The multilateral trading system has three pillars: negotiation, dispute settlement, and administration. Of these, negotiation is the one of greatest importance. The World Trade Organization (WTO) is the only place where fully multilateral—that is, global—trade negotiations can take place. It has representatives present from 164 Members, accounting for more than 98 percent of world trade. Most of the remaining countries that are not Members, some two dozen, are in the process of accession and almost all of them are observers.

The WTO has unrivalled infrastructure to facilitate negotiations—a skilled Secretariat made up of experienced experts thoroughly versed in the existing rules of the trading system, teams of interpreters and translators on call, numerous meeting rooms with audiovisual equipment for simultaneous interpretation into three languages (and more on special occasions), and connections via the web for remote participation. It is the meeting place for a large number of working committees, a repository of their past proceedings, and beyond this, it holds the records of over 600 cases litigated among its Members. In terms of physical facilities and support staff, everything is ready for negotiations.

Almost all Members have resident missions located within a few minutes’ drive from the WTO headquarters in Geneva. The missions have a core of staff attending committee meetings. The heads of delegation—the permanent representatives to the WTO who are ambassadors sitting as the General Council of the organization—have been delegated the full plenary powers of the Ministerial Conference. They are empowered, in the view of their counterparts, to commit their countries to trade agreements. Ever since the International Court of Justice issued its Eastern Greenland Decision, ministers (particularly foreign ministers) have been able to bind their governments even with a verbal declaration, enough so that they can definitively transfer sovereignty to another nation of substantial tracts of their nation’s territory. All the physical and legal elements are present for trade negotiations to take place.

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To read the full report from the Peterson Institute for International Economics, please click here.

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Medical devices are technologies that help diagnose or treat patients, or prevent illness without the use of drugs. They include everything from MRI scanners, hip implants and scalpel blades to smartphone apps that treat depression. The EU is currently struggling to implement a wide-ranging change in how medical devices are regulated – from the 1993 Medical Device Directive (MDD) to the 2017 Medical Device Regulation (MDR). Phased introduction of the MDR was due to be completed by May 2020, but was extended until this year due to COVID-19 pressures. This new regulatory framework is designed to ensure more thorough testing of devices before they can be used on patients, and more rigorous monitoring of performance of devices once on the market. The MDR’s implementation, however, has not gone smoothly.

To read the full report from the Centre for European Reform (CER), please click here. 

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Nigel Cory (@NigelCory) is an associate director covering trade policy at ITIF. He focuses on cross-border data flows, data governance, and intellectual property, and how they each relate to digital trade and the broader digital economy.

Luke Dascoli is the economic and technology policy research assistant at ITIF. He was previously a research assistant in the MDI Scholars Program at the McCourt School of Public Policy’s Massive Data Institute. He holds a B.A. in Political Economy from Georgetown University.

To read the original research report from the Information Technology & Innovation Foundation, please visit here

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China has taken full advantage of its WTO rights. It has also largely ignored the responsibilities and commitments through its embrace of state-directed capitalism predicated upon an aggressive innovation mercantilism. This mercantilism denies foreign enterprises access to Chinese markets on reciprocal terms; distorts global markets, including for advanced-technology goods; and deprives nations of the benefits they believed they would receive when granting China accession into the community of trading nations.

In this report, China’s accession to the WTO is recounted along with the trade rules with which it fails to comply. The report also describes the economic benefits China has accrued in part by not complying with its WTO commitments. Lastly, it offers policy recommendations for policymakers from the United States and like-minded nations to address the continuing China trade challenge. Our initial 2015 Information Technology and Innovation Foundation (ITIF) report on this topic, on which this report is based, is premised on China’s false promises to the WTO. Even with a full-scale Section 301 investigation initiated by the Trump administration, China has made little progress in fulfilling a wide range of its WTO commitments over the past two decades.

