New Pest Rules for Containers on Horizon, Cash-Strapped Agency Tells WTO

(WTO)

Work is underway on standards for “minimizing pest movement by sea containers and conveyances in international trade”, and is at an earlier stage on similar standards for air containers and aircraft, the IPPC told the WTO’s Sanitary and Phytosanitary (SPS) Measures Committee.

Australia, the EU and US supported the IPPC’s call for extra funding as it faces a projected budget deficit of $1.2m in 2011 and urged delegations to raise the issue with relevant agencies in their countries.

Delegations are now close to agreeing on some actions on standards set by the private sector – mainly on defining private standards and sharing information – but continue to differ on actions beyond that. They also continue to differ on proposals on how to set up a system that would encourage members to make more use of mediation by the chairperson to resolve some of their differences.

And four new specific trade concerns, among the fewest in recent meetings, were raised as part of the committee’s main task of overseeing the SPS Agreement’s implementation, with the EU presenting a list of 14 concerns it considers to have been resolved. Read more details here.

Trade Negotiators Push to Liberalize Public Procurement

(New York Times – Reuters)

Trading powers are in a final push to liberalize the market for purchases by public authorities worth hundreds of billions of dollars a year, and are seeking to lock China into the global procurement system as well.

The talks are separate to the World Trade Organization’s long-running Doha round to free up global trade, but could arguably have a much bigger impact on businesses.

Government procurement has moved center stage after the economic crisis put public infrastructure spending at the heart of economic stimulus packages. At the same time “Buy American” policies in the United States and similar measures in other countries have raised fears of protectionism in the sector.

And the huge infrastructure needs and projects of emerging economies have raised the prospect of lucrative new markets opening in an area so far dominated by rich nations. Diplomats at the WTO say a new government procurement agreement (GPA) or at least its outlines, could be concluded this year and talks to bring in new members have gathered pace.

“Our objective is to wrap up the revision as soon as possible and continue to work closely with China and others as they enter the process of accession,” Robert Kasper, a U.S. trade diplomat to the WTO, said at a forum last month. Read more here.

U.S. Says Doha Trade Talks Could Stretch Into 2012

(Reuters – Doug Palmer)

Siddiqui cites meaningful progress in past six months

A top U.S trade official indicated on Tuesday that the long-running Doha round of world trade talks could stretch into 2012, but said some progress had been made over the past six months. “The U.S. view is that there is no shortcut to a Doha success,” U.S. chief agricultural trade negotiator Isi Siddiqui said in the prepared text of a speech given in Brussels, a copy of which was released in Washington.

“Deadlines won’t do it, mandated formal processes won’t do it, and attempts at high-level ‘Big Bang’ political events won’t do it,” Siddiqui told a European farm policy audience. Read more here.

Russia Resolves Key Issues with U.S. over WTO Accession

(Bridges Weekly)

Russia and the United States have reached bilateral resolutions on several trade issues, removing another set of hurdles facing the entry to the WTO of the world’s largest economy that is not already a member of the global trade body.

On October 1, Russian Finance Minister Alexei Kudrin announced in Yalta that Russia had resolved its bilateral negotiations with the US over WTO accession, and would now move to conclude its multilateral negotiations in Geneva. US Trade Representative Ron Kirk welcomed “bilateral agreement on key issues related to the accession process,” adding that Moscow would now be free to devote more attention to remaining barriers at the multilateral level.

According to a statement from Kirk’s office, Washington and Moscow have reached agreements in principle on issues such as intellectual property rights, government procurement, and transparency in the decision-making process on trade-related issues. The bilaterally-agreed solutions reflect what the US would like to see in Russia’s eventual WTO commitments; the compromises will now be considered by other countries in the WTO Working Party on Russia’s accession. Read more here.

U.S. Trade Policy Extremely Open, World Trade Organization Finds

(America.gov)

“The U.S. trade and investment regimes are among the most open in the world,” the World Trade Organization (WTO) Secretariat reported September 29 in its 10th review of the trade policies and practices of the United States.

“Like most other WTO Members, the United States very largely resisted pressures to respond to the global economic recession by tightening restrictions on imports,” the Secretariat reported in its executive summary. “The restraint shown by the United States helped forestall a worldwide slide into protectionism.”

