During the recent Alacero Congress 59 in Cartagena, Colombia attended by SteelOrbis, Jorge Miranda, Lead International Trade Advisor at King & Spalding LLP presented insightful background into what has come to be categorized as the USA-China trade war. Miranda noted how while protectionism is not a desirable aspect of open economies, China has not played as an open economy and the World Trade Organization (WTO) has made some serious judgments and actions against the US that provided the background for the US to seek to address grievances outside the WTO infrastructure. Miranda accorded some legitimacy in the US’ claim that the WTO has proven itself ineffective in regards holding China accountable to standard measures and agreements. Additionally, Miranda noted the WTO was designed for market-driven economies. Miranda defined China is a controlled economy that sways the world economies yet has strong internal processes that are evidently not market-driven given distortions in capital (low-interest rates and subsidies), labor (classes of workers), land (access and mandates), raw materials (limits on exports), and energy (price and access).
Gregory Spak, President of White & Case LLP, spoke of the need to maintain the WTO due to the longstanding, useful infrastructure that has been developed since it commenced in January 1995. At its inception, it gained the support of 124 nations and has now grown to encompass over 160 countries. He spoke of the need to revise it, but he also warned of the danger of countries such as the US to walk away from it. The WTO at its core was recognized by both speakers as having core principals of non-discrimination, bound tariffs, progressive market liberalization, dispute settlements processes, and exceptions to combat unfair trade.
Spak spoke of efforts to modify the WTO system but noted that regional agreements are proliferating which have an “inherent discriminatory component.” Spak said, “The regional agreements assert sovereignty at the expense of an international system.” As a result of the undergoing changes, he noted that multilateral negotiations and dispute settlement processes may “never be the same.”