More trade disputes

For those who follow Business Beyond the Reef, it is always interesting to see some updates. There was one recently on the recent trade disputes at the WTO - here.

Reproducing the list here:

European Union — Certain Measures on the Importation and Marketing of Biodiesel and Measures Supporting the Biodiesel Industry (Complainant: Argentina) 15 May 2013 

Australia — Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging (Complainant: Cuba) 3 May 2013 

Peru — Additional Duty on Imports of Certain Agricultural Products (Complainant: Guatemala) 12 April 2013 

India — Certain Measures Relating to Solar Cells and Solar Modules (Complainant: United States) 6 February 2013 

Indonesia — Importation of horticultural products, animals and animal products (Complainant: United States) 10 January 2013 

China — Measures Imposing Anti-Dumping Duties on High-Performance Stainless Steel Seamless Tubes (Complainant: Japan) 20 December 2012 

Argentina — Measures Relating to Trade in Goods and Services (Complainant: Panama) 12 December 2012 

European Union — Certain Measures Affecting the Renewable Energy Generation Sector (Complainant: China) 5 November 2012 

China — Measures Relating to the Production and Exportation of Apparel and Textile Products (Complainant: Mexico) 15 October 2012 

China — Certain Measures Affecting the Automobile and Automobile-Parts Industries (Complainant: United States) 17 September 2012 

United States — Countervailing and Anti-dumping Measures on Certain Products from China (Complainant: China) 17 September 2012 

United States — Measures Affecting the Importation of Fresh Lemons (Complainant: Argentina) 3 September 2012 

United States — Measures Affecting the Importation of Animals, Meat and Other Animal Products (Complainant: Argentina) 30 August 2012 

Argentina — Measures Affecting the Importation of Goods (Complainant: Mexico) 24 August 2012 

Argentina — Measures Affecting the Importation of Goods (Complainant: Japan) 21 August 2012 

Argentina — Measures Affecting the Importation of Goods (Complainant: United States) 21 August 2012 

European Union — Certain Measures Concerning the Importation of Biodiesels (Complainant: Argentina) 17 August 2012

European Union — Anti-Dumping Measures on Imports of Certain Fatty Alcohols (Complainant: Indonesia) 30 July 2012 

Australia — Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging (Complainant: Dominican Republic) 18 July 2012 

China — Anti-Dumping and Countervailing Duties on Certain Automobiles (Complainant: United States) 5 July 2012 

South Africa — Anti-Dumping Duties on Frozen Meat of Fowls (Complainant: Brazil)

I was surely following some of them. The list has a fair share of developed and developing countries, across continents and across issues from renewable energy to intellectual property. The notable exception is Africa except for the last case. The list is another indication of the robust, rule based dispute settlement system of the WTO.

Hat tip to Steve.

Free trade Matrix

Interesting matrix about free trade and protectionism. The matrix found here draws inspiration from Cato's "Free Trade Free Markets" report mentioned here. 

There is an explanation too:

"Free traders are those that oppose both barriers and subsidies. Interventionists are those that support both barriers and subsidies. Isolationists are those that support barriers but oppose subsidies. Internationalists are those that oppose barriers but support subsidies."

Where do you stand?

Asia and world trade

Two recent pieces on Asia and global trade rules:

1. Global Value Chains, trade policy and Asia - highlights the importance of GVCs to Asia

"Overall, there is huge potential for the spread of GVCs — sectorally in manufacturing, services, agriculture and energy, and geographically beyond the present hubs of NAFTA, the EU and East Asia. The big geographic prize is the extension of GVCs to South Asia, where much labour-intensive manufacturing production could be located."

2.  Future of the world trading system: Asian perspectives - highlights the role of Asia in the growth of world trade

"In the longer term, better coherence is vital between Asia’s regional trade rules and global trade governance. Improving the quality of large Asia-wide trade agreements, a WTO agenda on supply chains and trade agreements, and significant reforms of the WTO are necessary moves towards this end. Issue-based plurilateral agreements and an eventual multilateral agreement on investment can also play a role in facilitating coherence between regional and global rules on trade."

