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GENEVA / BRUSSELS: The World Trade Organization found on Tuesday that the United States violated world trade rules by imposing multi-million dollar tariffs in President Donald Trump’s trade war with China, a ruling that drew the ire of Washington.
The Trump administration says its tariffs imposed two years ago on more than $ 200 billion worth of Chinese goods were justified because China was stealing intellectual property and forcing American companies to transfer technology to access Chinese markets.
But the three-member WTO panel said the US tariffs violated trade rules because they applied only to China and were above the maximum rates agreed by the United States. Washington had not then adequately explained why its measures were a justified exception, the panel concluded.
“This panel report confirms what the Trump administration has been saying for four years: The WTO is completely inadequate to stop China’s harmful technology practices,” US Trade Representative Robert Lighthizer said in response (pictured below) .
China’s Commerce Ministry said Beijing supports the multilateral trading system and abides by WTO rules and resolutions, and hopes Washington will do the same.
The decision will have little immediate effect on US tariffs. And it is just the beginning of a legal process that could take years to unfold, ultimately leading the WTO to pass retaliatory measures if it is sustained – moves that China has already taken it on its own. .
The United States is likely to appeal Tuesday’s ruling. However, that would leave the case in a loophole, because Washington has already blocked the appointment of judges to the WTO appeals body, preventing it from convening the minimum number required to hear cases.
The WTO panel was aware that it was getting into trouble. He noted that he had only examined US measures and not retaliation from China, which Washington has not challenged in the WTO.
“The panel is well aware of the broader context in which the WTO system currently operates, reflecting an unprecedented range of global trade tensions,” the 66-page report concluded.
‘DO INVENTORY’
The panel recommended that the United States bring its measures “in conformity with its obligations”, but also encouraged the two parties to work to resolve the overall dispute.
“Time is available for the parties to take stock as procedures evolve and consider more opportunities for mutually agreed and satisfactory solutions,” he said.
During a two-year trade war with Beijing, Trump threatened to slap tariffs on nearly all Chinese imports, more than $ 500 billion, before the two countries signed a “Phase 1” trade deal in January. Additional duties still apply to about $ 370 billion worth of Chinese goods, and $ 62.16 billion in tariffs have been collected since July 2018, data from US Customs. Https://www.cbp.gov / newsroom / stats / trade show.
Trump has described the WTO as “horrible” and biased towards China, often threatening to resign.
Leaving the White House for a campaign rally, Trump said that he “would have to do something about the WTO because they have let China get away with it.”
He said he needed to take a closer look at the ruling, but added: “I’m not a big fan of the WTO, I can tell you that right now. Maybe they did us a big favor.”
The decision could help drive Trump’s decision to leave the WTO or support the United States’ arguments to reform the 25-year-old trade body, said Margaret Cekuta, a former USTR official who helped write a crucial report on property abuses. intellectual property in China that preceded Trump’s tariffs. .
“It gives the administration ammunition to say that the WTO is outdated. If they cannot rule on intellectual property rights, what is their position in the broader economy going forward?” said Cekuta, now director of the lobbying firm Capitol Counsel.
Trump, a critic of multilateral institutions, has already left the UN cultural organization UNESCO and plans to leave the World Health Organization.
– Reuters
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