Day: August 27, 2018

The United States told the World Trade Organization on Monday it would block the reappointment of one of the WTO’s four remaining appeals judges next month, confirming trade experts’ fears of a crisis in the system for

settling global rows.

U.S. President Donald Trump has railed against the WTO, calling it a catastrophe and a disaster. He has said the United States loses cases because other countries have most of the judges.

In fact, trade experts say, the United States has a similar, if not better, lose-win rate than other countries that have taken complaints to the WTO, and it has a rare privilege in that the judges on the WTO’s Appellate Body have always included one American.

Trump faces a barrage of disputes at the WTO against his trade policies, including global tariffs on steel and a tariff war with China. Since he came to power, Washington has blocked all appointments to the appeals chamber as existing judges’ terms end.

There are normally seven WTO appeals judges, but if Shree Baboo Chekitan Servansing, a trade judge from Mauritius, is not reappointed when his term expires on September 30, only three will remain — the minimum for the system to function.

It looks set to break down finally when two more judges’ terms expire in December 2019, but it could seize up sooner if any judges need to recuse themselves from a case for legal reasons.

If the U.S. veto paralyses the dispute system, it would end 23 years of WTO enforcement, the keystone of international efforts to prevent trade protectionism, at a time of heightened global trade tensions.

At the WTO’s monthly dispute settlement meeting, 67 member states have repeatedly petitioned Washington to drop its veto and keep the system working.

But U.S. Ambassador Dennis Shea told Monday’s meeting that the Appellate Body had consistently over-stepped its authority by reviewing and reversing factual findings by trade arbitration panels, and by interpreting WTO members’ domestic laws.

“The invention of an authority to review panel fact-finding … has added complexity, duplication and delay to every WTO dispute,” he told the meeting, according to a transcript of his prepared remarks.

Shea has previously promised to be “disruptive where necessary” to reform the WTO and has said the United States may choose not to accept appeals if they take longer than the allowed 90 days.

The United States has not followed through on the threat, but since legal rulings are routinely delayed, it effectively signaled that Washington reserved the right to ignore rulings that Washington does not like.
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About 100 workers protested outside tire manufacturer Pirelli’s Venezuela plant on Monday after finding the gateslocked, ten days after the country announced a broad set of reforms including a massive hike in the minimum wage.

Employees were not told the plant would be shut, said union leader Luis Alvarez, who added it was not immediately known if it was temporary or if the operation had permanently closed its doors.

“Production was falling, but they always kept us on the job,” said worker Nicolas Altomaris, who was waiting at a gate for information. “Now they’ve made this decision to send us out without knowing if we’ll return.”

Union leaders say about 700 employees work at the plant. Pirelli and parent company China National Chemical Corp Ltd did not immediately respond to requests for comment. Venezuela’s Information Ministry also did not immediately reply to an email seeking comment.

On Aug. 17 President Nicolas Maduro ordered a 3,000 percent minimum wage increase while also requiring that companies leave prices of their products fixed amid a hyperinflationary crisis. Business leaders say the package is unsustainable and would force many firms to close their doors.

In the past, Pirelli Venezuela has temporarily halted operations due to a lack of raw materials. Currency controls make it difficult to import such materials, while price controls can at times force companies to sell below production costs.

The company, which supplies tires for Formula One, manufactures tires for cars, motorcycles, trucks and buses in Venezuela. It was acquired in 2015 by China National Chemical, known as ChemChina, which is owned by the Chinese government.

Multinational companies including Clorox Co and Kellogg Co have been steadily leaving the country amid shrinking demand caused by an economic collapse.

Maduro has said the country is victim of an “economic war” led by political adversaries with the help of Washington.
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The United States and Mexico have reached a trade agreement, leaving Canada as the odd man out in efforts to revise or replace the North American Free Trade Agreement (NAFTA), according to U.S. President Donald Trump.

The new deal will be called the United States-Mexico Trade Agreement, Trump said Monday.

“We’ll get rid of the name NAFTA, it has a bad connotation because the United States was hurt very badly by NAFTA for many years,” Trump said.

“It’s a big day for trade, it’s a big day for our country,” Trump said with reporters present, who were called to the Oval Office to watch as Trump spoke on the telephone with Mexican President Enrique Pena Nieto.

The Mexican leader expressed hope to “renew, modernize and update” NAFTA while Trump’s rhetoric indicated he sees that 24-year-old three-nation deal as dead.

“We’ll have a formal news conference in the not-too-distant future,” about the trade pact, Trump said to Pena Nieto.

“This is something very positive for the United States and Mexico,” Pena Nieto replied, saying he is looking forward to toasting Trump with tequila to celebrate, expressing to his American counterpart that he is “really grateful and greatly recognize and acknowledge your political will in all of this.”

Mexico has agreed to immediately begin purchasing as many agricultural products from the United States as possible, according to Trump.

Pena Nieto leaves office on December 1, turning over the Mexican government to his leftist successor, Andres Manuel Lopez Obrador. That means the clock is ticking to give Mexico’s legislature enough time to ratify it before the change of administration.