Because surveillance of national trade policies is fundamentally important to the work of the WTO, the organization has established a trade policy review mechanism under which all WTO members are examined periodically. The frequency of each country’s review varies according to its share of world trade. The previous review of U.S. trade policies took place in 2008. Read more here.

US, Europe Join Trade Fight over Ontario’s Green Energy Plan

(CB Online – Maria Babbage, The Canadian Press)

Ontario’s green energy ambitions appear to be pitting the country’s biggest trading partners against Canada in a dispute over government subsidies for solar and wind power projects. Both the United States and the European Union want to join consultations over a trade complaint made by Japan to the World Trade Organization, saying they have a significant stake in the discussions.

Even though the dispute is with Ontario, the federal government is ultimately responsible to defend the province because Canada is a signatory to the WTO, said International Trade Minister Peter Van Loan. “We always want to maintain good trading relationships with our major partners, and we always want to make sure that our actions are World Trade Organization compliant,” he said Friday in an interview with The Canadian Press. “In this case, we certainly encourage the Ontario government to take advantage of the consultations phase of this process to seek a satisfactory resolution.”

Earlier this week, both the U.S. and the EU argued in separate letters to the WTO that they have a “substantial trade interest” in the talks. Read more here.

WTO Calls on US to Cut Farm Subsidies

(AFP via CommonDreams.org)

The World Trade Organization called on the United States on Wednesday to cut its farm subsidies, saying that they were so “considerable” that they could affect market prices. In a report analysing Washington’s policies since 2007, the trade body said that while promoting its exports, the United States should also reduce “distorting measures ... including ... support for agriculture.”

The WTO noted that support granted to the sector under the multi-billion-dollar 2008 Farm Act are mostly “linked to prices and or production.” Thanks to this support, “producers of cereals, oilseeds, and cotton are effectively insulated from market prices while sugar and dairy have market price support programmes,” said the WTO. “The large size of the agriculture sector means that the absolute amount of support is considerable, varies from one year to another depending on prices, and can affect world prices,” it added. Read more here.

WTO Confident of 9.5% Growth in Trade Despite Crisis in EU

(The Financial Express – Ronojoy Banerjee)

The World Trade Organisation is confident of maintaining the predicted 9.5% plus growth in world trade, organisation’s deputy director-general Alejandro Jara told FE in an interview. Jara said that despite the economic crisis brewing in the European Union and its subsequent impact on world trade, overall merchandise trade would grow at a very healthy rate. “Looking at the year so far, our experts feel that it (world trade) is going to grow around 9.5%-10%,” he said. WTO director-general Pascal Lamy had said in March that after a “dismal” year 2009 when world trade dipped 12%, it would grow at a healthy rate of 9.5% in 2010. Read more here.

Canada’s Data Undisputed on Damages Following COOL

(Country Guide)

The U.S. government hasn’t challenged Canada’s “economic evidence” of the harm caused by mandatory country-of-origin labelling (COOL), but blames “market participants” rather than COOL itself, Canada’s cattle agency reports.

Attending the first round of oral hearings in a challenge of U.S. COOL by Canada and Mexico at a World Trade Organization (WTO) dispute settlement panel, the Canadian Cattlemen’s Association said Canada’s team was solid in its preparations and professional in refuting the U.S. team’s “creative suggestions.” “We correctly anticipated the arguments the U.S. would use to defend COOL and while there were no surprises, it is clear that the U.S. intends to defend this trade barrier vigorously,” CCA president Travis Toews said in a release Friday.

According to the CCA, Washington’s defense of COOL at the dispute settlement body’s hearings in Geneva, Switzerland was to claim that COOL is designed to inform consumers, not restrict trade, and that it hasn’t directly caused any segregation or other negative impact on Canadian cattle. Canada retorted that the market reaction to COOL was “not only predictable but in fact the intended outcome of COOL’s proponents,” the CCA said. Read more here.

Canadian Farmers Challenge U.S. Labelling Requirements at WTO

(Bridges Weekly)

Canada is challenging the U.S.’s country-of-origin labelling (COOL) requirements for beef and pork at a meeting of the WTO’s Dispute Settlements Body (DSB). The Canadian government, backed by several business groups – including some from the U.S., claims that the implementation of COOL requirements is immensely costly forcing Canadian businesses to seek less money for their beef so as to absorb the cost of implementing the requirement. They maintain that COOL is a technical barrier to trade (TBT) and as such illegal under WTO law.

