WTO - Council for Trade in Goods Meeting

Several global trade concerns were raised in the Council for Trade in Goods meeting held on the 6th and 7th of July.   While no new trade concerns were presented in the meeting, numerous issues were discussed in the context of the 37 previously raised trade concerns. The full meeting agenda is available here.

China’s New Export Control Law Faces International Scrutiny

Seven WTO members - the European Union, Japan, Canada, Korea, Australia, the UK, and Switzerland - voiced concerns over China's new export controls, effective from 1 August. These regulations apply to products containing gallium and germanium, essential components in computer chips and other goods.

Switzerland expressed concerns about potential disruption in global supply chains and the overall multilateral trading system. However, China defended its measures, stressing they were not a ban but export controls in line with common international practices.

US, Japan, and Netherlands Face Questions Over Export Controls

China sought explanations from the US, Japan, and the Netherlands for their synchronized introduction of new export control measures on the same sector within a brief time frame. China argued that these measures deviated from international norms concerning the peaceful use of science and technology and that they eroded the authority and effectiveness of WTO rules.

The US countered that the Goods Council was not the appropriate forum for discussing national security issues, a sentiment echoed by the EU and Japan, who claimed the measures were in line with WTO rules.

Critics Question EU Trade Measures Aimed at Environmental Conservation

Nine WTO members, including Indonesia, Russia, and Brazil, expressed concerns about the EU's new Deforestation Free Commodities Regulation. India criticized the policy for harming economic interests of developing countries, particularly in the agriculture sector which provides employment and economic well-being for large populations. The EU offered explanations and held informational sessions on the new regulation, promising continued engagement with the WTO.

Similarly, twelve members, among them China, Russia, and Brazil, reiterated their concerns over the EU's Carbon Border Adjustment Mechanism (CBAM). They claimed the EU didn't allow adequate time for member states to comment on the measure before it's enacted in October. The EU reassured that they maintained transparency during the design stage of CBAM and would continue to engage with members during the transitional phase.

Proposals and Notifications

Members discussed the document G/C/W/752, which aims to provide treatment similar to certain developing countries for graduated Least Developed Countries (LDCs) with a Gross National Product (GNP) below USD 1,000. Some developed members argued that the proposal still lacked necessary information to be technically workable.

Other issues noted by the Council included El Salvador's suspension of its free trade agreement with Chinese Taipei, the free trade agreement between Colombia and Israel, and modifications to an existing free trade agreement between Iceland, Liechtenstein, Norway, and the United Kingdom.

The Council also acknowledged the extended deadline given by the European Union and the United Kingdom to conclude negotiations of trading relationships with members following the UK's withdrawal from the EU.

The next Council for Trade in Goods meeting is scheduled for 30 November – 1 December 2023.