As the U.S. continues to paralyze the World Trade Organization’s system for appealing trade disputes, 17 members of the trade organization announced Friday they will collaborate on an alternative initiated by Canada and the European Union to resolve complaints that emerge between them in the meantime.
The announcement was made on the sidelines of the World Economic Forum in Davos, Switzerland, where ministers representing like-minded trading partners have been grappling with how to proceed as a group, unless and until Americans’ concerns about the need for WTO reform can be resolved.
“We believe that a functioning dispute settlement system of the WTO is of the utmost importance for a rules-based trading system, and that an independent and impartial appeal stage must continue to be one of its essential features,” said the joint statement released Friday by the group.
The WTO continues to try to resolve disputes at its committees, and panels are still struck to review complaints and report back when member countries are alleged to have broken the rules.
But as of December, the WTO’s appellate body no longer has enough members to hear new appeals.
For the last few years, the United States has refused to agree to the appointment of any new adjudicators until its concerns about the existing process are addressed. Without a consensus among its members on how to proceed, the trade organization is paralyzed.
Canada’s complaint and request for arbitration with the United States over softwood lumber duties is among the cases now stalled.
Canada and the European Union first announced an interim arrangement for resolving trade disputes with each other last July. Now fifteen more countries have climbed aboard. They are:
Australia.
Brazil.
China.
Chile.
Colombia.
Costa Rica.
Guatemala.
Republic of Korea.
Mexico.
New Zealand.
Norway.
Panama.
Singapore.
Switzerland.
Uruguay.
Many of these countries met in Davos this week as part of the WTO’s Cairns group: agricultural exporters who share the common cause of wanting to liberalize trade barriers.
But the most significant player in this new alternative scheme may be China.
Temporary solution
Many of the American concerns about the WTO centre on complaints about whether the terms of China’s membership in the WTO are fair. But China has a reasonable track record of complying with the final decisions of the WTO’s now-paralyzed dispute resolution process.
Neither China nor the U.S. was part of the Ottawa group, a collection of WTO members that also held a working dinner in Davos hosted by Canada’s trade minister, Mary Ng, to continue talks on WTO reform that began under Canada’s leadership in 2018.
The door was left open to China and anyone else joining the broader conversation around possible solutions at an appropriate time.
Friday’s agreement now sets these countries on a path to being able to resolve future disputes with China, a dominant player in international trade because of its massive market size, manufacturing capacity and corresponding economic influence.
European Trade Commissioner Phil Hogan emphasized that the parallel system initiated by Canada and the EU is only meant to be temporary, and the partners involved are still working towards WTO reform as a whole. (Virginia Mayo/Associated Press)
The statement characterizes this interim system as “contingency measures” to “allow for appeals amongst ourselves” when the findings of those panels are in dispute. It’s based on Article 25 of the WTO’s dispute settlement rules, which allow for multi-party interim arrangements.
The statement says it will be in place “only and until a reformed WTO Appellate Body becomes fully operational” and any other WTO members are welcome to join these already signing on.
‘Dramatic’ move on WTO reform coming: Trump
More work remains to determine exactly how the new appeals process will work and what arbitrators will hear its cases.
“We have also taken proper note of the recent engagement of President Trump on WTO reform,” the group’s joint statement said.
In his closing news conference before leaving Davos Wednesday, the American president told reporters that a delegation from the WTO’s directorate was visiting Washington next week or the week after, and portrayed these talks as a form of negotiation toward reform.
Because the organization isn’t top-down, but only proceeds based on negotiations between its members, it’s unclear any kind of deal could result, although it would allow the White House to communicate its concerns directly.
“We’re going to do something that I think will be very dramatic,” Trump said, without giving any indication what exactly he had in mind.
WINNIPEG – Police in Winnipeg say one person has died and three more were injured after a pickup truck smashed into a bus shelter on Portage Avenue during the morning commute.
Police say those injured are in stable condition in hospital.
It began after a Ford F150 truck hit a pedestrian and bus shelter on Portage Avenue near Bedson Street before 8 a.m.
Another vehicle, a power pole and a gas station were also damaged before the truck came to a stop.
The crash forced commuters to be rerouted and knocked out power in the area for more than a thousand Manitoba Hydro customers.
This report by The Canadian Press was first published Sept. 13, 2024.
KAMLOOPS, B.C. – A 35-year-old man has been charged with second-degree murder after his mother’s body was found near her Kamloops, B.C., home a year ago.
Mounties say 57-year-old Jo-Anne Donovan was found dead about a week after she had been reported missing.
RCMP says its serious crime unit launched an investigation after the body was found.
Police say they arrested Brandon Donovan on Friday after the BC Prosecution Service approved the charge.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets climbed to their best week of the year.
“It’s been almost a complete opposite or retracement of what we saw last week,” said Philip Petursson, chief investment strategist at IG Wealth Management.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
While last week saw a “healthy” pullback on weaker economic data, this week investors appeared to be buying the dip and hoping the central bank “comes to the rescue,” said Petursson.
Next week, the U.S. Federal Reserve is widely expected to cut its key interest rate for the first time in several years after it significantly hiked it to fight inflation.
But the magnitude of that first cut has been the subject of debate, and the market appears split on whether the cut will be a quarter of a percentage point or a larger half-point reduction.
Petursson thinks it’s clear the smaller cut is coming. Economic data recently hasn’t been great, but it hasn’t been that bad either, he said — and inflation may have come down significantly, but it’s not defeated just yet.
“I think they’re going to be very steady,” he said, with one small cut at each of their three decisions scheduled for the rest of 2024, and more into 2025.
“I don’t think there’s a sense of urgency on the part of the Fed that they have to do something immediately.
A larger cut could also send the wrong message to the markets, added Petursson: that the Fed made a mistake in waiting this long to cut, or that it’s seeing concerning signs in the economy.
It would also be “counter to what they’ve signaled,” he said.
More important than the cut — other than the new tone it sets — will be what Fed chair Jerome Powell has to say, according to Petursson.
“That’s going to be more important than the size of the cut itself,” he said.
In Canada, where the central bank has already cut three times, Petursson expects two more before the year is through.
“Here, the labour situation is worse than what we see in the United States,” he said.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 13, 2024.