Stephen Ezell is vice president, global innovation policy, at the Information Technology and Innovation Foundation (ITIF). He focuses on science and technology policy, international competitiveness, trade, manufacturing, and services issues.

To read the original report from the Information Technology & Innovation Foundation, please visit here

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The Trump Administration attributed this shift in policy to its determination to close a large and persistent gap between U.S. and foreign government practices that it said disadvantaged or discriminated against U.S. firms. In addition, it justified many of its tariff actions—particularly those against China—by pointing to alleged weaknesses in WTO dispute settlement procedures and the inadequacy or nonexistence of WTO rules to address certain Chinese trade practices. It also cited the failure of past trade negotiations and agreements to enhance reciprocal market access for U.S. firms and workers.

While the Biden Administration is reportedly reviewing the previous administration’s trade policies, most analysts do not expect any immediate changes to Section 301 actions or to the tariff exclusions on U.S. imports from China.

To view the full report from the Congressional Research Service, please click here.

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G20 members confirmed that they continue to fully support the
objectives of the WTO and share common ground based on its
foundational principles. The views expressed by G20 members can
provide political support to advance the necessary reform of the WTO in
Geneva.

The following section summarizes the G20 discussions into three
categories: (i) common objectives, (ii) foundational principles, and (iii) the
collective vision to advance the WTO reform.

COMMON OBJECTIVES

At their Extraordinary Summit on 26 March, G20 Leaders reiterated the
objective “to realize a free, fair, non-discriminatory, transparent,
predictable and stable trade and investment environment, and to keep
our markets open.” Our discussion highlighted the role of the WTO to
achieve Members’ objectives, and specifically noted the importance of
the WTO rules in supporting economic recovery from the COVID-19
pandemic.

All members reconfirmed their commitment to the objectives enshrined
in the Marrakesh Agreement Establishing the WTO, with most members
noting that some of these objectives are also reflected in the Marrakesh
Declaration.

FOUNDATIONAL PRINCIPLES

With respect to the principles that underpin the WTO, the Chair notes
that G20 members’ responses referred to the foundational principles
embodied in the Marrakesh Agreement and included in the covered
agreements, with most members noting that some of these foundational
principles are also reflected in the Marrakesh Declaration.
The Chair notes the following outcomes of the exchange of views on foundational principles:

• All members agreed to list the following as part of the principles of the WTO:

o Rule of law

o Transparency

o Non-discrimination

o Inclusiveness

o Fair competition

o Market openness

o Resistance to protectionism

o Reciprocal and mutually advantageous arrangements, acknowledging that agreements provide for differential and more favorable treatment for developing economies, including special attention to the particular situation of least developed countries

• Most members stressed that ‘sustainability’ is a principle of the WTO

• Most members stressed that ‘market-oriented policies’ is a principle of the WTO.

• Some members stressed that ‘special and differential treatment’ is a principle that is integral to and underpins the WTO and that should be preserved. Many members, highlighting that WTO rules contribute to economic growth and development, expressed the view that S&DT is a tool to facilitate the achievement of WTO objectives and should be applied on the basis of demonstrable needs.

• Members noted the practice of consensus-based decision making in the WTO, expressly carried over from the GATT in the Marrakesh Agreement. Some members consider this practice to be a principle of the WTO.

COLLECTIVE VISION TO ADVANCE THE NECESSARY WTO REFORM

Concerning the policy vision for how agreed functions of the WTO should be fulfilled to meet agreed objectives, the G20 discussions focused on the need for members to fully comply with the WTO obligations negotiated and agreed to by WTO Members.

G20 members agreed on the need to provide political support to achieve the necessary reform of the WTO and to improve the functions of the WTO. A general sentiment emerged that in order to engage in effective reform, members must fully adhere to existing WTO obligations on transparency. Members shared ideas and referenced initiatives on transparency that could be pursued at the WTO in order to enhance trade predictability and to bolster compliance with WTO notification obligations and recognized the need to support Members that face capacity constraints in meeting their obligations.

