A proposal offered by European Commission Chairman Ursula von Der Leyen and German Chancellor Frederick Merz has attracted a lot of attention.
Speaking at the end of a peak of European Union leaders at Brussels on 27 June, he carried forward the European Union’s idea to make an option of the World Trade Organization (WTO), the World Trade Body that Beat has beat Bans 1995.
Merz said that the idea is what is in its early stages, but the mechanism to resolve disputes may be included, as WTO meant.
“You all know that the WTO no longer works,” he said, “A new type of business organization” can gradually change, “we can change gradually” what we don’t have now. “
The German Chanman Chainman was talking about breaking near the dispute solution system of the WTO.
It was former US President Barack Obama who first blocked the appointments in the top court for the WTO’s Appellate Body – Business Disputes – in the office during his later years.
Regardless of party affiliation, this blockade has continued under every US administration, as gradual governments have opposed the decisions of the WTO to reduce US national interests.
As a result, business disputes cannot be decisively resolved after a party appeal. Currently, unresolved cases include disputes between European Union and Indonesia on nickel ore exports, decisions on subsidies for aircraft manufacturers Boeing and Airbus and anti-dumping cases against China.
The European Union from Leyen emphasized plans for particularly close partnership with equal ideology trade countries in Asia, potential cooperation with a comprehensive and progressive agreement for the Trans-Pacific Partnership (CPTPP).
The trade alliance currently includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The United Kingdom has joined, which has become the first European country in the block.
Trade liberalization without the United States
But can Europe create a new one without realistic American partnership? And how effective would it be to combine with global partners with equal ideology, uniquely in Asia-Pacific?
Jurgen Mathes expressed support for an interview with DW for the International Trade Policy Specialist at Cologon at German -based German Economic Institute (IW).
“A formal European Union application to join CPTPP Wood is a strategic important step in many cases,” Matthes said. “This will send a clear indication to the US that its protectionism is separating it, while the rest of the world continues to liberalize trade.”
Mathes said that it “remarkably large trans-regional trade agreements,” incorporating major economies, “as the largest block with the European Union”.
“It will cover almost all continuity. And perhaps some African countries can also be brought on the board,” said.
Without America, without China
Search for a club, however, will exclude China, which Mathas argued that fair competition is not known to play by rules.
“The goal is to create a strategic trade alliance that addresses today’s pressure issues in today’s global trade – not only American protectionism, but therefore large -scale market distortions due to China’s subsidy, which do not effectively address the rules of the current WTO,” Mathes said.
For the European Union, the priority will be to implement strict competition regulations within the new structure, especially about state-down enterprises and industrial subsidies. “Whoever meets those standards can be included,” Hey said.
This will require China to make a major improvement, discover market deformities and subsidies as a discovery, or finally to agree to a wide overhul of WTO rules.
Interested alliance for interim WTO dispute system
Free Trade Advocates have already created a workaround for the WTO’s stalled appeal process called multi-party interim appeal arbitration system (MPIA). Along with the WTO, the MPIA provides an alternative dispute solution system that works without American participation.
For the European Commission, 57 countries, 57.6% have joined the MPIA, representing global trade, including UK and all European Union member states.
Nevertheless, business groups discover the Federation of German wholesale, foreign trade and services (BGA), which represents Germany’s export zone, beware of reducing the WTO.
Speaking to the Reuters of the news agency, BGA President Dirk Jandura accepted the strategic benefits of creating a new structure among working democracy through CPTPP, but warned of risks. “We should not allow global business to tear in competitive blocks with different rules,” Heer said. “This new organization should only be a transitional solution, which is not clearly replaced by the purpose of improving – WTO.”
Improvement, not replacement
Brussels have finished the car to clarify that the target is not to observe the WTO. The Chairman of the European Union Commission, as a potential staring point to re -shape the WTO, “structured collaboration” with the CPTPPPPMERS “structured cooperation”.
Even the former Chief Economist of the WTO, Ralph Osa, who recently returned to the University of Zurich, openly accepted the need for change. “Does the World Trade Organization need reform? Absolutely,” he told DW.
The German Ministry of Economy resonated the scene, with the spokesperson of Minister Katrina Reich, confirming that the German government, along with the European Commission, is actively emphasizing the World Trade Organization reforms.
Thesis includes new rules to curb industrial subsidy to ensure fair competition, digital trade initiatives and investment facilities. The European Union is in interaction with countries that support open and rules-based trade-shape CPTPP members.
Strategic ambiguity in trade policy
The dual message of the European Union for both the US and China seems to be a part of a deliberate communication strategy that has evolved since the tariff of US President Donald Trump.
Mathes makes a new alliance under the banner of “open markets with fair trade”. In such a setup, “comes to the US markets, and when it comes to fair trade, China is out – until things change under a new American administration or a improved China.”
He is many benefits for this strategy. “We will achieve more trade liberalization and get access to new markets. We will differentiate America more and show Trump that protectionism is ultimately a dead end.” At the same time, Europe can send a clear message to China that it would not tolerate any Longer market distortions, he said.
This article was original in German.
