decide they can run the system without the U.S.," Pascal Lamy, who was director-general of the WTO from 2005 to 2013, told Reuters.
Voice of America
06-02-2025
- Business
- Voice of America
White House monitoring China's complaint on Trump tariffs at WTO
The White House on Thursday said it was monitoring a complaint by China to the World Trade Organization that accuses the United States of making 'unfounded and false allegations' about China's role in the fentanyl trade to justify tariffs on Chinese products. The complaint was made Wednesday, a day after President Donald Trump raised tariffs on Chinese goods by 10%. The White House said the new duties on Chinese goods were aimed at halting the flow of fentanyl opioids and their precursor chemicals. China said it was imposing retaliatory tariffs on some American goods beginning February 10, including 15% duties on coal and natural gas imports and 10% on petroleum, agricultural equipment, high-emission vehicles and pickup trucks. The country also immediately implemented restrictions on the export of certain critical minerals and launched an antitrust investigation into American tech giant Google. In the WTO filing, China said the U.S. tariff measures were "discriminatory and protectionist" and violated international trade rules. Beijing has requested a consultation with Washington. China's request will kick-start a process within the WTO's Appellate Body, which has the final say on dispute settlements. A White House official told VOA the administration was monitoring Beijing's file but did not provide further details. Analysts say Beijing's move is largely performative and unlikely to yield much relief. The Appellate Body has been largely paralyzed following the first Trump administration's 2019 move to block appointments of appellate judges over what it viewed as judicial overreach. The Biden administration continued the policy. China recognizes the WTO is not going to put a lot of pressure on the United States because Washington is fully capable of blocking any legal process there, said Jeffrey Schott, senior fellow at the Peterson Institute for International Economics. 'So instead, I think the Chinese reaction has been moderate in indicating that they will act tit for tat against U.S. trade,' he told VOA. Schott added that there's 'a desire to keep things cool' and moderate the damage, just as what happened during the first Trump administration when a trade deal was agreed upon after initial retaliatory trade actions. On the U.S. side, the 10% tariffs against China are much lower than the up to 60% that Trump promised during his presidential campaign, he said. Trump-Xi call Trump imposed import duties on Beijing after delaying his actions to impose 25% tariffs on Mexico and Canada following conversations Monday with their leaders. Tariff critics are hoping that a conversation between Trump and Chinese President Xi Jinping could lead to similar results. White House press secretary Karoline Leavitt said Tuesday that the call 'is being scheduled and will happen very soon.' However, Trump has dismissed the negative impact of China's tariffs and said he was 'in no rush' to speak with Xi. 'We'll speak to him at the appropriate time,' Trump told reporters at the White House on Tuesday. Unlike Trump's deal with Mexico and Canada, an agreement with Beijing is unlikely to come quickly, considering strong bipartisan support for placing tariffs on China because of concern about the influx of illegal drugs and other national security concerns, said Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security. 'Even if they come up with some kind of agreement to settle this particular tariff or to remove the countertariffs, there will probably be more tariffs on China later in this administration,' she told VOA. The U.S. Postal Service on Tuesday announced that it was suspending acceptance of inbound packages from China and Hong Kong, closing a loophole that Chinese garment and other consumer goods companies have used in the past. These companies, including Shein and Temu as well as Amazon vendors, bypassed existing U.S. tariffs by shipping to American customers directly from China. On Wednesday, USPS reversed its decision, saying it would work with Customs and Border Protection on a way to collect the new tariffs. The Postal Service 'will continue accepting all international inbound mail and packages from China and Hong Kong Posts,' it said. 'The USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery.' It is unclear how the fee will be collected in such direct transactions between Chinese sellers and American buyers. Trump's trade actions on China, Canada and Mexico, as well as his threat to impose duties on all foreign shipments into the country, including from European allies, have caused confusion and uncertainty across global trade. Businesses usually respond to trade uncertainty by holding off on investments or passing on increased costs to customers. But the damage goes beyond small and large businesses domestically and abroad, Ziemba said. 'If one of the U.S. goals is relying less on China and Chinese supply chains for critical minerals, for energy, for other things like that, then the uncertainty about whether there's going to be tariffs and investment restrictions on its allies fly in the face of that goal,' she said.