“The COOL measure is not intended to address health or safety concerns,” Canada said in its opening statement. “The objective of the COOL measure was to distort the conditions of competition in the U.S. market to favour U.S. cattle and hogs compared to imported livestock.”

The COOL act requires that consumers be informed of the country of origin of meat by a label on the sales package. To receive an “A” label, cattle must be born, raised, and slaughtered in the United States. Meat from cattle with a mixed life – for example, born and raised in Canada but slaughtered in the U.S. – must have a label indicating the mix. Read more here.

U.S. Takes China Trade Cases to WTO

(Industry Week – Agence France-Presse)

Trade tensions between the United States and China ratcheted up another notch on Sept. 15, as Washington called on the WTO to probe unfair Chinese trade practices. The United States asked the World Trade Organization to investigate China’s allegedly unfair treatment of U.S. steel and electronic payment providers, the first step toward sanctions.

“We are concerned that China is breaking its trade commitments to the United States and other WTO partners,” U.S. trade representative Ron Kirk said. Amid mounting U.S. anger about China’s trade policies, Kirk’s office said it would ask the WTO for “consultations” about Beijing’s policies, a step that could lead to sanctions. Read more here.

Japan Challenges Canadian Renewable Energy Incentives at WTO

(Bridges Weekly)

Japan launched dispute settlement proceedings against Canada at the World Trade Organization on September 13 by saying that the province of Ontario’s green energy plan unfairly pressures its producers of clean power to buy hardware from local manufacturers.

Specifically, Japan is challenging Ontario’s Feed-in Tariff Program (FIT), which enables the province to subsidise electricity operators that use renewable energy produced using stringent local content requirements. The “made-in-Ontario” requirement demands that up to 60% of all green energy project inputs be manufactured in the province as it strives to create local jobs. [...]

But Japan says the local-content provisions breach portions of the General Agreement on Tariffs and Trade (GATT), and fall under the definition of a “prohibited subsidy.” It has asked for “consultations” with Canada under the WTO process, the first stage of a formal trade dispute. Read more here.

EU Suspends WTO Sanction Bid Against U.S. in Dumping Dispute

(Industry Week – Agence France-Presse)

U.S. provides reassurances it will bring measures into compliance with global trade rules

The European Union said Wednesday it had suspended a request at the World Trade Organization for the right to impose sanctions on Washington over a controversial U.S. anti-dumping calculation.

"Yesterday the European Union and the United States asked the arbitration panel deciding on the level of sanctions that the EU is entitled to impose on the United States in the zeroing dispute to suspend its work," said John Clancy, spokesman of the European bloc. Read more here.

WTO Chief Urges G-20 Leaders To Break Doha Impasse

(Associated Press)

The head of the World Trade Organization (WTO) on Monday called for Group of 20 leaders to make a big push to break the impasse in the WTO trade negotiations known as the Doha Round, expecting the long-stalled global trade talks may be concluded next year.

The Doha Round of trade talks started in the Qatari capital in 2001 to free up world trade by opening up markets and cutting tariffs and subsidies in rich countries.

But the 153-nation talks collapsed in 2008 as countries failed to meet on issues such as agricultural subsidies and industrial tariffs.

“We all know that this will not happen before the end of this year,” WTO Director-General Pascal Lamy said in a press conference Lamy said more efforts are needed to conclude the pending talks on the Doha Round, adding that the upcoming G-20 summit in Seoul may push the trade talks forward.

“Maybe next year, depending on the progress made on substance,” he said. Read more here.

China Slams Allegations of Exchange Rate Subsidies

(AFP)

China dismissed allegations by US producers over its exchange rate as “groundless” on Wednesday, as Washington said there was no evidence that the undervalued yuan constituted a state subsidy.

The US Commerce Department said Tuesday it found insufficient evidence to probe allegations that China’s undervalued currency is the equivalent of a state subsidy to its manufacturers. The allegations were made by US producers angry about imports of aluminum products and coated paper from China.

