Tuesday 20 November 2018

As trade war steps up, WTO already dealing with hundreds of disputes

Ellie Donnelly

Ellie Donnelly

The threat of a global trade war is new and the atmosphere around trade is unusually fraught, but disputes between the European Union, the US, China and other big economic players have bubbled below the surface for years.

In total, China and US have more than 300 disputes with different countries and trading blocs, according to the World Economic Forum (WEF).

These disputes between nations are handled by the World Trade Organisation (WTO), the global organisation that deals with the rules of trade between nations.

WTO trade agreements are negotiated and signed by the bulk of the world's trading nations, and then ratified in national parliaments. The main goal of the WTO is to ensure that trade between nations flows as smoothly, predictably, and freely as possible.

The US is the main country that China is currently engaging in disputes with, followed by the EU. However, the EU tops the list for engaging in disputes against the US, and in disputes brought by the US, according to the WEF.

And with the trade war between the world's two biggest economies, the US and China, showing no sign of abating, disputes between nations look set to continue.

Currently China is involved in a total of 57 disputes, either as the complainant or as responder to complaints from other countries.

Given the position of China and the US as global economic superpowers, it is unsurprising that the US accounts for the majority of the disputes that China is involved in.

However, China also has a number of disputes with the EU, as well as a small amount of disputes with countries such as Mexico and Japan.

Meanwhile, the US currently has five times as many trade disputes as China.

Several of the complaints against the US have come into play following the order signed by US President Donald Trump in March that imposed a 25pc import tax on steel and a 10pc tariff on foreign-produced aluminium, according to the WEF.

Among the countries and trading blocs that have lodged complaints with the WTO against the steel and aluminium tariffs are China, India, the EU, Norway, Russia, Canada and Mexico.

Meanwhile, the US has lodged over 100 complaints with the WTO in respect of imports or the trade policies of nine countries as well as the EU.

Included in the products that the US is currently fighting trade disputes over are Argentinian textiles, Indian solar panels, and European cheese.

In Ireland, consumers can expected to be affected by the trade war in the form of a sharp jump in price on products including orange juice, bourbon and cranberries before the summer is out.

Jack Daniel's bourbon is among the leading brands affected, and fresh orange juice such as Tropicana could also be hit.

Groceries here are already among the dearest in Europe.

Other goods set to be impacted are cranberry juice, peanut butter, cosmetics and jeans imported to the EU from the United States.

With Ireland already having the third-highest prices for goods and services in the EU, the tariffs are likely to have a disproportionate impact on shoppers here.

Food prices here are 17pc higher than the European Union average, according to Eurostat, the European Commission's official statistics unit.

Irish Independent

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