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America is not back at the WTO – POLITICO

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GENEVA – US President Joe Biden said in February that “America is back”, but Geneva is not.

As the most important gathering of the World Trade Organization approaches – the ministerial conference which is usually held every two years – there is great dismay that Washington does not enthusiastically return to multilateral trade, but remains skeptical of the idea of ​​reconnecting with an institution which, according to her, is failing to counter the economic model led by the Chinese state.

The ministerial powwow for the 164 WTO members will run from November 30 to December 3, but there is little hope that the lakeside meetings will save the dying trade body from its cryogenic freeze.

Few diplomatic forums so eagerly awaited the end of the era of US President Donald Trump, who lambasted the WTO for its leniency towards Beijing and ended the world’s first commercial court by vetoing the nomination. of its judges. But Biden is making changes in style rather than substance. His administration is just as obsessed with massive Beijing state subsidies as it is Trump’s, and the WTO Supreme Court is still rudderless because of Washington’s veto.

Admittedly, US Trade Representative Katherine Tai seems more accommodating to the organization than her predecessor Robert Lighthizer. “Let me start by affirming the United States’ continued commitment to the WTO,” she said on a trip to Geneva last month. “The Biden-Harris administration believes that trade – and the WTO – can be a force for good.”

It’s more polite than Trump, who even threatened to remove Washington from the WTO, but his words fell flat with diplomatic delegations in Geneva.

“There were very high expectations as to what she would tell us about a potentially more concrete re-engagement at the WTO,” said a Geneva-based trade diplomat, describing a room full of ambassadors. “But that didn’t happen. It was a big disappointment.”

Pascal Lamy, former Director General of the WTO and former European Commissioner for Trade, echoed this sentiment. “I think what’s been going on for a year or so – at least since [the U.S.] started talking a little bit about business – and what Katherine Tai did was chatter and no walking, “he told POLITICO.” If you look where they’ve moved, until present, no concrete movement. “

As the WTO conference (known as MC12) approaches, the United States has few tangible proactive proposals to brag about, whether in the area of ​​trade and health or reform of the United States. ‘WTO.

Tai told reporters last month that she Twitter announcement in May, Washington’s support for an intellectual property waiver for COVID-19 vaccines was “an exercise in leadership.” But the United States has not presented any concrete text proposals over the past year and remains relatively neutral and cautious in the meetings. What’s more, Washington is also trying to water down a political declaration on trade and health in preparation for the ministerial meeting.

Washington sees red

The Cold War between the United States and China is at the heart of many of the problems behind the attempt to revive multilateralism.

During the WTO’s trade policy review of China last month, Washington lashed out at Beijing, insisting the international trading system is failing to counter China’s unfair practices 20 years after joining the trade body.

“China has used the imprimatur of its WTO membership to become the largest trader in the WTO, while doubling down on its state-led, non-market approach to trade, to the detriment of workers and businesses in the world. United States and other countries, ”said David Bisbee, charge d’affaires at the US mission to the WTO.

Jeffrey Schott, senior researcher at the Peterson Institute for International Economics think tank in Washington, suggested multilateral legal frameworks were failing to keep pace. “There is great concern that the current rules do not cover the types of Chinese practices that cause the most problems.”

But Schott warned that America’s tough tactics were also not an effective response. “The United States using unilateral coercion has been unable to secure any state support for state-owned enterprises in China. The approach taken so far by the Trump and Biden administration has gone nowhere, let’s be honest about it, “he added.

Even the sustainability-focused WTO talks to reduce subsidies that lead to overfishing are now caught up in the larger struggle between the United States and China. In May, Washington proposed new wording for the fisheries negotiations to recognize the link between forced labor and illegal, unreported and unregulated fishing. The shift to an approach targeting “forced labor” is widely seen as an attack on China, which does not want such labor practices included in the trade debate, especially as Beijing tries to dismiss the evidence. increasing repression and forced labor in the Xinjiang region.

“The text which [the Americans] proposed is actually quite innocent, so to speak, so no one can really dispute the content, ”said another Geneva-based diplomat. “The problem is, of course, the systemic angle, and here the Chinese are afraid” that this could set a precedent for further WTO negotiations.

Diplomats and observers read the US decision to call forced labor in illegal fisheries more as a tactic than a substance. “If they really want something substantial on forced labor, it could only happen at the International Labor Organization. The political intentions behind this proposal are therefore clear,” said the first Geneva-based diplomat. “While the substance on vaccines is badly needed and the whole world is clamoring for it, the Americans are silent. But when it comes to forced labor … they stand up.”

The choices the United States makes at the WTO – aggressive towards China and passive on key topics like health or reform – are dictated by national constraints. “Those who think that a trade policy is an international policy are wrong. A trade policy is a domestic policy,” said former WTO chief Lamy.

Although “America First” has not officially been the American mantra since Biden stepped in, “Buy American” and nationalist sentiments continue to wreak havoc on American trade policy. “Many Americans believe that trade liberalization has been unfair,” said Jean-Baptiste Velut, a researcher in American political economy at the Sorbonne Nouvelle University in Paris. There is “a strong nationalist resentment in the United States that Biden cannot ignore,” he added.

The administration is unwilling to burn its political capital in Congress on trade and WTO reform at a time when Biden is focused on the fight against China and its historic Build Back Better legislation. “Short-term domestic policy constraints in the United States affect the actions the United States is prepared to take [at the WTO]”said Schott.

Happy with the status quo

Countries, business groups and experts are worried about the lack of momentum in the United States before MC12.

Tai remained evasive in her Geneva speech, telling reporters: “What I will feel as a success is that the day after MC12 concludes, I feel hope and motivation to continue the work we are doing. at the WTO… If there are a few trophies and badges that we have from work at MC12, so much the better. “

EU Ambassador to the WTO João Aguiar Machado said last month that “so far we have not seen any engagement” on the dispute settlement tribunal that states- United froze. “It may well be that the new administration is still thinking about what kind of reforms it wants, [but] there has been no proposal made by the United States, and there has been no discussion since the system became crippled in December 2019. ”

Clete Willems, a former White House trade official under the Trump administration who now works for the Akin Gump law firm, said he believes Washington is proactive in the talks and talks about the fishery. intellectual property rights for vaccines, but wants the United States to take more of the lead on the trade and health declaration and on WTO reform. “It is in the interests of the United States to actually start making proposals” on reforming the institution, Willems said. Now, American business groups are also calling for “urgent American leadership” before MC12.

“The feeling here in Geneva is that there is an expectation of a more strategic positioning of the United States. the Appellate Body, which gives them a wide margin of maneuver in trade policy. It is quite clear that they are not ready to give up this impunity at the WTO, ”said the first Geneva-based trade diplomat.

US trade officials reject the premise that there is a lack of US leadership and dynamism at the WTO. “We are deeply engaged, and I can’t think of a member who is more engaged than the United States in the whole organization,” said an official from the Office of the United States Trade Representative (USTR). Another USTR official added: “We have a lot of proposals and we are active on all the sites. So I don’t know how someone who cares about it could say that we are not in the lead and that we are we are not in the lead when it comes to problems. ”

On reforming the institution, officials said Washington is moving cautiously. “We need a serious conversation about reform, not a stuck conversation in a month or two,” the second USTR official said. “We take a much longer term view. Ambassador Tai has said time and again that the important thing is that we have a functioning WTO to return to in January to start serious work.”

They declined to say whether the United States would support a commitment to WTO reform in a ministerial statement. “Certainly, that this sentence [on reform] is used or not, we are committed to fixing that organization and making it relevant, ”the USTR senior official said.

Doug Palmer and Barbara Moens contributed reporting.

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