“We noted the ruling made by the US Commerce Department... according to the related agreements of the World Trade Organisation, foreign exchange issues do not constitute subsidies,” China’s Commerce Ministry said. “We hope the US side will continue to follow WTO rules on cases of trade remedy and carry out (trade) probes in a prudent way,” it said in a statement, adding that specific allegations against the Chinese products were “groundless.” Read more here.

Lawmakers Seek to Drum Up Support for House Vote on China Currency Bill

(World Trade Interactive)

Reps. Tim Ryan, D-Ohio, and Tim Murphy, R-Pa., are working to obtain their colleagues’ signatures on a letter calling on House leaders to bring the Currency Reform for Fair Trade Act (H.R. 2378) to the House floor for a vote. According to a draft of the letter, this bill would direct the Department of Commerce to treat currency undervaluation as a prohibited subsidy, which would allow the imposition of antidumping or countervailing duties on injurious imports from any country that persistently undervalues its currency. The letter asserts that this measure has been written to be consistent with U.S. rights and obligations as a member of the World Trade Organization and the International Monetary Fund. Read more here.

WTO Says No to Hi-tech Duties in EU

(Industry Week – Agence France-Presse)

The World Trade Organization has backed the United States, Japan and Taiwan in their complaint against EU duties on high-technology products, according to a ruling published on August 16.

"Having found that the European Communities has acted inconsistently ... we recommend that the Dispute Settlement Body request the European Communities to bring the relevant measures into conformity with its obligations," the WTO panel of arbitrators said.

The plaintiffs had accused the EU of violating the WTO's Information Technology Agreement by imposing duties on imports of products including television set-top boxes, flat-screen panels and printers with multiple functions. Read more here.

WTO Said to Rule Against EU's Policy on Anti-Dumping

(Bloomberg – Jennifer M. Freedman)

The European Union’s method of applying extra duties on imports it considers to be unfairly priced breaks global trade law, the World Trade Organization said, according to a person familiar with the ruling.

WTO judges in Geneva concluded the EU’s policy of imposing a single blanket duty on imports discriminates against Chinese exporters, said the person, who declined to be identified because the ruling is still confidential.

The decision comes a year after China lodged a complaint against the EU over the 27-nation bloc’s plan to impose five- year levies on imports of Chinese iron or steel fasteners, valued at about 575 million euros ($743 million) in 2007. The EU said at the time that the tariffs would “prevent further distortions and restore fair competition.”

The ruling may have broader implications by compelling the EU to begin imposing anti-dumping tariffs on a company-by-company basis. Read more here.

World Trade to Grow 10% in 2010

(Industry Week – Agence France-Presse)

The World Trade Organization on July 23 raised its forecast for growth of global commerce to 10% this year, with its director general saying that even this might yet “turn out to be too low.” WTO chief Pascal Lamy said: “Our forecast for world trade this year is plus 10% in volume after the minus 12% we registered in ‘09.” Lamy was speaking at the launch of the trade body’s annual report on the sidelines of the Shanghai World Expo.

In a separate speech at Shanghai’s Institute of Foreign Trade, Lamy said that after last year’s dramatic slump, “trade growth is coming back fast, thanks in no small measure to the continuing dynamism of China and the others.” The WTO’s latest forecast marks a rise from the 9.5% issued in March. The secretariat had warned then that the figure could prove too optimistic as markets were at that point unsettled by Europe’s sovereign debt crisis.

In the trade body’s annual trade report, the WTO focused on the issue of trade in natural resources. It called for greater global cooperation on such trade, warning that a failure to work together could spark new tensions. “I believe not only that there is room for mutually beneficial negotiating trade-offs that encompass natural resources trade, but also that a failure to address these issues could be a recipe for growing tension in international trade relations,” said Lamy in the report. Read more here.

WTO Report Calls For More Cooperation Among Governments in Natural Resource

(WTO)

In the WTO flagship publication World Trade Report 2010 launched on 23 July 2010 in Shanghai and Geneva, the economists maintain that “in a world where scarce natural resource endowments must be nurtured and managed with care, uncooperative trade policies could have a particularly damaging effect on global welfare.”.

The World Trade Report 2010 focuses on trade in natural resources, such as fuels, forestry, mining and fisheries. The Report examines the characteristics of trade in natural resources, the policy choices available to governments and the role of international cooperation, particularly of the WTO, in the proper management of trade in this sector.