All members reaffirmed the importance of multilateral approaches to negotiations. Most members suggested that, using the flexibilities provided by the WTO framework, “open plurilateral” negotiations could be pursued by members who were ready to move ahead on particular issues and highlighted the momentum that, in the light of historical precedents, such initiatives can provide towards multilateral outcomes. Other members recalled existing rules on negotiations and decision making in the WTO and emphasized that new rules be adopted by consensus.

Recalling Tsukuba Trade Ministers’ call for action regarding “the functioning of the dispute settlement system consistent with the rules as negotiated by the WTO Members”, members agreed that the dispute settlement system is in urgent need of reform. Divergent views were expressed on the nature of reforms that would ensure the WTO dispute settlement system faithfully supports the WTO’s important functions of monitoring and negotiation.

CONCLUSION

The Saudi G20 Presidency extends its appreciation to all TIWG representatives for their feedback and engagement in the Riyadh Initiative. The Presidency notes the following outcomes of the Riyadh Initiative:

• G20 support for the objectives enshrined in the Marrakesh Agreement Establishing the WTO, with most members noting that some of these objectives are also reflected in the Marrakesh Declaration.

• Affirmation of foundational principles of the multilateral trading system with different views being expressed on various issues.

• Determination to tackle the necessary reform of the functions of the WTO and to discuss all proposals in this regard.

• The need for Members to fulfill their notification obligations as a necessary condition for Members to effectively monitor compliance with existing rules.

• Recognition by most members of the value of pursuing plurilateral negotiations on issues where progress can be achieved and emphasis by some members that new rules be adopted by consensus.

• Shared sense that the dispute settlement system needs urgent reform, with divergent views on the nature of such reforms.

The Saudi G20 Presidency sincerely hopes that the Riyadh Initiative will help advance the shared interest of WTO Members in bringing about the necessary reform of the WTO, so it can fulfill its objectives of improving the lives of the world’s citizens and ensuring peaceful, inclusive and sustainable economic development through multilateral cooperation.

To download the full communique, please click here

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At a time when the United States needs to repair its alliances and form new partnerships, trade offers an avenue to forge habits of cooperation. Before the United States-Korea Free Trade Agreement (KORUS) negotiations, trade tensions were a net negative on bilateral relations. But the United States and South Korea emerged as closer partners, as Wendy Cutler and Seok young Choi explain, and their cooperation was extended into the Asia-Pacific Economic Cooperation (APEC), the G20, and other international fora. Trade became a stabilizing force in the U.S.-South Korea alliance, and South Korea became an advocate for high standards in subsequent trade agreements.

The United States now hopes that Kenya will play a similar role in Africa. “The two countries recognize that an agreement between them has the potential to serve as a model for additional agreements across Africa,” the governments said in a joint statement last month. But Judd Devermont cautions that any deal should not detract from an existing success, the Africa Growth and Opportunities Act (AGOA), nor harm the prospects of the African Continental Free Trade Area. The United States is more likely to succeed, he explains, if it can fashion a deal with an affirmative focus. Rather than merely countering China, the goal should be to advance Africa’s future.

Signaling is another strategic objective. The first U.S. free trade agreement, with Israel, was of modest economic consequences but significant symbolic value. “It underscores the importance of Israel to the United States as an ally, as a trading partner, and as a friend, and it underscores the U.S. commitment to Israel’s security and prosperity,” President Reagan said in 1985. Today, signaling is central to the case for a free trade agreement with Taiwan. “For the United States, the benefits would include a stronger partner in critical strategic trade sectors, a chance to define positive new trade rules in a crucial region, and—perhaps most important—bolstered U.S. leadership in Asia,” writes former ambassador Kurt Tong.

