Canada has not invited representatives from the US or China to a high-level meeting on reforming the World Trade Organisation (WTO). President Trump had earlier called for a drastic change in the operations of the WTO with a large reform program. The World Trade Organization (WTO) was established…
Canada has not invited representatives from the US or China to a high-level meeting on reforming the World Trade Organisation (WTO).
President Trump had earlier called for a drastic change in the operations of the WTO with a large reform program.
Background
The World Trade Organization (WTO) was established on January 1, 1995, under an agreement created from the Uruguay Round of multilateral trade negotiations. The Uruguay Round was the last of a series of periodic trade negotiations held under the auspices of the WTO’s predecessor, the General Agreement on Tariffs and Trade (GATT).
The WTO is the most important intergovernmental organisation to regulate and govern world trade. It has 140 members and 32 observer governments (most of which have applied for membership), representing over 95% of world trade. Agreements administered by the WTO cover a broad range of goods and services and apply to virtually all government practices that directly relate to trade – such as tariffs, subsidies, government procurement, and trade-related intellectual property rights. Coverage of the agreements is growing through negotiation.
US Trade representative Robert Lighthizer said the counter-retaliatory tariffs imposed by the five nations, which make a combined total of $2.85billion (£2.1billion), are illegal under WTO rules. The US, a founding member of the WTO, has withdrawn from the TPP and is renegotiating NAFTA. The WTO is one of the last major multilateral agreements that President Trump has not shunned.
Read more about our analysis of the 2018 G20 Ministerial meeting in Argentina here.
Analysis
Canada has not invited the US or China to a high-level meeting on reforming the World Trade Organisation (WTO). The country will host a “small group of like-minded” trade ministers in Ottawa in late October to discuss the global trade body.
Officials say countries like the US and China will be included at a later date in the reforms discussion process. The European Union, Australia, Japan, Singapore, and South Korea are expected to attend. Brazil, Chile, Kenya, Mexico, New Zealand, Norway, and Switzerland are also invited to the 24 and 25 October meeting.
“We recognize the challenges inside the WTO and believe in finding ways to do the work necessary to push for reforms,” said Joseph Pickerill, a press officer for federal International Trade Diversification Minister Jim Carr. “Canada is leading that effort.”
US President Donald Trump has made no secret of his dislike of multilateral international trade deals, and has threatened to pull the United States out of the WTO “if they don’t shape up”. The president has said he believes the global trade body too often rules against the US in disputes.
China, meanwhile, has been accused of not being completely transparent in opening up its economy the way it committed to under the WTO. Both major powers have also been involved in a trade war that sees each imposing tit-for-tat tariff on billions of dollars of goods ranging from suitcases to cutlery, wheat and wine.
Canada was seeking to forge an alliance of countries that support a rules-based multilateral trading system and that will defend it against rising protectionism. Canada’s plans focused on improving the effectiveness of the trade monitoring system, modernising trade rules, and strengthening dispute settlement mechanisms.
US – Canada’s relations have been tense in recent months as the two renegotiated the North American Free Trade Agreement, now renamed the US-Mexico-Canada Agreement (USMCA). An agreement in principle on the United States-Mexico-Canada Agreement (USMCA) was reached late on Sunday night after approximately 14 months of talks.
Assessment
Our assessment is that the trade ministers in the meet in Argentina were trying to overcome the negative impacts of the ongoing trade war by suggesting a possibility of serious reforms in the WTO. We believe the Canadian trade minister’s statement is intended to jump-start the discussions with like-minded countries so that a consensus can be arrived at, especially on issues related to the mechanism of trade dispute resolution. We feel that the upcoming ministerial meeting to be held in June 2019 in Japan, will see more concrete recommendations for potential WTO reforms.
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