Some interesting insights into Asia and world trade. 

Local content was always there, my friend

For those who are following the domestic content requirements in renewable energy debate (I have blogged about it here, here and here), especially in the context of the Ontario Feed- in tariff case, a recent study highlights the universal use of domestic content requirements or local content requirements by countries in renewable energy programs around the world.

The study titled "Local Content Requirements and the Renewable Energy Industry - a Good Match? " by ICTSD is found here.

The paper concluded:

"Finally, as already emphasized at the beginning of this paper, further research is required to support a meaningful debate on this pressing issue. As indicated, to date there has been relatively little empirical analysis of the potential of LCRs being used in conjuncture with the creation of globally competitive innovators. This is especially the case for LCRs in RE policy. Econometric modelling of LCRs for RE growth is particularly needed. It is certain that many countries use LCRs in RE policies and that these schemes are often contradictory to WTO law. However, it is in the interest of neither the trade community, nor the green tech community, to have the necessary debate before the WTO Dispute Settlement System. Instead, there should be informed debate about what is effective, and what is agreed as appropriate, in the support of critically necessary green technology development."

A classic case of trade versus the environment? Or is there a need for a re-look at the trade rules itself? Or are they both compatible?

In another context, an interesting piece of the clash of policy goals of free trade, protection of the environment and geo-politics with respect to the dispute of Chinese solar panels imports into Europe.

All in all, trade and environment have a lot to sort out here.

Protectionism quietly returns?

Is protectionism on the rise? That is what a recent report of the Global Trade Alert seems to be saying. The report titled "Protectionism's Quiet Return" suggests that protectionism is quietly rearing its head again in different ways. While traditional modes of protectionism - tariff barriers and other import restrictions - may no longer be the predominant modes of protecting domestic industry, the report analyses the varying strands of protectionism amongst major economies.

It categorises "protectionism" into different categories:

1.Trade defence measures

2.Subsidies and bail outs

3.Tariff increases

4.Migration restrictions

5.Export and Investment restrictions

6. Other measures

While one may debate on what constitutes protectionism, the point that members are using innovative ways of protecting domestic industry from foreign competition is something to watch out for. While traditional methods catch the eye and are branded "protectionist" easily (like high tariffs or local content requirements) the innovative ways that countries use miss reprimand quite often.

"The past 12 months have seen a quiet, wide-ranging assault on the commercial level playing field. Governments have found ways to routinely favour domestic interests without provoking the ire of trading partners. Artful governments found no need to openly flout WTO rules either; instead, they used the wiggle room in existing rules and, if that wasn’t enough, employed policies not well disciplined by multilateral trade rules. Little of this showed up in traditional monitoring that was designed – like WTO rules – to tackle the protectionism of yesteryear. Less than half of recent protectionism involves measures on which data was collected systematically before the crisis."

Time for a re-look at how trade rules should tackle protectionism?

 

Kazakhstan makes its way to the WTO

After Russia about which I have blogged here, here and here, Kazakhstan seems set to be the next member of the WTO.The process of accession started in 1996 and is set to be completed by the end of the year.

More on that here.

As they say in Kazakhi language - Qoş, keldiñiz! (Welcome to the multilateral trading system)

International Investment Law and its complexities

I have not been keenly following the Investor-State dispute debate with all it's intricacies. But for those interested in the subject a paper by Joost Pauwelyn titled "At the Edge of Chaos: Emergence and Change in International Investment Law" provides a substantive account of issues involved.

This explanation of IIL was interesting:

"Understanding IIL as a multilayered, historical construct, where one historically-situated layer (treaty or institution) gets added to the next, also better explains today’s confusion around the multiple goals ascribed to IIL, ranging from promotion of FDI and protection of individual rights to sustainable development and good governance. IIL cannot be explained by a singular motive, agent or plan, be it BITs as credible commitment to attract sunk investments, BITs as photo opportunities tumbled into by uninformed developing countries, investor-state arbitration as depoliticization of state-to- state disputes or IIL as a dark conspiracy pupeteered by rent-seeking arbitrators and law firms. There is no single creator, plan or deliberate design. Rather, it is large and small steps, influences and interactions which together organically produce IIL. This also explains why recent empirical evidence that BITs only modestly (if at all) contribute to FDI has left most participants unfased and not dramatically influenced the system."

