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TWN
Info Service on WTO and Trade Issues (Nov22/07) Geneva, 15 Nov (D. Ravi Kanth) — The World Trade Organization (WTO) has issued a report on 14 November highlighting increasing trade restrictions being maintained by the G20 (Group of 20 developed and developing countries) between mid-May and mid-October 2022, including export restrictions being implemented at an increased pace, but it remained somewhat silent on the security-driven trade-restrictive measures being imposed by the United States. In a bilateral meeting between US President Joe Biden and Chinese President Xi Jinping on the margins of the G20 leaders’ summit in Bali, Indonesia on 14 November, the US President raised concerns over China’s alleged non- market practices. However, President Biden kept rather silent on the recent slew of US security-driven trade measures being imposed against China that seem to violate the WTO’s core principles, particularly MFN (most-favored-nation) treatment. In turn, the Chinese President apparently expressed concern about several trade-related measures implemented by the US administration, according to news reports. Against this backdrop, the WTO’s trade monitoring report on G20 trade measures seemed to have provided limited information on what is happening with the US trade policy and its recent spate of allegedly WTO-inconsistent trade measures. It appears that the US has not voluntarily notified its measures to the WTO. The WTO report, coinciding with the ongoing G20 leaders’ summit that started in Nusa Dua, Bali, Indonesia, on 15 November, has only provided a rather mixed assessment of what is happening in the area of trade restrictions that include export restrictions, measures relating to general economic support (not related to COVID-19), and COVID-19 related economic support measures. The G20 members include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkiye, the United Kingdom, the United States, and the European Union. The WTO Director-General, Ms Ngozi Okonjo-Iweala, claimed that “while some trade-restrictive measures have been lifted by G20 countries, the report indicates that the trend has been going in the wrong direction.” While touting the outcomes of the recently concluded WTO’s 12th ministerial conference (MC12), Ms Okonjo- Iweala said “G20 economies must build on their collective pledges from the 12th ministerial conference and demonstrate leadership to keep markets open and predictable, so that food and fertilizer in particular can flow to where they are needed.” Despite the war in Ukraine, the report suggests that supply-chains remained resilient at large. However, it does not mention the alleged disruption of the supply-chains due to US trade measures such as the provisions in the CHIPS Act and the Inflation Reduction Act, said an analyst, who asked not to be quoted. Significantly, the report suggests that there is an overall increase in the pace of implementation of new export restrictions since the COVID-19 pandemic emerged in 2020. According to the report, “as of mid-October 2022, WTO members still had in place 52 export restrictions on food, feed, and fertilizers, in addition to 27 export restrictions on products essential to combat COVID-19 .” The report notes that “during the review period, G20 economies introduced 66 new trade-facilitating measures (covering trade worth USD 451.8 billion) and 47 trade-restrictive measures on goods (with a total coverage of USD 160.1 billion)”, which were not related to the pandemic. GENERAL ECONOMIC SUPPORT The report (on page 50) suggests that “some members expressed strong support for the Secretariat’s coverage on economic support measures and stressed the importance of enhanced transparency in this area.” At the same time, other members underlined “the need for consensus on the scope of the exercise and called on Members to further participate in the Reports and to engage in discussions to improve the exercise.” As regards “regular economic support measures” that are not related to the COVID-19 pandemic, the report said that “in response to the DG’s 31 August 2022 request for information for this Trade Monitoring Report, 33 WTO members (Albania; Colombia; the European Union; Hong Kong, China; Ukraine; and United Kingdom) volunteered information on 24 regular general economic support measures unrelated to the pandemic, of which seven were provided by G20 economies.” It emphasized that “the Secretariat’s own research suggests that during the review period, many more support measures with potential impact on trade flows were implemented by WTO members.” However, it did not elaborate on these economic support measures that were implemented by the major developed countries, particularly the US. The report said that “the regular support measures communicated by WTO members and those identified by the Secretariat during the review period to a large extent reflected crisis-related issues related to energy and food security.” Yet, other support measures implemented during the review period, according to the report, included “transport- related aid schemes and measures to support the automotive sector, including investments in manufacturers of electric vehicles.” Other measures, according to the report, “included health-related financial grants, support to businesses and MSMEs (micro, small, and medium enterprises), inflation-fighting fiscal measures and R&D (research and development) measures.” The report, however, remained somewhat silent on the recent US subsidy policies that were alleged to be discriminatory and inconsistent with the WTO rules. At a recent meeting of the WTO’s Committee on Subsidies and Countervailing Measures on 25 October, China said the US subsidies worth $447 billion under Washington’s CHIPS Act of 2022 and Inflation Reduction Act of 2022, though laudable, “run afoul of WTO principles and rules, impair the legitimate rights and interests of other members, and distort international trade and investments.” The “litmus test” for the WTO’s coverage of the allegedly WTO-inconsistent trade measures imposed by the US will be known when it issues a report on the US during its Trade Policy Review (TPR), to be held on 14 December. It remains to be seen whether the WTO Secretariat will subject the US measures to critical scrutiny or “whitewash” them as it did in the past, said people familiar with previous US TPR meetings. +
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