Sputnik — WTO Allows China to Impose Retaliatory Measures Worth $3.6 Bln Against US

This comes amid US President Trump's announcement that the signing site of the 'phase one' trade deal with China would be announced 'soon'.

A World Trade Organization’s arbitrator ruled Friday that China could impose $3.6 billion worth of tariffs on US goods over its unfair anti-dumping practices.

"We determine that the level of nullification or impairment of benefits accruing to China as a result of the WTO-inconsistent methodologies used by the United States in anti-dumping proceedings concerning products imported from China is 3,579.128 million USD per annum," the ruling read.

The latest announcement by the WTO focuses on a case dating back long before the current trade dispute. It has to do with a complaint filed by China almost six years ago when it sought more than $7 billion in retaliation. Under this ruling, China can introduce higher tariffs against the US than is currently allowed in accordance with WTO rules. Beijing will also be able to choose which US products and sectors to target....

Sputnik International
WTO Allows China to Impose Retaliatory Measures Worth $3.6 Bln Against US

Jakob Hanke — EU and China break ultimate trade taboo to hit back at Trump

Brussels and Beijing on Wednesday launched explosive cases at the World Trade Organization, in which they will argue that Trump’s tariffs on steel and aluminum, imposed in May, cannot be justified on grounds of national security, as the White House claims. The EU and China were joined in their protest by Mexico, Norway, Russia and Canada.

The six-fold attack on Trump is a landmark departure from the orthodoxy of trade diplomacy as countries have traditionally shied away from challenging restrictions justified by national security concerns, for fear that such a case could blow up the entire global trading system.

Whichever way the WTO rules, Pandora’s box has been opened. If it rules that national security can justify tariffs, the decision could inspire other countries to play the security card. On the other hand, if Washington finds itself backed into a corner, it could simply quit the WTO.…

More unraveling.

Washington is now openly weaponizing trade, finance, and economics in the attempt to maintain and extend US hegemony.

Not going down so well.

Politico
EU and China break ultimate trade taboo to hit back at Trump

Jakob Hanke

Pence Vs. Xi at APEC — Trump decides to skip

Is accusing China of using debt as a weapon capitalist chutzpah on the part of Pence, when it's SOP under neoliberalism — "free markets, free trade, and free capital flows" — to put less powerful countries in debt to powerful countries to the degree that they need to go to the IMF for funding to meet debt obligations, the strings attached being giving up control of their institutional arrangements, fiscal policy and national sovereignty? 

I doubt Pence will fool anyone on this, but some countries will "go along to get along" with the US.

Reuters

China says no developing country will fall into debt trap by cooperating with China

For the Chinese idiom, see

Language Log
"China has no intention to touch the cheese of any country"
Victor Mair

See also

Yahoo!
APEC leaders divided after US, China spat
Ayee Macaraig, Andrew BEATTY | AFP

See also

The Week
Pence vows more trade war 'until China changes its ways'

Bonnie Kristian

See also

Sputnik International
Asia-Pacific Economic Cooperation Summit Reveals Depth of US-China Division

See also

"We suggest a certain country matches its words with its deeds, rather than wag the finger at others," [Chinese Foreign Ministry Spokesperson Hua Chunying] said in the statement. "The country should treat all countries on an equal footing no matter big or small, respect other countries' right of following a development path that accords with their own national conditions and make real contributions to developing countries."
Ecns
China urges U.S. to stop wagging finger at others

Xinhua

See also

Full text of Xi's remarks at 26th APEC Economic Leaders' Meeting

Ecns
Xi calls for inclusive, rule-based world economy at APEC meeting

Xinhua

Also

Zero Hedge
"It Will Be A Cold War": APEC Summit Ends In Unprecedented Chaos After Dramatic US-China Showdown

Tyler Durden

also

SouthFront
US-Chinese Trade War Is To Escalate Further As Both Sides Are Not Going To Make Concessions

also

Reuters
APEC fails to reach consensus as U.S.-China divide deepens

also

Sputnik International
APEC Participants Adopt Final Declaration Excluding Some Controversial Issues
Related

Eisenhower's worst nightmare has come true, as defense mega-contractors climb into the cockpit to ensure we stay overextended....

The dependence on the private sector in the Pentagon and the intelligence community had reached such a point that it raised a serious question about whether the workforce was now “obligated to shareholders rather than to the public interest,” as Priest and Arkin reported. And both Gates and Panetta acknowledged to them their concerns about that issue.

