European Commission proposes WTO reform
The European Commission published proposals yesterday to help the World Trade Organization ( WTO) get out of its “deepest crisis yet”, saying forced technology transfer has become a “major trade irritant”.
The Commission’s paper offers wide-ranging proposals for reforming global trade rules.
According to Cecilia Malmström, commissioner for trade, the WTO is grinding to a halt.
She said that economic growth and technological changes over the past century have transformed trade routes and the way in which countries trade.
“The result has been bigger gaps in the rules of the WTO—either because rules have become outdated, or because of the absence of rules in many areas,” said Malmström.
One of the areas of discussion in the Commission’s paper is how to tackle forced technology transfers and industrial subsidies. According to the paper, forced technology transfer has emerged as a major problem.
To overcome this, the WTO should introduce methods to improve overall market access conditions for foreign direct investment. The paper also wants the WTO to address distortive and discriminatory trade practices.
The Commission’s announcement came a day after the US Trade Representative released a list of approximately $200 billion worth of Chinese imports that will be subject to additional tariffs. The US’s actions are in response to China’s alleged theft of US IP and forced technology transfer.
The additional tariffs will come into effect on September 24 and be subject to an initial tariff of 10%. That figure will increase to 25% on January 1, 2019.
Malmström added that every country will be hurt if the WTO system does not adapt.
Additional topics of discussion in the Commission’s paper include how the international trade rulebook can be updated so that it’s fit for purpose for the global economy. The Commission proposed new rules and the updating of old ones in its publication.
“We are working with member states on this, the European Parliament, and also with many other partners,” said Malmström.
The Commission will start talks with China to begin a working group on WTO issues, and is already in three-way discussions with the US and Japan.
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