Congressional notification expected

The White House is also expected to formally notify Congress by the end of this week of its intention to sign a new trade agreement within 90 days.

“It will be likely be signed at the end of November,” said U.S. Trade Representative Robert Lighthizer, who was also in the Oval Office, along with Mexico’s foreign and trade ministers, for the Trump-Pena Nieto phone call.

The U.S. president, since the time of his 2016 election campaign has referred to NAFTA as the worst trade deal in history and repeated especially inflammatory rhetoric about America’s southern neighbor.

Trump, who blames NAFTA for the destruction of manufacturing jobs in the United States, repeatedly threatened to abandon the trade pact with Canada and Mexico, which came into effect during the Clinton administration in 1994.

Trump has rejected other multi-national deals, such as the Trans-Pacific Partnership (another trade pact) and the Paris Agreement on climate change mitigation, expressing a strong preference for one-on-one negotiations on trade and other matters with countries.

Negotiations with Canada

Trump said he would call Canadian Prime Minister Justin Trudeau soon and that the United States is open to talks with Canada if it is willing to negotiate fairly.

“I’ll be terminating the existing deal,” Trump said in reference to NAFTA.

The U.S. president also threatened America’s northern neighbor with penalties if there is no agreement.

“Frankly, a tariff on cars is the much easier way to go,” said Trump.

In Ottawa, officials are expressing resilience.

“We will only sign a new NAFTA that is good for Canada and good for the middle class,” said the Canadian foreign ministry in a statement, indicating Ottawa’s willingness to “continue to work toward a modernized NAFTA.”

“We hope that Canada can join in now,” Lighthizer subsequently told reporters during a conference call.

White House officials are denying that Monday’s announcement by the presidents of the United States and Mexico was designed to pressure the Canadians.

“Leaving Canada out of a new NAFTA would be a mistake and it is questionable whether the Office of the U.S. Trade Representative has the authority under current Trade Promotion Authority legislation to conclude just a bilateral with Mexico,” a visiting scholar at the Cato Institute, Inu Manak, who focuses on trade conflicts, tells VOA News.  “What happens next is anyone’s guess, but we should keep our eyes open for the return of Canada’s Foreign Minister, Chrystia Freeland, to Washington to wrap up the discussions soon.”

The three North American countries do about $1 trillion in trade among themselves annually.

 
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Economist Andrej Bertoncelj is to become Slovenia’s finance minister in the minority center-left government of Prime Minister designate Marjan Sarec, a spokeswoman for Sarec’s party said on Monday.

Bertoncelj’s main task will be to keep a lid on public spending in the small Alpine country and reduce public debt which reached 73.6 percent of GDP last year, down from 78.6 percent in 2016, but was still well above the 60 percent of GDP level allowed for European Union members.

Outgoing Prime Minister Miro Cerar will become foreign minister, replacing Karl Erjavec who shifts to defense, while Economy Minister Zdravko Pocivalsek will retain his portfolio, the spokeswoman, Nika Vrhovnik, told Reuters.

Parliament is due to confirm the new government in the first half of September after ministers have presented themselves to parliamentary hearings.

Bertoncelj, who is an independent, is a member of the management board of state investment fund Slovenian Sovereign Holding, which manages state assets and is in charge of privatization of state firms.

Before that he worked at a university as a professor of management after holding top positions in two pharmaceutical companies previously. He will replace the outgoing finance minister Mateja Vranicar Erman.

Earlier in August parliament elected Sarec as the next prime minister following a June 3 election in which the centre-right anti-immigrant Slovenian Democratic Party got most votes but lacked coalition partners to form a government.

Sarec, who heads the The List of Marjan Sarec (LMS) party, formed a coalition with four other center-left parties – the Social Democrats, the Party of Modern Center, the Party of Alenka Bratusek and pensioners’ party Desus.

The five parties hold 43 out of 90 parliamentary seats but have agreed with the left-wing party the Left, which holds 9 seats, that it will support the government in its key projects although it will not join the coalition.

Some analysts say the minority government will find it hard to complete its four year mandate due to differences between the coalition partners.

One of the first tasks of the new government will be to sell a majority in Slovenia’s largest bank Nova Ljubljanska Banka (NLB). Slovenia has committed itself to selling the bank in exchange for European Commission’s approval of state aid to the bank in 2013.

Slovenians will also be looking to the new government to improve the inefficient national health system. Pension reform to ease the burden of the rapidly ageing population on the state budget will also be a challenge.
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President Donald Trump says the prospects are “looking good” for an agreement with Mexico that could set the stage for an overhaul of the North American Free Trade Agreement.

“A big deal looking good with Mexico!” Trump tweeted Monday morning.

U.S. and Mexican negotiators worked over the weekend to narrow their differences. Once they reach an agreement, the third country in NAFTA — Canada — would be brought back in to finalize a revamp of the 24-year-old pact.

NAFTA reduced most trade barriers between the three countries. But Trump and other critics say it encouraged U.S. manufacturers to move south of the border to exploit low-wage Mexican labor.

The Trump administration wants a higher percentage of auto production to come from within the NAFTA bloc before qualifying for duty-free status.
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