European officials are struggling to save the WTO, which is likely to cease to exist because of the aggressive trade policy of US President Donald trump.
In the inner circles of the EU has spread drawn up by the European Commission note, which States that the United States consciously working on breaking an existing world trading order, and also warned about the upcoming “shopping Apocalypse”.
If this document has any weight, then “trade war” is about to deteriorate, although it would seem that maybe sounded worse than last week, trump’s threats to impose 20% duties on imported cars in the United States.
According to Bloomberg, in a note to the EU States that “rules-based international trading system” can return to the condition in which “a strong impose their will on the weak.” The world will be back “in a trading environment where rules are adhered to only where it is profitable, and where the laws of trade relations dictates who is stronger”.
Lamentations about the return to the “mercantilist transactions” increased after President trump has decided to reduce the US trade deficit at any cost, even if that cost is the destruction of the multilateral trading order.
In the note of the EU set out three claims:
• gaps in the law of international trade, “leading to problems caused by non-market policies of the major players and which the WTO seems unable to adequately address”;
• aggressive action by the USA and the introduction of punitive duties aimed against both allies and opponents;
• the US decision to block the appointment of members to the dispute settlement Body of the WTO, which is the main arbitrator in commercial disputes.
In a separate paragraph, the European Union complained to the practice of the United States to block the appointment to the WTO appellate body, which could issue a decision in trade disputes.
“Because the members of the appellate body leaving their posts and new appointments are blocked, the dispute settlement system soon to be paralyzed, the implementation of the rules will be impossible, – reads the statement of the Commission that are widespread on the eve of the summit of EU leaders, which among other things will discuss issues of trade. For global economic governance it will be a step in 20 years ago.”
This week the European Commission will have the opportunity to voice their grievances: the leaders of the largest trade block in the world will come together to make “full-fledged approach to the joint establishment of the WTO in key areas”.
It is unclear whether heed US any proposals from the Europeans, but this morning the Moody’s Agency gave the White house an extra reason to think about it. The imposition of tariffs of 25% will have a negative impact on the global automotive industry. Before to the detriment of foreign competitors, fees will put pressure on American firms such as Ford and GM. European automakers are especially severely affected, Jaguar Land Rover and Volvo.
