China’s slams US ‘arrogance’ on WTO status

Trump’s memo said the WTO, which operates a global system of trade rules and settles disputes, uses “an outdated dichotomy between developed and developing countries that has allowed some WTO members to gain unfair advantages.” (AFP)
Updated 29 July 2019

China’s slams US ‘arrogance’ on WTO status

  • Trump’s WTO memo is widely seen as a swipe at China

BEIJING: China Monday said the US threat to pull recognition of China’s “developing nation” status at the World Trade Organization showed its “arrogance and selfishness,” ahead of crucial trade talks this week.
The reaction followed a memo issued on Friday by President Donald Trump to US Trade Representative Robert Lighthizer, stressing that some countries were enjoying lenient treatment by “improperly” identifying themselves as developing economies.
The memo is widely seen as a swipe at China.
The Trump administration’s demand “further exposed its wayward arrogance and selfishness,” Chinese foreign ministry spokeswoman Hua Chunying said at a regular briefing Monday.
One or a few countries “should not have the final say” on which nations should be categorized as developing countries, Hua said.
She insisted that China needs to maintain its status as a developing economy to “achieve real trade fairness.”
Trump’s memo said the WTO, which operates a global system of trade rules and settles disputes, uses “an outdated dichotomy between developed and developing countries that has allowed some WTO members to gain unfair advantages.”
Without “substantial progress” to reform WTO rules within 90 days, Washington will no longer treat as a developing country any WTO member “improperly declaring itself a developing country and inappropriately seeking the benefit of flexibilities in WTO rules and negotiations,” said the statement, which focused mostly on China.
The memo came ahead of meetings in Shanghai on Tuesday and Wednesday between US and Chinese negotiators aiming to resolve a trade dispute that has led to tariffs on more than $360 billion worth of two-way trade involving the world’s two largest economies.
Washington “obviously timed the memo to serve as a new bargaining chip” in the trade talks, the official Xinhua news agency said in a commentary.
“But the tactic of imposing pressure is nothing new to China and has never worked,” it said.
Xinhua added that the US government’s “latest hegemonic attempt” to coerce the WTO “is destined to hit a wall of opposition.”
Developing country status in the WTO allows governments longer timelines for implementing free trade commitments, as well as the ability to protect some domestic industry and maintain subsidies.
But Jennifer Hillman, a former top US trade official who served at the WTO, has said the benefits granted to countries with the special status in most cases has long passed.
The Trump administration has long complained that WTO rules are unfair to the United States, and has nearly throttled significant WTO proceedings by refusing to name new members of the appellate body for the dispute settlement system, which will cease to function later this year.
Despite Trump’s criticisms Washington has, in fact, won the majority of complaints it has filed with the WTO.


Oil falls below $57 on virus impact and OPEC+ delay

Updated 19 February 2020

Oil falls below $57 on virus impact and OPEC+ delay

  • Contagion ‘is spooking market players,’ analysts say after Asian shares fall and Apple issues warning

LONDON: Oil fell below $57 a barrel on Tuesday, pressured by concerns over the impact on crude demand from the coronavirus outbreak in China and a lack of further action by OPEC and its allies to support the market.

Forecasters including the International Energy Agency (IEA) have cut 2020 oil demand estimates because of the virus. Though new cases in mainland China have dipped, global experts say it is too early to judge if the outbreak is being contained.

Brent crude was down 82 cents at $56.85 a barrel in mid-afternoon trade after rallying in the previous five sessions. US West Texas Intermediate crude fell 70 cents to $51.35.

“Risk aversion has returned to the markets,” said Commerzbank analyst Carsten Fritsch.

“OPEC+ has shown no sign yet of reacting to the virus-related slump in demand by making additional production cuts.”

The virus is having a wider impact on companies and financial markets. Asian shares fell and Wall Street was poised to retreat on Tuesday after Apple said it would miss quarterly revenue guidance owing to weakened demand in China.

“This has spooked market players and triggered a sharp pullback in risk assets,” said Tamas Varga of oil broker PVM.

The IEA last week said that first-quarter oil demand is likely to fall by 435,000 barrels per day (bpd) from the same period last year in the first quarterly decline since the financial crisis in 2009.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have been considering further production cuts to tighten supply and support prices.

The group, known as OPEC+, has a pact to cut oil output by 1.7 million bpd until the end of March.

The next OPEC+ meeting next month is set to consider an advisory panel’s recommendation to cut supply by a further 600,000 bpd. Talks on holding an earlier meeting in February appear to have made no progress, OPEC sources said.

As well as OPEC+ voluntary curbs, support for prices has come from involuntary losses in Libya, where output has collapsed since Jan. 18 because of a blockade of ports and oilfields.