WTO seeks ‘pos­i­tive mo­men­tum’

Trade or­ga­ni­za­tion’s deputy head says China ‘ has a big role to play’ in co­op­er­a­tive push for re­forms

China Daily European Weekly - - Cover Story - By LIU JIA in Brus­sels For China Daily

The World Trade Or­ga­ni­za­tion wants its mem­bers to work more closely for re­forms and modernization, ac­cord­ing to its deputy head.

At the two-day G20 Lead­ers’ Sum­mit, which be­gins on Nov 30 in Buenos Aires, Ar­gentina, lead­ers were ex­pected to agree on WTO re­form plans — im­prov­ing on the un­suc­cess­ful at­tempts to reach a con­sen­sus on the topic at the Asia-Pa­cific Eco­nomic Co­op­er­a­tion fo­rum in mid-Novem­ber.

Lead­ers gath­ered in the Ar­gen­tine cap­i­tal also were look­ing to Pres­i­dent Xi Jin­ping and US Pres­i­dent Don­ald Trump to im­prove the tone of global trade re­la­tions.

“It needs to be in­spired by the po­lit­i­cal lead­ers. A pos­i­tive sig­nal from the G20 would def­i­nitely strengthen con­fi­dence in the world econ­omy,” says Karl Brauner, the WTO’s deputy di­rec­tor-gen­eral.

Brauner, a lawyer be­fore turn­ing to a ca­reer in trade pol­icy, says he al­ways seeks so­lu­tions and set­tle­ments through di­a­logue. “I think any plat­form where a con­ver­sa­tion could take place should be used,” he em­pha­sizes.

“We, the WTO, are a fo­rum where these con­ver­sa­tions can take place. I would like to see those who have is­sues with one an­other sit down and talk. ... As the fo­rum for the ne­go­ti­a­tions on these is­sues, we pro­vide the venue, but the in­spi­ra­tions should come from the top.”

Brauner’s ar­eas of re­spon­si­bil­ity in­clude deal­ing with the WTO’s dis­pute set­tle­ment sys­tem as well as ad­min­is­tra­tion and gen­eral ser­vices, in­clud­ing bud­get and fi­nance and hu­man re­sources.

“The WTO has grown from a small num­ber to 164 mem­bers cur­rently (of which 117 are de­vel­op­ing coun­tries or sep­a­rate cus­toms ter­ri­to­ries). There is some con­cern with cer­tain de­vel­op­ments among mem­bers. And there are re­form pro­pos­als com­ing from the Eu­ro­pean Union, for ex­am­ple, and also Canada, on some very spe­cial­ized is­sues,” he says.

“I think this is a very good de­vel­op­ment, if those who would like to have a re­form dis­cus­sion could join forces and create a pos­i­tive mo­men­tum,” Brauner says.

A week be­fore the G20 Sum­mit, Wang Shouwen, vice-min­is­ter of com­merce, said at a news con­fer­ence that Bei­jing backs re­forms to en­hance the au­thor­ity and ef­fec­tive­ness of the WTO, which is fac­ing “pro­found cri­sis”.

The Chi­nese gov­ern­ment has stressed that such re­forms must up­hold the or­ga­ni­za­tion’s core val­ues of nondis­crim­i­na­tion and open­ness, pro­tect the in­ter­ests of de­vel­op­ing mem­bers and up­hold the de­ci­sion­mak­ing mech­a­nism.

Bei­jing un­veiled five pro­pos­als to sup­port these three prin­ci­ples, aimed at de­fend­ing the dis­pute set­tle­ment reg­i­men, avoid­ing abuse of the na­tional se­cu­rity ex­cep­tion clause to im­pose tar­iffs, and pre­vent­ing uni­lat­eral ac­tion by mem­bers.

Brauner says: “We want to up­hold mul­ti­lat­er­al­ism, and we can see China is spon­sor­ing cer­tain re­form pro­pos­als. China is a very im­por­tant eco­nomic power in the world, and China should also have an in­tel­lec­tual in­put in what is hap­pen­ing by way of re­forms, which is wel­come.

“There is no doubt that China has a big role to play. China is also No 2 in the con­tri­bu­tions to the bud­get of the WTO, and has over­taken Ger­many — the tra­di­tional No 2 con­trib­u­tor, now the No 3,” he adds.

In 2017, China con­trib­uted around $18.8 mil­lion (16.6 mil­lion eu­ros; £14.7 mil­lion) to the con­sol­i­dated bud­get of the WTO’s Sec­re­tariat and the Ap­pel­late Body Sec­re­tariat.

Ac­cord­ing to the 2018 WTO bud­get, China’s con­tri­bu­tion will rise to nearly $19.3 mil­lion, which will ac­count for 9.8 per­cent of the to­tal bud­get.

Be­fore join­ing the WTO, Brauner was di­rec­tor-gen­eral for ex­ter­nal eco­nomic pol­icy at the Ger­man Fed­eral Min­istry for Eco­nomics for 12 years. He was re­spon­si­ble for ex­port pro­mo­tion and ex­port con­trols, as well as Ger­many’s bi­lat­eral eco­nomic re­la­tions out­side the Eu­ro­pean Union.