Powerfully reinforcing that privatization effect was the familiar revolving door between the Pentagon and arms contractors, which had begun turning with greater rapidity. A 2010 Boston Globe investigation showed that the percentage of three- and four-star generals who left the Pentagon to take jobs as consultants or executives with defense contractors, which was already at 45 percent in 1993, had climbed to 80 percent by 2005—an 83 percent increase in 12 years.... 

Longish historical article putting things in perspective.

The American Conservative
America’s Permanent-War Complex

Gareth Porter

See also

Did "we" get our money's worth? It all depends on the meaning of "we."

Military Times
Price tag of the ‘war on terror’ will top $6 trillion soon
Leo Shane III

Frank Sellers — SHOCKER: US sides with Moscow over Kiev in WTO case

Typically, Washington is against anything that benefits Moscow, and is for anything which bolsters the position of US puppet regime Ukraine. But, at ongoing cases before the World Trade Organization, that narrative isn’t applicable. This is so because if Washington slam Moscow for its actions relative to Kiev, it would provide a case against Trump’s metals tariffs. However, by standing with Russia on this issue, Washington thinks that it can save its own trade actions, namely Trump’s metals tariffs.…

National security trumps WTO regs. Both the US and Russia are claiming national security supervenes in their cases, and the US is supporting Russia on this.

In effect, this is the recognition that the national sovereignty supersedes international agreements in certain cases. The nation state is not dead yet.
The Duran
SHOCKER: US sides with Moscow over Kiev in WTO case

Frank Sellers

TASS — Russia to notify WTO of plans for retaliation against US for steel, aluminum duties

The United States has refused to hold consultations with Russia on the WTO platform over the introduction of restrictions on steel and aluminum import, saying such measures were not special protectionist ones, the Ministry of Economic Development told TASS on Friday. With this in mind Russia is going to notify the WTO of its intention to take retaliatory measures to limit the import of steel and aluminum.

"In response to Russia’s request for consultations the United States said that it did not regard its restrictions as special protectionist ones and was unprepared for consultations with Russia within the framework of WTO procedures on special protectionist measures. All other WTO members that had requested such consultations received the same reply," the ministry told TASS.

"In this connection we plan to notify the WTO Council on Trade in Goods of our intention to take such steps. Thirty days after such notification Russia will have the right to take retaliatory measures proportionate to the damage from US restrictions on the Russian export of steel and aluminum," the ministry said....

Following the rules.

TASS
Russia to notify WTO of plans for retaliation against US for steel, aluminum duties

Reuters — Trump administration says U.S. mistakenly backed China WTO accession in 2001

The United States mistakenly supported China’s membership of the World Trade Organization in 2001 on terms that have failed to force Beijing to open its economy, the Trump administration said on Friday as it prepares to clamp down on Chinese trade.

“It seems clear that the United States erred in supporting China’s entry into the WTO on terms that have proven to be ineffective in securing China’s embrace of an open, market-orientated trade regime,” the administration said in an annual report to Congress on China’s compliance with WTO commitments.

“It is now clear that the WTO rules are not sufficient to constrain China’s market-distorting behavior,” the report said.... 

The report also points at Russia’s behavior, saying Moscow had no intention of complying with its WTO obligations, a trend the administration said was “very troubling.”

Getting ready to ramp up economic warfare.

Reuters
Trump administration says U.S. mistakenly backed China WTO accession in 2001

Lesley Wroughton

See also

The Communist party believes that, "Russia has obtained no preferences, benefits or even stimuli for economic development" as a result of its WTO membership.

TASS
Communist party again prepares bill on Russia's exit from WTO

Sergey Gladys — US Accused of Undermining the World Trade Organization

Members of the WTO, including Brazil, Japan, and the EU, raise red flags as the United States intervenes in the work of the global trade court.

The Duran

US Accused of Undermining the World Trade Organization

Sergey Gladysh

Dani Rodrik — Fairness and Free Trade

Dani Rodrik doesn't mention Trump, but Trump is out front regarding this. Rodrik summarizes the issues.

Project Syndicate
Fairness and Free Trade
Dani Rodrik | Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government

Alex Kirby — The United States Has Blocked a Plan by India to Expand Solar Power and Create Local Jobs

Because "free trade."

