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This Week In Trade

WTO members hope to name acting head this week

Posted: July 27, 2020

World Trade Organization members are hoping to coalesce around naming one of the four deputy directors-general this week to temporarily lead the body as the selection process for a new director-general is stretching past the end of next month when Roberto Azevêdo is set to step down.

The WTO’s General Council chair said last week that he hoped to call a meeting this week to finalize the director-general selection process and name an interim WTO head. An informal heads of delegation meeting is on the books for Tuesday and a General Council could be called on short notice, Geneva sources have said.

WTO members must still formalize the third phase of the selection process, which involves whittling down the list of eight candidates.

The WTO’s four deputy directors-general have each said they are willing to serve as an acting director-general. Some Geneva sources have suggested that selection process could prove fraught given the disparate views of the WTO members the deputy directors-general hail from -- the U.S., China, Germany and Nigeria. The U.S. and China are unlikely to support the other’s deputy and Nigeria has put up its own director-general candidate in Ngozi Okonjo-Iweala. This would leave the European Union deputy director-general as the most likely option, according to Geneva sources, although members have not yet agreed he will be the choice.

But the U.S. and EU also regularly spar at the WTO, particularly over the shape of reform. The U.S. has been highly critical of the EU’s efforts to support an interim appellate mechanism while the Appellate Body is paralyzed. The EU has criticized the U.S. for its blockade of Appellate Body appointments and use of national security tariffs.

WTO reform will take the spotlight at a Senate Finance Committee hearing on Wednesday. The panel will hear from two former Appellate Body members, two former U.S. WTO negotiators, and a fisheries expert. Negotiations on curbing harmful fisheries subsidies are the most high-profile multilateral talks ongoing at the WTO.

The U.S. and EU are also likely to lock horns at a WTO Dispute Settlement Body meeting on Wednesday over a more traditional WTO thorn -- aerospace subsidies. The EU on Friday said it has complied with a WTO ruling that faulted member states’ subsidies to Airbus. This is not the first time the EU has claimed compliance in the case having appealed a second compliance panel ruling to the now non-functioning Appellate Body.

With this round of compliance claims, EU Trade Commissioner Phil Hogan said the U.S. should no longer be imposing “unjustified tariffs” on EU goods. The U.S. has been hitting EU goods with tariffs since the WTO authorized it to do so last October.

The EU’s latest move in the long-running trade dispute mirrors the U.S.’ most recent action in a parallel case the EU brought against subsidies U.S. states have provided to Boeing. The U.S. in May claimed it had complied with a WTO ruling faulting its subsidies to Boeing and U.S. Trade Representative Robert Lighthizer said the EU had no justification for imposing tariffs now that the U.S. was in compliance.

The aerospace subsidies dispute could also come into play in the U.S.-UK free trade negotiations as the UK is subject to U.S. retaliatory tariffs in the Airbus case. The U.S.-UK negotiations are entering their third virtual round this week. British Trade Secretary Liz Truss said after the second round of talks wrapped up that the two sides had progressed to “detailed discussions on text.”

The U.S.’ other effort to strike a comprehensive free trade agreement is not making the same progress as talks with Kenya have reportedly been postponed while the Kenyan negotiating team deals with a COVID-19 outbreak within its office.

Events

  • The U.S. Commercial Services’ Women’s Global Trade Empowerment initiative on Tuesday will host a forum on the U.S.-Mexico-Canada Agreement with Mexican Ambassador to the U.S. Martha Bárcena, Canadian Ambassador to the U.S. Kirsten Hillman, Commerce Department Acting Deputy Undersecretary for International Trade Diane Farrell and Commerce Department Deputy Assistant Secretary for the Western Hemisphere Ian Saunders.
  • The Asia Times will hold a webinar on Tuesday on whether U.S. manufacturing can make a comeback. Information Technology and Innovation Foundation President Robert Atkinson will participate with Asia Times Deputy Editor David Goldman.
  • The Atlantic Council on Tuesday will host a webinar with Singapore Prime Minister Lee Hsien Loong on Asia’s response to U.S.-China tensions and COVID-19. Also participating are David Rubenstein, co-founder and co-executive chairman of the Carlyle Group; Frederick Kempe, president and CEO of the Atlantic Council; and
  • Miyeon Oh, director of the Atlantic Council's Asia security initiative.
  • The Commerce Department’s International Trade Administration will host a teleconference of the president’s Advisory Council on Doing Busines in Africa on Tuesday. The group will discuss and adopt recommendation on the president’s Prosper Africa Initiative.
  • The Washington International Trade Association will host Rep. Darin LaHood (R-IL) for a webinar on Wednesday on U.S.-China trade relations.
  • The Woodrow Wilson Center’s Mexico Institute will host a discussion on Wednesday with current and former ambassadors on a vision for a stronger U.S.-Mexico partnership. Ambassador Bárcena will take part alongside U.S. Ambassador to Mexico Christopher Landau, former Mexican ambassadors to the U.S. Miguel Basanez and Arturo Sarukhan, former U.S. ambassadors to Mexico James Jones and Earl Anthony Wayne, and U.S.-Mexico Foundation Director Enrique Perret and Deputy Director Christopher Wilson.
  • Liam Fox, the former British trade secretary who is running for WTO director-general, will join WITA on Thursday for a discussion on his vision for the WTO.
  • Ambassador Bárcena will also take part in a webinar on Thursday hosted by the Inter-American Dialogue on economic recovery and expanding production in the Americas. Joining Bárcena will be Michelle DiGruttolo, senior managing director at Ankura; Gabrielle Trebat, regional director at McLarty Associates; Edgar Villanueva, co-executive director for the U.S. at the Guatemala Business Council; and Margaret Myers, director of the IAD Asia and Latin America Program.
  • EU Trade Commissioner Phil Hogan will participate in a webinar on Thursday hosted by the Carnegie Endowment for International Peace on “the next global trading system.” Hogan will be joined by former USTR Robert Zoellick and Megan Greene, a senior fellow at Harvard University's Center for Business and Government.
  • Export-Import Bank President Kimberly Reed will join the Center for Strategic and International Studies for a webcast on Friday about the future direction of the bank. -- Brett Fortnam (bfortnam@iwpnews.com)

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