Nation & World

As trade war grows, Europe moves to shield WTO

Reform pressure increase in face of U.S. opinion

Bloomberg

A vehicle unloads a cargo truck trailer at the Port of Zeebrugge in Zeebrugge, Belgium.
Bloomberg A vehicle unloads a cargo truck trailer at the Port of Zeebrugge in Zeebrugge, Belgium.

In the shadow of an escalating trade war, momentum is picking up to protect the World Trade Organization from turning irrelevant.

The European Union will host trade ministers from the United States and Japan next month in Brussels, according to two officials with knowledge of the meeting.

The gathering will be part of an effort to address China’s trade practices in a way that doesn’t marginalize the WTO, said the officials, who asked not to be identified because preparations are private.

The meeting will precede about 10 high-level confabs around the globe over the next year aimed at calming trade tensions.

The push to reform the Geneva-based WTO has gained urgency since Donald Trump became president, with his administration showing open disdain for the multilateral trade body and Trump himself saying, “The WTO is unfair to U.S.”

The EU is working on a proposal to amend the composition of the WTO as well as address about a half-dozen American complaints.

“The situation is serious,” WTO Director-General Roberto Azevedo told reporters last month in Geneva. “There are many leaders in the world that already understand that we need to have negotiations, that we need to sit down and talk, that we need to find solutions.”

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The Trump administration — arguing that the WTO is incapable of addressing the problems created by China’s rapid economic ascent — has resorted to unilateral tariffs on $50 billion worth of Chinese goods.

Beijing has retaliated in kind with duties on $50 billion worth of U.S. goods and pledged to respond if Trump follows through with his threat of levies on an additional $200 billion of Chinese products.

Washington, D.C.’s decision to sidestep the WTO has raised concern that the trade body could slide into obsolescence if steps aren’t taken to shore it up.

In May — a day after French President Emmanuel Macron proposed negotiations to reform the WTO — the United States, the EU and Japan met in Paris and reiterated their concern with some non-market-oriented measure of some partners.

The trilateral group issued a joint statement citing the need to address “the trade-distorting policies of third countries.”

In addition to the Brussels meeting next month, the EU soon will unveil a plan to reform the WTO, seeking to make negotiations more flexible, reduce trade costs, make the dispute-settlement system more transparent, and to strengthen the trade body itself, according to a draft proposal seen by Bloomberg.

Changing the WTO as well as addressing Chinese trade abuses will be discussed at a host of meetings around the world over the next year, including an October gathering in Ottawa of about a dozen trade ministers.

The topics also will be raised at a high-level Asia-Pacific Economic Cooperation meeting in Papua New Guinea in November; in December, leaders from the Group of 20 economies will bring up reform in Buenos Aires; Macron proposed discussions this fall in Paris; and there will be a ministerial meeting on the sidelines of the World Economic Forum in Davos.

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