Washington Insider-- Tuesday

New WTO Director General

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

ITC Rules Blueberry Imports Not Causing Serious Injury To Domestic Producers

The U.S. International Trade Commission ruled in a unanimous decision that blueberry imports “are not being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or threat of serious injury, to the domestic industry.”

Chair Jason Kearns, Vice Chair Randolph Stayin, and Commissioners David Johanson, Rhonda Schmidtlein, and Amy Karpel voted in the negative, the agency said.

The ruling in the Section 201 safeguard investigation ends the possibility the U.S. government will impose antidumping or anti-subsidy imposed by the U.S. Commerce Department.

“We believed this data and testimony made a compelling case that safeguard measures were critical to the survival of our domestic farmers, and we are disappointed by the Commission's decision,” The American Blueberry Alliance said.

Taiwan to Hold Referendum On US Pork Produced With Ractopamine

Public outrage regarding Taiwan's decision to allow imports of U.S. pork containing feed additive ractopamine has triggered a referendum on the issue to be held within the next six months.

Some also believe it could harm prospects for President Tsai Ing-wen's independence-leaning Democratic Progressive Party in the local government elections next year. The China-friendly Kuomintang opposition party has led the effort against U.S. pork and hopes to capitalize on a coinciding drop in approval ratings for Tsai.

The decision to allow pork from the U.S. produced with ractopamine was aimed at smoothing the way for free trade talks with the U.S. that have been paused since 2016.

Washington Insider: New WTO Director General

The New York Times is reporting this week that Ngozi Okonjo-Iweala, a Nigerian economist and former finance minister, is poised to become the first woman and first African to lead the World Trade Organization when it meets this week to consider her candidacy for director general.

The appointment would remove a key obstacle to the functioning of the organization, which has been leaderless during a time of growing protectionism and global economic upheaval brought about by the pandemic. Still, the Times cautions that even with Dr. Okonjo-Iweala at the helm and the renewed support of the Biden administration, the WTO will face steep challenges surrounding its effectiveness as the world's trade arbiter.

Trade negotiations, including efforts to restrain harmful subsidies such those given to the fishing industry, have dragged on without resolution. A key WTO unit that handles trade disputes, the “appellate body,” remains crippled after the Trump administration blocked appointments of new personnel. And there are deep divisions over whether rich and poor countries should receive different treatment under global rules.

There is also growing consensus that the World Trade Organization has failed to police some of China's worst offenses, which many in the United States consider the biggest trade challenge today. And there is deep uncertainty about whether the organization can be overhauled to address those shortcomings.

The Trump administration spent the last four years mostly criticizing or ignoring the WTO, ultimately weakening it by implementing its most prominent trade policies outside of its boundaries. Rather than work with the organization, President Trump took on trading partners like China and the European Union one-on-one. Trading partners argued that the Trump policies contravened WTO rules.

President Joe Biden is likely to take a very different approach, the Times says. He criticized Trump for alienating allies and weakening the multilateral system and is expected to make the United States a more active player in international groups including the WTO.

That includes supporting the organization's new leadership. On Feb. 5, the Biden administration announced it would support Dr. Okonjo-Iweala, reversing efforts by the Trump administration to block her candidacy.

The former director general, Roberto Azevedo, announced last May that he would leave the job a year early and departed in August. While the vast majority of the organization's members supported Dr. Okonjo-Iweala to replace him, Trump administration officials, particularly the former U.S. Trade Representative Robert Lighthizer, did not.

“The United States stands ready to engage in the next phase of the WTO process for reaching a consensus decision on the WTO director general,” the Office of the United States Trade Representative said earlier this month. “The Biden administration looks forward to working with a new WTO director general to find paths forward to achieve necessary substantive and procedural reform of the WTO.”

Dr. Okonjo-Iweala, 66, is a development economist who spent 25 years working at the World Bank, including as managing director, and served two terms as Nigeria's finance minister, as well as the country's foreign affairs minister. A U.S. citizen who earned her doctorate from the Massachusetts Institute of Technology, she serves on the boards of Twitter and Standard Chartered and is an adviser to the Asian Infrastructure Investment Bank. Until recently she served on the board of GAVI, an international organization that distributes vaccines to poor countries.

In her first stint as finance minister, she led negotiations that resulted in most of Nigeria's external debt being wiped out. Later, as coordinating minister of the economy in Nigeria — a powerful position created for her that has never been held before or since — many ministers took directives from her, the Times said.

Dr. Okonjo-Iweala has said that her earliest priorities will be ensuring the free flow of vaccines, medicines and medical supplies to help deal with the pandemic and aid the global economic recovery. She has vowed to push for new trade agreements on fisheries and the e-commerce industry, and called for finding “solutions to the stalemate over dispute settlement.” She also said she would prioritize updating trade rules, encouraging member transparency.

Following Dr. Okonjo-Iweala's appointment, one of the most pressing issues for the World Trade Organization will most likely be the paralysis of its system for settling trade disputes.

The appellate body, a part of the organization that considers appeals by countries to WTO decisions on trade disputes, has been shuttered for over a year, after the Trump administration blocked new appointments to the panel that hears those arguments.

While the Biden administration is unlikely to be as critical or confrontational as the Trump administration was about the issues plaguing the WTO, some Democrats share concerns about the organization's shortcomings, including whether the appellate body has unfairly constrained U.S. trade policy. And many officials in the Biden administration recognize the World Trade Organization has only limited power to push China to make economic reforms.

So, we will see. Trade policy, along with new disputes likely to reach the WTO, are expected to continue to be among the new administration's most difficult challenges as it attempts to strengthen lagging U.S. economic sectors, especially those facing new technologies — along with those facing increasing competition for growing global food markets. These are trends producers should watch closely as they emerge, Washington Insider believes.

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