New EU proposal responds to WTO “stop”

“Even if there is no WTO, trade sanctions must be implemented!” German Business News reported on the 12th that the new EU Trade Commissioner Hogan announced on the same day that the EU will adjust the EU’s laws to implement international business rules in response to the World Trade Organization ( Possible consequences of the WTO’s operating mechanism being blocked by the United States.

EU needs to “start first”

Under Hogan’s proposal, the new legal rules will allow the EU to impose sanctions on “states that illegally restrict trade while blocking WTO dispute settlement procedures.” The current law states that the EU cannot respond to a dispute until all WTO procedures have been passed. Under the new proposal, the EU can take action even if the appeal is still pending. Hogan believes that the EU “cannot be without defense” before the WTO system is restored. “The proposal presented today will help us defend our interests in times of difficult international trade,” commented European Commission President Vondelion. The EU must be able to ensure that its trading partners meet their obligations when much work is at stake.

Agence France-Presse said Hogan’s proposal now needs to be approved by the Council of Ministers of the European Union and the European Parliament, a process that will continue until next year. No major resistance is expected. At the EU summit on the 12th and 13th, EU leaders will ask lawmakers to consider this proposal as a priority.

“This proposal is aimed at the Trump administration.” Germany’s “Economic Weekly” pointed out that Brussels’s choice at this time was not an accident. Under the obstruction of the United States, the WTO dispute settlement mechanism has been officially suspended since December 11 due to the insufficient number of judges in the appellate body. The “paralysis” of the appellate body will result in the final decision of the appeal case not being possible, and the consequence may be the return of international trade to the “law of forests” era.

Brexit pressure is greater

The British “Guardian” reported on the 11th that due to the intention of the US government to close the WTO Appellate Body, the United Kingdom is at risk, that is, after a nearly one-year transitional period from the European Union, its trade relations with the European Union may be completely left to the EU At the mercy of.

The report said that the British Prime Minister Johnson stated that he would not extend the 11-month Brexit transition period, hoping to reach a comprehensive free trade agreement with the EU during this extended period. However, if the UK and the EU do not complete consultations during the transition period, from January 1, 2021, the UK-Europe trade will all operate in accordance with WTO rules. If the EU establishes trade barriers against the UK after the transition period, the UK will not be able to resort to any law.

CBI, a Brussels-based think tank, said the “shutdown” of the WTO appeals system would make global trade “like a football game without a referee.” Britain ’s lack of a post-Brexit free trade agreement will make the country ’s economy more fragile and even fall into a “legal vacancy” in the field of trade.

In order to resolve economic disputes in member states, the WTO has set up a dispute settlement agency, which is the WTO’s “crown jewel.” Since 1995, the WTO has resolved more than 600 disputes.

Aiming directly at the United States

The European Union’s move is aimed at Trump’s “U.S. priority” policy and protectionist actions undermining a rules-based global order. Hogan said that this is a critical moment for multilateralism and the global trading system. The EU will continue to vigorously advocate the multilateral world trading system and insist on establishing a WTO with an effective dispute settlement mechanism.

Over the past three years, the EU has repeatedly been provoked by Trump’s actions. The United States has imposed tariffs on EU steel and aluminum on the grounds of controversial national security. The United States has also threatened to impose similar tariffs on foreign cars and plans to increase tariffs on French goods as a retaliation for French digital taxes. In addition, Trump plans to restrict EU-Iran trade activities after the United States withdraws from the Iran nuclear deal.

Deutsche News Agency said that the EU will also cooperate with China and other countries and regions in countering the US blockade. Peckmans, a trade expert at the Brussels-based CEPS think tank, believes that the EU may be more cautious in deploying new sanctions tools. In extreme cases, the EU may wish to choose to use it.