India has been told that it cannot go ahead as planned with its ambitious plan for a huge expansion of its renewable energy sector, because it seeks to provide work for Indian people. The case against India was brought by the US.

The ruling, by the World Trade Organisation (WTO), says India’s National Solar Mission—which would create local jobs, while bringing electricity to millions of people—must be changed because it includes a domestic content clause requiring part of the solar cells to be produced nationally.

What a difference two months make. On 12 December last year, US President Barack Obama praised the Paris Agreement on tackling climate change, just hours after it was finally concluded. “We’ve shown what’s possible when the world stands as one,” he said, adding that the agreement “represents the best chance we have to save the one planet that we’ve got”.

The WTO says that its dispute settlement panel “handed the US a clear-cut victory . . . when it found that local content requirements India imposed on private solar power producers in a massive solar project violated trade rules, although the two sides are still discussing a potential settlement to the dispute”.

One official of India’s Ministry of New and Renewable Energy told India Climate Dialogue that the ruling might make the country’s solar plan more expensive, and would definitely hit domestic manufacturing and, consequently, the possibility of creating jobs in the sector.

That's not all:

“In the last three months alone, Ecuador was ordered to pay $1billion for cancelling a petrol contract under a Bilateral Investment Treaty . . . Governments must be free to implement sound climate policy.

“This ruling shows the dangers posed by more wide-ranging trade agreements such as the Trans-Pacific Partnership (TPP), Trade in Services Agreement (TiSA) and Transatlantic Trade and Investment Partnership (TTIP), which will liberalise trade in dirty fossil fuels and restrict government options even further.”

Truthdig
The United States Has Blocked a Plan by India to Expand Solar Power and Create Local Jobs
Alex Kirby | Climate News Network

Biraj Patnaik and Timothy A. Wise — Don’t Buy the Spin

Timothy A. Wise and Biraj Patnaik analyze the outcome and implications of World Trade Organization’s Nairobi summit for India’s Scroll media outlet. See Wise’s previous analyses of the Nairobi WTO meeting.…

While the claims of Doha death are, as Mark Twain might have said, premature, there is no doubt the development agenda has been undermined. Developing countries got very little in Nairobi, official press releases aside, and they are likely to get even less in a future characterised by Southern incoherence and Northern dominance. 

TripleCrisis
Don’t Buy the Spin
Biraj Patnaik, Principal Adviser to the Commissioners of the Supreme Court in the Right to Food case, and Timothy A. Wise, researcher at Tufts University

Public Citizen — WTO Authorizes Over $1 Billion in Sanctions Unless U.S. Guts Popular Country-of-Origin Meat Labels, Disproving Obama Claim That Trade Pacts Can’t Undermine Public Interest Policies

Today’s World Trade Organization (WTO) ruling against the U.S. country-of-origin meat labels (COOL) that consumers rely on to make informed choices about their food provides a glaring example of how trade agreements can undermine U.S. public interest policies, Public Citizen said today. How the Obama administration responds to the WTO ruling will have a significant impact on its efforts to build congressional and public support for the controversial Trans-Pacific Partnership (TPP).

Common Dreams
WTO Authorizes Over $1 Billion in Sanctions Unless U.S. Guts Popular Country-of-Origin Meat Labels, Disproving Obama Claim That Trade Pacts Can’t Undermine Public Interest Policies

Public Citizen

Economy Watch — WTO Rules against US Dolphin Saving Measures as a Barrier to Global Trade

A seemingly small thing like this can have wide-reaching social and political repercussions. There are a lot of people in the US that going to be upset about this ruling. It's another chink in the armor of neoliberalism.

Economy Watch
WTO Rules against US Dolphin Saving Measures as a Barrier to Global Trade

Tom Miles — China warns WTO its cheap exports will soon be harder to resist

China has served notice to World Trade Organization members including the European Union and United States that complaints about its cheap exports will need to meet a higher standard from December 2016, a Beijing envoy said at a WTO meeting.

Ever since it joined the WTO in 2001, China has frequently attracted complaints that its exports are being "dumped", or sold at unfairly cheap prices on foreign markets. Under world trade rules, importing countries can slap punitive tariffs on goods that are suspected of being dumped.… 

Reuters
China warns WTO its cheap exports will soon be harder to resist
Tom Miles

Also

Unplanned inventory building up.

