Trump tells WTO to stop lenient trade treatment of China

US President Donald Trump said that the WTO ‘is in desperate need of reform.’ (AFP)
Updated 28 July 2019

Trump tells WTO to stop lenient trade treatment of China

  • Trump said the designation lets powerhouse China and others take “unfair” advantage of trade rules

WASHINGTON: President Donald Trump pressed the World Trade Organization to stop letting China and other economies receive lenient treatment under global trade rules by calling themselves “developing” countries.
In a memo, Trump directed US Trade Representative Robert Lighthizer to “use all available means” to get the WTO to prevent countries from claiming developing country status if their economic strength means they don’t need beneficial treatment.

FASTFACT

Among wealthy countries that claim developing status are Singapore, South Korea, Brunei and Kuwait.

Developing countries, supposedly not yet competitive with advanced economies such as the US, get more time to open their economies, more leeway to subsidize their exports and procedural advantages in WTO disputes. Countries can choose their own status, and other countries can challenge them.
Trump said the designation lets powerhouse China and others take “unfair” advantage of trade rules. If the US decides the WTO has not made “substantial progress’ after 90 days, it will seek unilaterally to stop treating those countries as developing economies.
In a tweet, Trump wrote that the “WTO is BROKEN when the world’s RICHEST countries claim to be developing countries to avoid WTO rules and get special treatment. NO more!!! Today I directed the US Trade Representative to take action so that countries stop CHEATING the system at the expense of the USA!”
Despite claiming developing country status, China is the world’s second-biggest economy and No. 1 exporter. Among wealthy economies that claim developing status are Singapore, South Korea, Brunei, Kuwait and the UAE.
“China and too many other countries have continued to style themselves as developing countries, allowing them to enjoy the benefits that come with that status and seek weaker commitments than those made by other WTO members,” Trump’s memo said, adding that “the status quo cannot continue.”
But former WTO official Jennifer Hillman said that she doubts Trump’s move will make much difference. Most of the more-generous deadlines developing countries got to open their economies have long since passed.
“While there may be a few places in the agreement that still give some small break to developing countries, they are not many,” said Hillman, senior fellow on the Council on Foreign Relations. “The proposal to stop treating countries as developing countries for purposes of the WTO won’t change much.”
The US and China are locked in a trade war over American allegations that Beijing is using predatory practices, including outright cybertheft, to challenge US technological dominance.
The Trump administration has complained that the Geneva-based WTO, which referees trade disputes, is ill-equipped to handle China’s unique economy in which the government plays a major role and boundaries between state-owned and private companies can be blurry. “The WTO is in desperate need of reform,” Trump said.


Oil slumps more than 4% on coronavirus fears

Updated 28 February 2020

Oil slumps more than 4% on coronavirus fears

  • Traders fret about impact of spreading virus on crude demand, particularly from China

LONDON: World oil prices tumbled by more than 4 percent on Thursday, as traders fretted about the impact of spreading coronavirus on crude demand, particularly from key consumer China.

Brent oil for April delivery tanked almost 4.2 percent to $51.20 per barrel, while New York’s WTI crude for the same month dived nearly 5 percent to $46.31.

“Concerns that the virus will prompt a global slowdown, weaker consumer confidence and reduced travel has raised concerns about lower demand, weighing on prices,” said CMC Markets analyst Michael Hewson.

Investors are growing increasingly fearful about the economic impact of the new coronavirus or COVID-19 outbreak. 

The virus continues to spread meanwhile, with Brazil reporting Latin America’s first case, and Denmark, Estonia, Greece, Georgia, Norway and Pakistan following suit.

Around 2,800 people have died in China and more than 80,000 have been infected. There have been more than 50 deaths and 3,600 cases in dozens of other countries, raising fears of a pandemic.

The spread of the virus to large economies including South Korea, Japan and Italy has raised concerns that growth in fuel demand will be limited. 

Consultants Facts Global Energy forecast oil demand would grow by 60,000 barrels per day in 2020, a level it called “practically zero,” due to the outbreak.

US President Donald Trump sought to assure Americans on Wednesday evening that the risk from coronavirus remained “very low,” but global equities resumed their plunge, wiping out more than $3 trillion in value this week alone.

“The negative price impact would intensify if the coronavirus were declared pandemic by the World Health Organization, something that looks imminent,” said PVM Oil Associates analyst Tamas Varga.

“The mood is gloomy and the end of the tunnel is not in sight – there is no light ahead just darkness. Not even a refreshingly positive weekly US oil report was able to lend price support.”

Gasoline stockpiles dropped by 2.7 million barrels in the week to Feb. 21 to 256.4 million, the Energy Information Administration (EIA) said on Wednesday, amid a decline in refinery throughput. Distillate inventories fell by 2.1 million barrels to 138.5 million.

US crude oil stockpiles increased by 452,000 barrels to 443.3 million barrels, the EIA said, which was less than the 2-million-barrel rise analysts had expected.

The crude market is watching for possible deeper output cuts by the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+.

“Oil is in freefall as the magnitude of global quarantine efforts will provide severe demand destruction for the next couple of quarters,” said Edward Moya, senior market analyst at OANDA. 

“Expectations are growing for OPEC+ to deliver deeper production cuts next week.”

OPEC+ plans to meet in Vienna on March 5-6.