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25 June 2018 at 09:15 BST

US attacks WTO as EU engages in midnight retaliation against US

US takes aim at WTO trade disputes, while EU in midnight retaliation against US actions


In its latest challenge to the global trading system, the United States has informed the World Trade Organisation that appeals rulings in trade disputes could be vetoed if they take longer than the allowed 90 days. A formal statement was made by US Ambassador Dennis Shea which threatened to erode binding dispute settlement, widely seen as a major bulwark against protectionism and a key element of trade enforcement at the WTO.

Sticking to the rules

Mr Shea told the WTO’s dispute settlement body that rulings by the WTO’s Appellate Body were invalid if they took too long. Rulings would no longer be governed by “reverse consensus”, whereby they are blocked only if all WTO members oppose them. ‘The consequence of the Appellate Body choosing to breach (WTO dispute) rules and issue a report after the 90-day deadline would be that this report no longer qualifies as an Appellate Body report for purposes of the exceptional negative consensus adoption procedure,’ Mr Shea stated. According to a Bloomberg report, an official who attended the meeting said other WTO members agreed that the Appellate Body should stick to the rules, but none supported Mr Shea’s view that late rulings could be vetoed, and many expressed concern about his remarks. Rulings are routinely late because, the WTO says, disputes are abundant and complex. Things have also been slowed down due to president Trump blocking new judicial appointments, increasing the remaining judges’ workload.

Midnight EU move

President Donald Trump has threatened to levy a 20 per cent import tax on European Union cars, the latest in an unprecedented campaign of threats and tariffs to punish US trading partners. In retaliation, as of midnight, the European Union (EU) has applied tariffs of 2,800 million euros to a list of products from the United States. Sweet corn, juice or cranberries, among the affected products. The measures of rebalancing are one of the ways of action with which Brussels is seeking to retaliate against US tariffs on steel (25%) and aluminum (10%), after reporting the case to the World Trade Organization (WTO) on June 1st. The measures imposed today are aimed at imports worth 2,800 million euros, the maximum that the EU can impose at this time, while the total European steel and aluminum affected by US taxes reaches 6,400 million euros. The remaining 3,600 million euros may be "rebalanced" in the future, following a favorable decision in the dispute before the WTO or three years after the first imposition of tariffs by the United States.


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