Nandita Bose and Sruthi Ramakrishnan, Macy's cuts full-year forecast, sends shivers through retail

Not affecting China. This is one firm on one day.

Paul Carsten and Lehar Maan, Alibaba's Singles' Day sales surge 60 percent to $14.3 billion

China is also crashing the US ecommerce direct sales market through Ali Express.

Nadia Prupis — At Washington’s Insistence, WTO Rules Against India’s Push for Clean Energy

The World Trade Organization (WTO) on Wednesday ruled against India over its national solar energy program in a case brought by the U.S. government, sparking outrage from labor and environmental advocates.

As power demands grow in India, the country’s government put forth a plan to create 100,000 megawatts of energy from solar cells and modules, and included incentives to domestic manufacturers to use locally-developed equipment. 

According to Indian news outlets, the WTO ruled that India had discriminated against American manufacturers by providing such incentives, which violates global trade rules, and struck down those policies—siding with the U.S. government in a case that the Sierra Club said demonstrates the environmentally and economically destructive power of pro-corporate deals like the Trans-Pacific Partnership (TPP).…

I'm waiting for when US meat exporters sue India for prohibiting the exportation of beef. Oh, and when dope is legalized in the US, the US dope industry, which will no doubt be Big Pharm, will be suing countries that ban it. The US porn industry will also have a field day suing for damages from market exclusion. Big bucks there.

Raging Bull-Shit
At Washington’s Insistence, WTO Rules Against India’s Push for Clean Energy
Nadia Prupis, Common Dreams

Ha-Joon Chang on Free Trade, Free Market, True Story of Capitalism

Five years ago Ha-Joon Chang, a famous economist from South Korea, teaching at University of Сambridge, delivered a lecture on the real history of trade and capitalism for the New America Foundation where he is criticizing the official history of economy, claiming, that USA and Europe became strong not through protectionist measures, but through the market . He is also revealing the "level playing field"-argument, used by WTO and IMF to delegitimize protectionist measures in the eyes of developing countries. Ha-Joon Chang is telling, that despite a lot of arguments, speaking against the neoliberal recipes of IMF, World Bank and WTO, these institutions are inventing new explanations, however every time their policies do not work and they don't want to acknowledge that their theory doesn't not work: "the countries are wrong, not the theory".

Ha-Joon Chang on Free Trade, Free Market, True Story of CapitalismHa-Joon Chang | Reader in the Political Economy of Development at the University of Cambridge

Pomoŝ’ Rabkoru — Russia should withdraw from WTO in response to new sanctions

J.Hawk’s Comment: Dzarasov is correct in arguing WTO is harmful to Russia in the sense that its tariff regulations prevent Russia from rebuilding its manufacturing base. Being in the WTO makes sense if Russia is happy to limit itself to being a supplier of natural resources to the rest of the global economy. That would be the niche Russia would be limited to if it relied on the “invisible hand of the market”, in keeping with the neoliberal economic dogma that is still dominant in the West and which has its adherents in Russia. However, the sanctions have had the paradoxical effect of weakening the neoliberal faction in Russia, and have accelerated the adoption of an import substitution strategy aimed at rejuvenating Russia’s domestic manufacturing. Exiting the WTO would only be a logical step in this process. It would also be a major blow to any country or corporation which is counting on the Russian market, unless their manufacturing operations are actually located in Russia.

Fort Russ
Russia should withdraw from WTO in response to new sanctions

Pomoŝ’ Rabkoru

Translated by J. Hawk

Original in Russian.

Kenneth Thomas — EU goes to WTO over Boeing subsidies

Just as I predicted, the European Union has filed a World Trade Organization complaint against Boeing's new round of subsidies from Washington state totaling $8.7 billion from 2025 to 2040 (h/t @ThomasCafcas). I'll go out on a limb and predict that the EU will win this case. 

Okay, that's not really out on a limb: The WTO found that Boeing's last round of state and local subsidies violates its Agreement on Subsidies and Countervailing Measures, and the facts are exactly the same -- except for the fact that the subsidies have grown from $160 million a year to $543 million a year, more than three times as much. This case is a slam-dunk

Of course, after it loses, it's not like Washington state will comply with the ruling. It's not complying with the last ruling. But it gives us an opportunity to remember that Boeing embodies everything that's wrong with corporate America....