Director-General Pascal Lamy, in his foreword, said: “I believe not only that there is room for mutually beneficial negotiating trade-offs that encompass natural resources trade, but also that a failure to address these issues could be a recipe for growing tension in international trade relations”.

“Well designed trade rules are key to ensuring that trade is advantageous, but they are also necessary for the attainment of objectives such as environmental protection and the proper management of natural resources in a domestic setting,” he added. The key elements of the Report:

Natural resources have a number of distinctive features — the skewed geographical distribution of natural resources, their exhaustibility, the widespread occurrence of economic effects of natural resource exploitation disregarded by the market (externalities), high natural resource dependency in some economies, and tendencies towards high price volatility in natural resource markets. These specificities affect the modes of resource trade as well as the effects that international commerce in natural resources has on welfare.

Gains from resources trade — Due to the geographical concentration of natural resources, trade has the potential to improve efficiency and increase welfare by shifting resources from regions of relative abundance to regions of relative scarcity. However, welfare comparisons are complicated by dynamic factors, namely the exhaustibility of natural resources, and pervasive market failures. The latter include imperfectly competitive markets and open access to resources when property rights are poorly defined. Four other major issues are commonly associated with natural resources trade — the presence of environmental externalities, the effect of technology on the sustainability of resources, the so-called “curse” faced by resource-rich economies, and the high volatility that characterizes some resource sectors. International trade interacts with all these factors in complex ways, in some cases exacerbating existing problems and at times providing solutions.

Trade policy in resource sectors — Resource-rich countries often restrict exports through a variety of means such as export taxes and quantitative restrictions, whereas tariff s and other import restrictions in resource-scarce countries are low. There are, however, two important qualifications to this general rule. First, domestic policies that are likely to affect trade flows, including subsidies, technical regulations and consumption taxes, are frequently used. Second, the structure of protection that resource exporters face tends to rise with the stage of processing (tariff escalation).

Policy interventions in natural resource sectors are justified on welfare grounds by the specific features of natural resources. Governments employ trade policies as instruments to achieve a number of legitimate objectives, such as improving resource conservation or stimulating diversification of exports away from dominant resource sectors. However, three significant caveats need to be kept in mind. First, trade measures are often a second best policy to address problems associated with natural resources.

Second, restrictions on trade have beggar-thy neighbour effects, either because they may affect world prices or because they shift profits between exporters and importers. Third, trade and domestic measures in natural resource sectors are close substitutes in some cases.

Resources trade regulation — The general principles of the multilateral trading system provide a framework for limiting non-cooperative trade policies, including within resource sectors. Several WTO rules have relevance in relation to the specific features of natural resources. WTO rules, however, were not drafted to regulate natural resources trade and may not always respond adequately to sectoral specificities.

The Report identifies several areas where consideration could be given to intensified cooperation. One such area involves trade policies such as export taxes, where bargains might ameliorate uncooperative trade outcomes. A second issue concerns the scope for conservation policies, such as the treatment of subsidies aimed at improving the conservation of natural resources. A third issue relates to the facilitation of trade flows of natural resources, specifically the scope of freedom of transit. A fourth area concerns the clarity of current WTO rules and the coherence between these and rules of international law embedded in different agreements that may be relevant to natural resources.

Key facts:

The total value of world trade in natural resources was US$ 3.7 trillion in 2008, or nearly 24 per cent of world merchandise trade. This value has increased more than six fold between 1998 and 2008.

The share of fuels in natural resource trade rose from 57 per cent in 1998 to 77 per cent in 2008. Fish and forestry products each represented 3 per cent of world trade in 2008, while mining products were responsible for 18 per cent.

The top 15 exporters of natural resources were responsible for 52 per cent of world resource shipments in 2008, while the top 15 importers received 71 per cent of traded resources.

Applied tariffs are (on average) 23 per cent lower in natural resource sectors relative to merchandise trade. Average bound rates in natural resource sectors are 1.7 per cent in developed countries and 30.4 per cent in developing and least-developed countries. Export taxes cover 11 per cent of natural resources trade compared to 5 per cent of other merchandise trade. Export restrictions on natural resource products represent 35 per cent of notified export restrictions.

Several natural resource sectors appear prominently in the subsidy notifications. Available research suggests that global subsidies to fisheries are in the order of US$ 25 and 29 billion annually.