From his per­spec­tive, the EU, which is now work­ing with China, the United States and oth­ers, has es­tab­lished it­self as a co­or­di­na­tor between key mem­bers of the WTO.

“The EU is play­ing the role as a bridge. This could be and should be help­ful,” he says, adding that the most ur­gent task now is to pre­vent the with­er­ing away of the WTO’s Ap­pel­late Body, which is re­spon­si­ble for re­solv­ing dis­putes, a core func­tion of the WTO.

The body is sup­posed to have seven judges, but there cur­rently are only three, and if the va­can­cies can­not be filled soon, the or­ga­ni­za­tion’s dis­pute set­tle­ment regime will be jeop­ar­dized.

The EU, the world’s largest trad­ing bloc, an­nounced on Nov 26 that it and 11 other WTO mem­bers, in­clud­ing China, Aus­tralia, Canada and Mex­ico, will present a joint pro­posal for changes to over­come the cur­rent dead­lock in the Ap­pel­late Body. The pro­posal will be pre­sented to the en­tire mem­ber­ship at the meet­ing of the WTO Gen­eral Coun­cil on Dec 12. The EU is also propos­ing re­in­force­ment of the Ap­pel­late Body’s in­de­pen­dence and im­par­tial­ity and im­prove­ment of its ef­fi­ciency.

In re­sponse to calls by some Eu­ro­pean stake­hold­ers for mem­bers to seek al­ter­na­tive ap­proaches to over­com­ing hur­dles, Brauner says mul­ti­lat­eral agree­ments are un­ques­tion­ably bet­ter, be­cause they will cover all 164 mem­bers and pro­vide a bet­ter ba­sis for le­git­i­macy.

“The pluri­lat­eral agree­ments are ne­go­ti­ated only among a smaller group of mem­ber­ship. But they are al­lowed in the WTO if they fol­low the prin­ci­ples of most trade recog­ni­tion.

“We are now in a sit­u­a­tion where, af­ter the min­is­te­rial con­fer­ence in Buenos Aires (in De­cem­ber last year), we have four joint ini­tia­tives, which are pro­moted by smaller groups of mem­bers ... But they are open to the full mem­ber­ship. And we can only hope that they will pro­duce some out­comes that at­tract more than the orig­i­nal num­bers,” Brauner says.

“All re­forms even­tu­ally hinge on the good co­op­er­a­tion of the play­ers in the WTO. So it would be an il­lu­sion to think that we tweak a few rules here and sharpen a few def­i­ni­tions there, and this is our re­form and then things work,” he adds.

“What we need is the will­ing­ness to co­op­er­ate. And if the will­ing­ness to co­op­er­ate is gen­er­ated among the ma­jor play­ers in the world econ­omy, this would clearly be very help­ful,” he adds.

In ad­di­tion to col­lab­o­ra­tion between mem­bers, he also calls for ur­gent ac­tion from the global busi­ness com­mu­nity. “I think it is clear from his­tory that the Uruguay round (of trade ne­go­ti­a­tions) was suc­cess­fully con­cluded be­cause the busi­nesses ac­tu­ally ran up to the politi­cians and said: ‘Do this, fi­nal­ize it.’”

In terms of the fu­ture agenda, Brauner high­lights e-com­merce as a grow­ing force in global trade, with huge po­ten­tial to drive in­clu­sive growth for world economies, and de­vel­op­ing coun­tries in par­tic­u­lar. “Mem­bers are work­ing to find rules to fa­cil­i­tate e-com­merce. E-com­merce is also looked upon as an el­e­ment of de­vel­op­ment, of help­ing de­vel­op­ing coun­tries to have eas­ier ac­cess to the world mar­ket,” he says.

On the mar­gins of the WTO min­is­te­rial con­fer­ence in Buenos Aires in De­cem­ber last year, a new ini­tia­tive ti­tled En­abling E-com­merce was launched by the WTO, the World Eco­nomic Fo­rum and the Elec­tronic World Trade Plat­form.

The ini­tia­tive, which aims at driv­ing pub­lic-pri­vate di­a­logue on e-com­merce, brings to­gether lead­ing voices from gov­ern­ments, busi­nesses and other stake­hold­ers to ad­dress chal­lenges and find so­lu­tions for a more in­clu­sive e-com­merce land­scape in the years ahead.

“Busi­nesses have an enor­mous say. And we need this en­gage­ment from busi­nesses now. En­cour­ag­ing the busi­nesses to play a role is also very im­por­tant,” Brauner says. “All that we are do­ing now, even­tu­ally, is ... for the peo­ple’s ben­e­fit.”

“China is a very im­por­tant eco­nomic power in the world, and China should also have an in­tel­lec­tual in­put in what is hap­pen­ing by way of re­forms, which is wel­come.” KARL BRAUNER WTO’s deputy di­rec­tor-gen­eral


WTO deputy di­rec­tor-gen­eral Karl Brauner says he ex­pects that China will have its own in­put in the WTO re­form.

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