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U.S., EU and Japan Discuss Non-Market Practices, WTO Reform Efforts

On 23 May, U.S. Trade Representative Robert Lighthizer, European Union Trade Commissioner Cecilia Malmström, and Japanese Minister of Economy, Trade and Industry Hiroshige Seko held a tri-lateral meeting in Paris following the OECD Forum. The latest tri-lateral meeting followed those held in May 2018, September 2018 and January 2019. The ministers pledged in a joint statement to continue to co-operate to address “nonmarket policies and practices, market-oriented conditions, forced technology transfer policies and practices, industrial subsidies and state-owned enterprises, WTO reform, and digital trade and e-commerce.” The statement detailed the need for specific WTO reforms, including transparency and notification rules, subsidy rules, forced technology transfer, investment review mechanisms, export credits and e-commerce.

The joint statement made several references to the practices and policies of unidentified “third countries” and some of those references appeared to squarely target mainland China. For example, the ministers expressed growing concerns about third parties developing state enterprises into national champions, disrupting market-oriented trade and directing state enterprises to dominate global markets. According to the statement, the ministers have instructed their staff to “continue efforts to finalize trilateral text-based work on these and other issues in order to engage with other key WTO Members with the aim of initiating negotiations on stronger disciplines on industrial subsidies and state-owned enterprises.”

In addition, the ministers reiterated their call for more advanced WTO members that are claiming developing country status to undertake full commitments in on-going and future WTO negotiations. Hong Kong and mainland China are both WTO developing country members, along with two-thirds of the 164 members of the WTO.

Experts at the Center for Strategic and International Studies and the Atlantic Council have commented on prior tri-lateral meeting statements that, while many WTO members agree that WTO reform is necessary, there is no consensus on the exact steps to be taken. The WTO Appellate Body will lack a quorum in 2020 unless the United States ceases to block the appointment additional judges by December. The Appellate Body was not mentioned in this tri-lateral statement, however.

The three ministers pledged to continue discussions on the margins of the G-20 meeting to be held in Japan at the end of June.

Content provided by Picture: HKTDC Research
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