Notification and Transparency Issues in the WTO and the US’ November 2018 Communication
By Aileen Kwa and Peter Lunenborg
Various WTO Members submitted a Communication to the WTO in November 2018 which, if accepted, would affect the implementation of Members’ transparency and notification obligations at the WTO. It would strengthen the already burdensome notification obligations and introduce new punitive administrative measures should obligations not be complied with. This paper provides information about WTO Members’ current notification obligations and their level of compliance; looks at the history of discussions on notifications, particularly in the Working Group on Notification Obligations and Procedures which took place in 1995 – 1996; and provides an analysis of the Communication. The analysis focuses on the extent to which the elements are consistent with or go beyond the current WTO disciplines. It concludes that non-compliance with notification obligations is real. However, rather than expanding obligations and introducing punitive measures, constructive and effective solutions should be based on nuancing of obligations in the context of a Special and Differential Treatment approach and through the use of incentives. It also acknowledges that countries with a chronic lack of capacities will continue to struggle with the WTO’s complex notification obligations and requirements until they attain higher levels of development and, thus, improved institutional capacities.
Why the US Proposals on Development will Affect all Developing Countries and Undermine WTO
By Aileen Kwa and Peter Lunenborg
US submitted two highly problematic proposals to the WTO in January and February 2019, undermining the place of Special and Differential Treatment (S&D) for developing countries at the WTO. In the first paper (WT/GC/757), US criticises the practice of self-declared development status by developing countries arguing that the North-South construct no longer makes sense due to “great development strides”. The second paper (WT/GC/764) – a proposed Decision for the General Council – provides a way to operationalise what was in the first paper. It gave criteria that would exclude 34 Members or 53.6 percent of global population from S&D treatment in “current and future WTO negotiations”. This fundamentally changes S&D from an unconditional right for all developing countries to a concession that may or may not be provided. Even for those developing countries that are not part of the 34 excluded Members, the US notes that in sector-specific negotiations, other Members could also be “ineligible for special and differential treatment.” This paper critiques the US approach on Special and Differential Treatment and concludes that these papers by the US cannot be the basis for any further discussions. All developing countries must be able to decide the pace of their adjustment to trade rules.
Last week’s action by President Donald Trump has ended the United States’ leadership on liberal trade and may trigger a global trade war with major damaging consequences. On 8 March, Trump signed a proclamation to raise tariffs of steel by 25% and aluminium by 10%. It sent shockwaves across the world not only because of the losses to metal exporters, but due to what it could well signify: the start of a global trade war causing economic disruption in many countries, and that may also damage if not destroy the multilateral trade system. (more…)
The Trump tax reform plan is likely to negatively affect developing countries
By Yuefen LI
The Trump administration has proposed a tax reform framework to the US Congress. Major components are a large reduction in the corporate tax rate, changes to the way US profits currently earned abroad are taxed, and how past profits parked abroad are treated if brought home. All these reforms if accepted by Congress, will most likely have adverse effects for developing countries, including by increasing capital flows from and reducing FDI to them. (more…)
By withdrawing the United States from the Paris Agreement, President Donald Trump abdicated not only leadership but membership of the community of nations cooperating to tackle climate change, the most serious crisis facing humanity. (more…)
Global climate policy in an uncertain state of flux
By Martin Khor
Global climate change policy is in a state of flux, with all other countries waiting for the United States to decide whether to leave or remain in the Paris Agreement. That treaty, adopted by 195 countries with great fanfare in December 2015 and came into force in November 2016, symbolizes the efforts of governments to cooperate to avert disastrous global warming that threatens human survival. (more…)
Trump’s first 100 days: a serious cause for concern
By Martin Khor
This week, Donald Trump will mark his first hundred days as US President. It’s time to assess his impact on the world, especially the developing countries. It’s too early to form firm conclusions. But much of what we have seen so far is of serious concern. (more…)
The planned US border tax would most likely violate WTO rules
By Martin Khor
As the US Congress and President consider whether to introduce a border adjustment tax, a major question is whether such a measure will violate the rules of the World Trade Organization. Experts have good reason to believe the tax in several ways go counter to the WTO. But there are also shortcomings in the WTO system that could limit its usefulness in stopping the US if it is determined enough. A shorter version of this article was published by the IPS. This is the second of a two part series on the US border tax plan. (more…)
Beware of the new US protectionist plan, the border adjustment tax
By Martin Khor
A new protectionist device is being planned in the United States that could devastate the exports of developing countries and cause American and other foreign companies to relocate. The complexities and implications of the proposed border adjustment tax are explained in this article. A version of this article was published by IPS. A second article on this issue will be published soon. (more…)
Shocks for developing countries from President Trump’s first days
By Martin Khor
His first days in office indicate that President Donald Trump intends to implement what he promised, with serious consequences for the future of the United Nations, trade, the environment and international cooperation, and developing countries will be most affected. Those who hoped Trump would be more statesman-like in style and middle-of-the-road in policy matters after his inauguration had their illusions dashed when the new United States President moved straight into action to fulfil his election pledges. (more…)