Dispute settlement and reforms

Are we going into a possibility of some Dispute Settlement reforms? The statement of the DG, WTO recently indicates this:

"Before I conclude, let me briefly mention the Dispute Settlement negotiations, where the Chairman of the DSB Special Session Ambassador Saborío, is now launching a new phase of the DSU negotiations on the basis of consultations he held last month with delegations.  As the first step of this new phase, the Chairman will now consult a group of delegations on essentially all outstanding issues in the DSU negotiations.  At these consultations, the Chairman will invite proponents and other interested participants to follow up with a focussed exercise among themselves to explore solutions on specific issues.  The Chairman intends to assist this exercise and ensure its transparency for all delegations."

Looking at this space for more details...

Trade facilitation and the developing world

For those following the Trade facilitation debate (I have blogged about it here and here), it's need and the latest negotiations that are on at the WTO a piece in VoxEU may throw some light. It argues that trade facilitation not only benefits the developed world but also exporting firms from the developing world.

Titled 'Who profits from trade-facilitation initiatives?' it argues that trade facilitation does have a positive impact on developing countries too.

Any counters?

Businesses and the WTO

A new page on the WTO website caught my attention. It was titled "Business, trade and the WTO". The rationale given for it was:

"Business, trade and the WTO have always been closely connected. The biggest beneficiary of transparent and predictable trade rules and obligations is the private sector. Without business, there would be no trade and no WTO. Business is an important interlocutor for both governments and the WTO. It is actively involved in the multilateral trading system and participates in public activities of the WTO."

I have written about this issue here and here.

Recognition of the importance of multiple stakeholders or the inability of governments to represent "all" stakeholder interests? 

Change by July 1st or else...

Could this be Russia's first WTO dispute as a respondent? Reports indicate that EU is contemplating a dispute against Russia with respect to its automobile recycling fee which it asserts discriminates imported cars from domestically manufactured cars. I had blogged about this months ago here, here and here.

A proposed Bill to amend the law to make it "WTO compliant" is under consideration - that is making it applicable to both imported as well as domestically manufactured cars.A detailed paper on the present law is found here. I am not sure what the amended proposal is - perhaps removing the exceptions relating to domestic manufacturing since the earlier law applied to domestic manufacturing too.

All eyes on July 1st - the deadline given for initiation of a dispute. This case also vividly shows how domestic legislation and policy making is impacted by multilateral trade rules. Russia, after entering into the WTO last year after 18 years of tough negotiations, would have to, inevitably face the realities of the multilateral trade body membership - dispute settlement.

Annual Report 2013

The Annual Report 2013 of the WTO is out.

The chapter on dispute settlement brought out an interesting aspect of "consultations" which is an obligatory process before a formal panel is established to hear a WTO dispute.The number of disputes filed in 2012 were the largest in the past decade.

"Sharp increase in “requests for consultations” 

The number of “requests for consultations” – the first stage in dispute settlement proceedings and an obligatory step before the establishment of a panel to adjudicate a complaint – increased more than threefold in 2012 to 27, compared with eight in 2011 (see Figure 1).

However, this does not mean that 27 new disputes will necessarily be working their way through the dispute settlement system in 2013, as about half of disputes overall do not proceed beyond the consultations stage. Often, the parties reach a satisfactory settlement, or a complainant decides for other reasons not to pursue the matter. This shows that consultations are often an effective means of dispute resolution in the WTO.

Consultations are one of the key diplomatic features of the WTO dispute settlement system. They allow parties to clarify the facts involved and the claims of the complainant, possibly dispelling misunderstandings as to the true nature of the measure(s) at issue. In this sense, consultations serve either to lay the foundation for a settlement or for further proceedings under the DSU. For those disputes that are not settled at the consultations stage, which may last up to 60 days, the next step is the establishment of a panel by the DSB."

A safety valve, perhaps?