Sunday, January 20, 2013

Global trade pie, new disputes and the WTO

Chinese container ship bringing goods to Port of Long Beach
(Courtesy: LA Times)

Los Angeles Times has this interesting piece on the possible reason for increasing trade disputes in the context of growing pressure on the global trade pie.The currency undervaluation issue is slowly gaining prominence in the international trade arena - are we going to see a dispute soon? While Brazil is taking it up at the WTO Committees, voices from the EU against the Chinese currency marks a move towards growing unease with currency misalignment as a trade policy tool. WIll undervalued currencies be challenged as being WTO incompatible? While the sustainability of a legal claim on this issue is an entirely debatable matter (and requires a separate post or posts!), the possibility of a legal dispute being initiated cannot be ruled out. Is the WTO the right forum for it?

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