Discord at WTO meet: No deal on food security, fisheries subsidies, e-com

The World Trade Organisation failed to reach any new agreements on Wednesday, ending a three-day ministerial conference in discord in the face of stinging US criticism of the group and vetoes from other countries.

The stalemate dashed hopes for new deals on e-commerce and curbs to farm and fisheries subsidies and raised questions about the body’s ability to govern increasingly disputed global trade.

The frustrations led some ministers, including US Trade Representative Robert Lighthizer, to suggest that negotiations among smaller groups of “like-minded” WTO countries were a better approach going forward.

“We have not achieved any multilateral outcomes,” European Union Trade Commissioner Cecilia Malmstrom told a news conference. “The sad reality is that we did not even agree to stop subsidising illegal fishing.”

She said the meeting laid bare one of the WTO’s biggest deficiencies - that all agreements must have the unanimous consent of all 164 member countries. She said the United States was partly to blame but that other countries also blocked progress.

WTO Director-General Roberto Azevedo added that WTO members needed to do some “real soul searching” about the way forward and realize they cannot get everything they want.

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How China could use trade to force North Korea to play nice with the West

North Korea got the world’s attention – and President Donald Trump’s – when it said on July 4 that it had successfully launched an intercontinental ballistic missile for the first time. The weapon, potentially equipped with a nuclear warhead, could reach Alaska.

President Trump’s initial reaction included blaming China for letting things get this far. He tweeted that Chinese trade with North Korea “rose 40% in the first quarter,” implying that China is reluctant to punish North Korea for continuing to pursue nuclear weapons.

Is he right to call out China’s trade relationship with North Korea, which formally goes by the Democratic People’s Republic of Korea?

While the poor quality of the data on trade between these countries should lead one to be skeptical of any sweeping claims, Trump’s overall sentiment is probably correct. China has increased its trade with North Korea in recent decades and has likely done very little on that front to try to forestall this trading partner’s nuclear ambitions.

Yet a quick look at the data, however murky, shows just how much leverage China has, if it wishes to use it.

North Korea’s primary patron

In general, exports from one country to another can be mostly explained by the distance between them and the sizes of their markets, a pattern that holds for China and North Korea.

Geographically, they share a large border, which makes China a natural partner for trade. North Korea also abuts South Korea, which doesn’t trade with its rival, and shares a tiny border crossing with Russia, with whom it trades a little (more on that later).
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We could file suit against Trump at WTO over border tax: Germany

Germany could file a suit against the United States at the World Trade Organization over President Donald Trump's proposed border tax, the economy minister said on Friday ahead of a meeting between Chancellor Angela Merkel and Trump later in the day.

Trump has warned that the United States will impose a border tax of 35 percent on cars that German carmaker BMW plans to build at a new plant in Mexico and export to the U.S. market.

Asked how Germany would react to the proposed tax, Economy Minister Brigitte Zypries told Deutschlandfunk radio it was very difficult because of the complexities of such a tax system.

"The other option is that we file a suit against him at the WTO - there are procedures laid out there because in the WTO agreements it is clearly laid out that you're not allowed to take more than 2.5 percent taxes on imports of cars," Zypries said.

Later on Friday Trump and Merkel are due to hold their first meeting since the new U.S. president took office in January. Merkel is likely to press Trump for assurances of support for a strong European Union and a commitment to fight climate change while he is expected to seek her support for his demand that NATO nations pay more for their defense needs.

Germany's 50 billion euro trade surplus with the United States has been a source of tension between Washington and Berlin.

"We know ourselves that that's a problem and we're working on it," Zypries said.

"Thankfully we just heard today that wage rises have been agreed again so that means domestic demand can increase again and we want to address tax incentives for research ... so we're on a good path," she added.

Around 72,000 steel workers in northwestern Germany will get 2.3 percent more pay from April and then a further wage increase of 1.7 percent from May 1, 2018 employers' group Arbeitgeberverband Stahl said on Friday.

"The Americans need our machines and our plants ... and the other point is that we only have an export surplus in the machines and plants sector; in the service sector it's the other way round," due to big internet companies in the United States, Zypries said. (READ MORE)