Middle Class Political Economist
EU goes to WTO over Boeing subsidies
Kenneth Thomas | Professor of Political Science at the University of Missouri-St. Louis

ITAR-TASS — Russia has no plans to punish West with retaliatory sanctions — Putin

Putin announces that Russia will institute a policy of trade protectionism to further its own interests rather than retaliatory sanctions to hurt the EU, since the West has violated the principles of free trade  and sanctity of contract.

Russia will not pressure the West with sanctions but will pursue its own interests, President Vladimir Putin said on Thursday. 

The introduction of protective measures is not caused by the striving to punish our partners, Putin said. "First of all, we are thinking about our own interests and development goals," he added. 

Putin believes that the Western countries that adopted sanctions against Russia in fact defied the principles of the World Trade Organization (WTO). 

“The sanctions imposed on Russia are nothing but a departure from the basic WTO principles by some of our partners,” Putin said at a meeting of the State Council on Thursday. “They violate the principle of all countries’ equal access to the markets of goods and services. They ignore the most favored nation status in trade and the principle of fair and free competition.”

ITAR-TASS
Russia has no plans to punish West with retaliatory sanctions — Putin

See also Reuters, Russia's Putin says sanctions violate principles of WTO

Countries enforcing trade sanctions do not have to justify them at the WTO unless they are challenged in a trade dispute. Justifications for restricting trade can range from environmental and health reasons to religious scruples. 

But some diplomats fear that wide-ranging sanctions against Russia could only be explained by national security concerns. That would be a legitimate argument, but one that has never been invoked in a WTO dispute and could unravel mutual trust.

Capitalism with strings.

Richard Baldwin, Masahiro Kawai, Ganeshan Wignaraja — Future of the world trading system: Asian perspectives

The WTO risks losing its centricity in the world trading system due to its focus on 20th century trade issues and lack of progress in the Doha Round. This column introduces a new eBook that looks at how Asia meanwhile built a deep network of supply chains and is experimenting with new forms of regional trade governance. Asia’s experience of open trade-led development offers lessons for other regions. Better coherence is also vital between Asia’s regional trade rules and global trade governance.

VOX
Future of the world trading system: Asian perspectives
Richard Baldwin, Professor of International Economics, Graduate Institute, Geneva; CEPR Policy Director, and VoxEU.org Editor-in-Chief; Masahiro Kawai, Dean of the Asian Development Bank Institute and Ganeshan Wignaraja, Director of Research of the Asian Development Bank Institute (ADBI)

The Western model breaking down?

Vinod K. Aggarwal and Simon J. Evenett — The Sad Truth Behind Growing Clashes at the WTO

What we've seen instead [of tariffs and other forms of protectionism] is selective subsidization—a more direct response to the fact that, at the onset of a crisis, firms need cash more than they need customers. Indeed, so many governments implemented subsidies (thereby delaying reductions in capacity and employment in many sectors and thus distorting trade flows) that we saw the perverse effect for a while that no one brought cases to the WTO. As the saying goes, people who live in glass houses mustn't throw stones.

The governments behind these subsidies weren't only interested in stabilizing their firms. They were also interested in restoring economic growth. In addition to across-the-board monetary and fiscal policy measures, many of them targeted specific sectors and even specific firms as growth poles. This amounts to a revival of the industrial policy that has been pooh-poohed for decades in the US, the UK, and much of the English-speaking world.

Now, disputes have arisen over these crisis-era state efforts at industrial policy, particularly in auto parts, wind power, and solar panels—and also over some pre-crisis industrial policy initiatives, such as those relating to biofuels. But do these formal objections reveal only the tip of the iceberg?....

Here's the bottom line for managers: don't count on WTO rules to protect your interests. It is clear that, during the crisis era, policy choice has sought to circumvent the stricter WTO rules. Because so much of this favoritism has taken the form of various subsidies rather than import-reducing measures such as tariffs and antidumping measures, governments have felt they did not have to change their rhetoric. Publicly, they can claim to maintain "open borders" to commerce even as they aggressively shift the odds in favor of a select few.

Don't be misled by the avowed rejections of protectionism. Just because tariffs aren't being raised across the board, it doesn't mean firms' overseas commercial interests are being treated without prejudice. Policymakers' commitment to the level playing field has been tested during the crisis era and found wanting—and managers must now live with the consequences.

The Harvard Business Review | HBR Blog Network
The Sad Truth Behind Growing Clashes at the WTO
Vinod K. Aggarwal and Simon J. Evenett