EU flexes trade muscles after US cripples WTO

Agence France-Presse

Posted at Dec 12 2019 09:35 PM

BRUSSELS - The EU on Thursday proposed a move to strengthen its power to hit back in global trade rows, looking for defensive alternatives after the US crippled the WTO.

The new measures would hand Brussels powers to unilaterally decide countermeasures against other countries, a power that traditionally sits with the World Trade Organization in Geneva.

Sometimes referred to as the supreme court of global trade, the WTO has since Wednesday been unable to issue rulings, victim of a campaign by President Donald Trump accusing it of anti-US bias.

The Trump administration has for two years blocked appointments to the WTO's appellate body, and work there finally broke down on Wednesday, when just one sitting member remained.

"Whilst we seek to reform the WTO and re-establish a well-functioning WTO system, we cannot afford being defenseless if there is no possibility to get a satisfactory solution within the WTO," EU trade commissioner Phil Hogan said.

"Today's proposals will let us defend our interests in these particularly uneasy times for international trade," Hogan added.

WTO membership currently bars countries from unilaterally calculating and imposing counter-measures, and with the new measures, the EU would reclaim that authority.

These "will allow us to defend our companies, workers and consumers whenever our partners do not play by the rules," said Hogan.

At an EU summit Thursday and Friday in Brussels, European leaders will urge the European Parliament and the member states "to examine the Commission's proposal as a priority", according to a draft seen by AFP.

The breakdown at the WTO came despite months of talks to reconcile the US against the WTO's 163 members, which include China.

The US has wide-ranging concerns about the WTO -- which predate Trump's presidency -- with its allegedly soft stance on China a main criticism.

Trump's trade officials have also argued that the US Constitution does not permit a foreign court to supersede an American one.

The EU is also seeking to create an ad hoc arbitration process with other countries during the WTO stalemate, but so far only a handful of other countries have signed on.

The fight over the WTO is one of several fronts pitting the US against the EU.

Over the past three years, Trump has hit Europe with steel and aluminum tariffs, threatened similar levies on cars and drawn up plans to target French champagne and handbags as retaliation over a digital tax in France.