Competing with China also requires looking across the Atlantic. The combined heft of allied economies could present a formidable front. As Heather Conley writes, “Can the combination of the world’s largest and fifth-largest economies create a sufficient geo-economic ballast, in the form of a U.S.-UK free trade agreement, to balance China’s rise?” Tariffs are already low, but there is room for mutual gains in aligning and harmonizing standards and regulations. Political calendars are challenging. But done right, the gains from a deal could extend beyond economics to deepen cooperation in the defense and digital realms.

Digital trade, currently a thorn in transatlantic relations, must become a central part of an allied economic strategy. The United States has momentum, having completed deals covering digital trade with Canada, Mexico, and Japan. Building a consensus with the European Union, the United States’ largest trading partner, will not be easy, but the strategic stakes make it a necessity. “Given the centrality of the digital economy to politics, power, and life, building this coalition of support for free digital trade will be central to building a democratic bloc that can compete effectively in the twenty-first century,” Sam duPont writes.

Trade agreements can also promote U.S. values. “The concept that hard work will be rewarded, that anyone has the chance to achieve economic mobility, and that workers should be respected are American values that should be front and center in U.S. economic policy,” writes Jack Caporal, arguing that labor provisions can enhance U.S. soft power. There is also a national security nexus with some of these issues. By prohibiting fishery subsidies and illegal, unreported, and unregulated (IUU) fishing, a source of revenue for criminal enterprises, the U.S-Mexico-Canada Agreement also benefits U.S. national security, Grace Hearty explains.

Humanitarian responses can harness the power of trade as well. “Covid-19 may be the most important humanitarian crisis of the twenty-first century. Every tool at the United States’ disposal should be considered in this light. U.S. trade policy may prove to be one of the most powerful such tools for heading off disaster,” writes Matt Warner. With foreign aid budgets being squeezed, trade offers a critical avenue of support, one that is also more sustainable.

China’s response to the pandemic, the most recent episode in a longer-running economic offensive, demonstrates the power that trade can carry. China’s “mask diplomacy” is a prime example of using inducements to advance strategic interests, Audrye Wong explains. Other examples can be seen along China’s sprawling Belt and Road, where promises of investment and the prospect of additional trade encourage foreign capitals to align with Beijing’s policy preferences. China has even used inducements to influence Taiwan’s election. Beijing is not waiting for Washington to rediscover this vital tool.

Trade, of course, is no magic bullet for all the foreign challenges the United States faces. U.S. domestic interests should come first, and agreements must have sound economics alongside their strategic benefits. There are plenty of practical challenges to harnessing the positive power of trade, which is less easily directed and slower to act than kinetic force. But the United States neglects this tool at its peril. After all, it is the positive power of economics that makes coercive applications possible. As it leans heavily on the stick, the United States must rediscover the power of the carrot.

To view the original article at CSIS , please click here

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To view the full report, please click here

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The brief calls for a ceasefire between Beijing and Washington on criticism of the two countries’ initial responses to the SARS-CoV-2 virus, accompanied by a commitment to an eventual international investigation of what went wrong in all countries during the early phases of the pandemic. The brief concludes with six areas in which the United States and China should seek cooperation: to share best practices to stem the further spread of the coronavirus; to develop effective vaccines at the earliest possible date; to prepare in advance for mass manufacturing and global distribution of vaccines that are developed; to assist the neediest countries in fighting the disease; to manage debt crises and combat famines in the developing world that might result from the pandemic, and to preserve global trade by privileging diversification of supply chains and national strategic reserves over economic nationalism and less efficient forms of production.

To view the full report at the Brookings Institution, please click here

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We also indicate the potential for some reforms to improve the efficiency of the system. These include: introducing a reporting system on the outcome of STCs, use of STCs raised in committees to fill the gap of missing notifications, systematic use of the STC mechanism at the stage of draft measures, building-in the dispute settlement system the requirement to raise the matter and discuss it within the relevant committee before filing a formal dispute settlement case.

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To read the original report, click here.

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