[Ticker] EU, China, others agree on WTO body to settle disputes

Marco Green
January 25, 2020

"The movement" testifies to the high value the European Union as well as the engaging WTO members attach to keeping a two-step dispute settlement procedure", stated Phil Hogan, the European Union trade commissioner.

The arrangement, signed on the sidelines of the World Economic Forum (WEF) annual meeting, will allow the participating WTO members to preserve a functioning and two-step dispute settlement system at the World Trade Organization (WTO).

Washington froze the Appellate Body, which acts as a supreme court for worldwide trade, by blocking appointments for over two years.

'This remains a contingency measure needed because of the paralysis of the WTO Appellate Body, ' European trade commissioner Phil Hogan said in a statement.

'We will continue our efforts to seek a lasting solution to the Appellate Body impasse, including through necessary reforms and improvements, ' he said.

The multi-party interim arrangement will be based on Article 25 of the WTO Dispute Settlement Understanding (DSU).

In Davos, they were joined by more than a dozen other countries: Australia, Brazil, China, Colombia, Costa Rica, Guatemala, South Korea, Mexico, New Zealand, Norway, Panama, Singapore, Switzerland and Uruguay.

"The decision taken by the United States and India not to insist on adoption of compliance panel report till the issue gets heard at the Appellate Body effectively means that the U.S. will not have to change for a very long time its countervailing measures that were found to be against WTO rules by the compliance panel".

The European Union, China and 15 other World Trade Organization members agreed on Friday to create a temporary mechanism to settle trade disputes after USA action rendered the WTO incapable last month of acting as the umpire of global trade.

Brussels and the USA agree that the organisation needs a bit of profound reform, and also have worked together to draft new guidelines which could control Beijing's utilization of industrial subsidies, however they've failed to come to some understanding about the appellate body.

A new faultline in global trade has opened up with the European Union siding against the U.S. in backing a temporary system to unblock the World Trade Organisation (WTO).

'We have instructed our officials to expeditiously finalise work on such an arrangement.

The tribunal's paralysis has increased the tragedy in the WTO, which has been jeopardized by the inability of its own rule book to deal with China's version of state-sponsored capitalism and U.S. president Donald Trump's usage of punitive tariffs against trade competitions.

Other reports by Click Lancashire

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