Transcript WTO/Trade and Global Protectionism

WTO and International
Trade Agreements:
Under Pressure in Light of the
Global Economic Downturn
University of Chicago Law School,
CLE Lunch & Learn
June 30, 2009
Mark Nguyen, Principal
MDN Trade LLC
Global Protectionism
on the Rise…
 U.S. procurement barriers in the stimulus bill (2009
Economic Recovery Act); “10+2” customs and
security requirements; House climate change bill
 Chinese export restraints; security and testing
requirements (e.g., CCC, Info Security, WAPI)
 European standards/technical barriers on chemicals
(Reach); materials content (RoHS); subsidies
 Latin American import tariffs; licensing measures;
VAT taxes
 Overall rise in subsidies, antidumping (27%+ in
2008) and border measures
World Bank & WTO Studies
on Protectionism
 World Bank & WTO studies in March 2009 cite rise of
protectionism, nearly 80 measures since 2008
 Despite G-20 pledge in November 2008, 17 out of 20
have imposed 47 measures
 Examples: U.S. and foreign auto subsidies; EU
export subsidies; Russian auto tariffs; Ecuador tariffs
on 600 goods; Indonesian limitations on 5 categories
 Bank forecasts a 3-4% decline in global output; WTO
a 9% decline in global trade in 2009
… a return to the 1930s?
Barriers & Remedies
Countries
Barriers
Remedies
U.S., EU,
Canada
Automotive bailouts and subsidies
WTO SCM
U.S.
Procurement; differential of 25%
WTO GPA
Argentina
Increase in VAT taxes on hi-tech goods
None
Ecuador
Raised tariffs on 600 goods categories
WTO
schedule
India
Special additional duty (4%); antidumping measures; import bans
WTO AD;
schedule
China
Ban of certain raw material exports;
technical standards; export subsidies
WTO SCM,
TBT, Protocol
Malaysia
Restrictions on foreign labor
WTO GATS
Indonesia
Restrictions of five goods categories
WTO NT
Russia
Raised tariffs on autos
None
WTO/FTAs: Legal Obligations
not necessarily,
WTO/FTAs dispute settlement mechanisms
critical to enforcing obligations
WTO/FTAs as negotiating forums for reducing
barriers and create disciplines
WTO/FTAs multilateral and bilateral
committees/reviews monitor barriers
But still a gloBal dilemma…
WTO/FTAs: Dispute Settlement
WTO/FTAs dispute settlement mechanisms
discourage barriers, and can be used to
challenge inconsistent measures
Even the smallest countries have prevailed
(e.g., US-Antigua/Barbuda online gaming)
Lengthy process; minimum of two years and
compliance is recommended, not mandatory
WTO/FTAs: Negotiating Forum
WTO/FTAs have been an active forum for
negotiations on liberalization and disciplines
WTO Doha Round launched in 2001; stalled
since breakdown of talks in August 2008
FTA activity slowing in U.S.; Panama & Korea
(2007) and Colombia (2006) stalled
indefinitely in Congress
U.S. to host APEC in 2011; Bogor 2010/2020
goals unlikely; FTAAP a bold new initiative?
WTO/FTAs: Monitoring Mechanisms
WTO has numerous committees that meet
regularly to review compliance (e.g., CTG,
TBT, SPS, CTS, RTA, ITA)
WTO Trade Policy Review: comprehensive
review every 2-5 years
FTAs have annual and periodic bilateral
meetings to review compliance
Review bodies have little power except for
increased transparency and pressure
US-China Trade Frictions
New WTO dispute launched: China-US/EC on
raw materials/chemicals export restrictions
Existing dispute on China export subsidies;
copyright/IPR protection; poultry
China “green dam” Internet filtering
requirement July 1 (postponed), information
security and WAPI telecoms standards
China currency legislation pending in
Congress
US-China Dialogue
Joint Commission on Commerce and Trade
(JCCT) and Strategic Economic Dialogue
(SED) continuing in the Obama
Administration by Secretaries Geithner and
Locke, USTR Kirk
China bowed to pressure on information
security deadline (May 1) and green dam
software (July 1); but barriers remain on IT
and other products
U.S. Congress and
Domestic Barriers
 Many members of Congress reluctant to support free
trade; some hostile
 U.S. “Buy America” legislation on procurement has
discriminatory effect toward non-GPA members like
India, China, Brazil
 House bill on climate change (June 26) includes
restrictions on carbon-intensive imports
 Obama Administration more pragmatic towards
NAFTA, China, FTAs than expected
 U.S. states imposing barriers and reluctant to support
liberalization
Prospects for Recovery. . .
a New Trading Order?
 G-20 leadership and dialogue beyond G-8 countries
 Obama administration pragmatic; launch of new
trade initiatives?
 Trade and climate change/environmental initiatives
 Global recovery linked to trade liberalization,
facilitation and growth after 2008-2009 downturn
 Restart of Doha Round in 2009? Regional and
bilateral initiatives?
Thank You! Contact Info
Mark Nguyen
Principal, Global Regulatory Affairs
MDN Trade LLC
424 S. Broadway #703
Los Angeles, CA 90013
[email protected]
Tel: (310) 487-1457
Fax: (213) 341-2417