WTO's dispute resolution mechanism may resume as Biden enters White House: expert

By Ma Jingjing Source: Global Times Published: 2020/12/2 18:03:40

Photo taken on July 15, 2020 shows an exterior view of the World Trade Organization (WTO) headquarters in Geneva, Switzerland. (Photo by Li Ye/Xinhua)


The WTO, along with its crucial Appellate Body, is expected to resume its functioning as US President-elect Joe Biden enters the White House, given his multilateralist inclination and the fact that supporting the dispute resolution mechanism benefits the US, experts said.

"The change in the US political arena is an important factor for the destiny of the WTO," said Tu Xinquan, president of the China Institute for WTO Studies at the University of International Business and Economics.

The Trump administration is to blame for the current crisis of the WTO since President Donald Trump has railed against the WTO for years, with its opposition to the candidacy of former Nigerian finance minister Ngozi Okonjo-Iweala as next WTO chief the latest obstruction, experts noted.

As an important part of the dispute settlement system of the WTO, the Appellate Body is a standing body of seven persons that hears appeals from reports issued by panels in disputes brought by WTO members. 

But in December 2019, this body went into crisis mode because of the Trump-led US authority's blocking appointments of new judges, leaving pending appeals in limbo and threatening the resolution of future trade conflicts.

Unlike Trump's obstruction, Biden may play a more significant role in boosting the revival of the WTO and could engage in constructive talks for a feasible solution on thorny issues such as the suspension of the Appellate Body, He Weiwen, a former senior trade official and a senior fellow of the Chongyang Institute for Financial Studies at the Renmin University of China, told the Global Times.

"Unlike Trump, who believes that the WTO should not exist, Biden supports globalization and he needs allies including Europe, Africa and Japan," Tu said. "Although Biden's choices remain to be seen, he has no reason to object to Okonjo-Iweala's candidacy," he said, noting that whoever the next WTO chief is has no impact on the US.

Meanwhile, the constraining force of the Appellate Body is flexible, especially for countries like the US. "If the US doesn't implement a ruling of the WTO, other members can't do much to confront it," Tu said. He said the WTO allowed retaliation about 21 times as of 2018, 15 of which targeted the US, but the US refused to implement the rulings.

Following the announcement of Biden's picks for his economic team - especially the formal nomination of former Federal Reserve Chair Janet Yellen as Treasury secretary, who supports open trade and globalization - the world has high hopes that Biden to reverse Trump's protectionism and erratic tariffs imposed on other countries.

However, Tu said that Biden's team may not make big changes in trade policies over the next four years, given the split between the Democrat and Republican parties.

As for the China-US trade war, Biden will not immediately revoke existing tariffs on Chinese goods but he will probably waive the tariffs on certain products from China for the benefit of US companies and consumers, he said.

Posted in: ECONOMY,BIZ FOCUS

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