The German Economic Institute (IW) suggested in a report that was published on Wednesday that the European Union (EU) should collaborate with African nations to alter the laws that govern subsidies within the World Trade Organization (WTO). This would be a means to combat China’s market distortions and diplomatic influence.
The Internationale Wirtschaft (IW), which receives funding from significant German business associations and is influential among Berlin politicians, released the report ahead of a meeting between the European Union and China that will take place in Beijing on Thursday and Friday.
Three months have passed since the European Commission initiated an anti-subsidy investigation into Chinese electric vehicles, and it is anticipated that the problem of unfair competition will be at the forefront of the discussion.
At the World Trade Organization’s (WTO) 13th ministerial conference (MC13), which will take place in February, reform will be a primary topic of discussion; nevertheless, to implement any significant changes, a complete consensus is required.
To provide more significant assistance to poor nations, the African negotiating group of the World Trade Organization (WTO) has suggested modifying the existing subsidy regulations. This would include granting developing nations the ability to establish local content criteria and provide environmental preservation subsidies.
In a recent report that Reuters reviewed before it was published, the International Workgroup (IW) argues that the European Union (EU) ought to broaden this endeavor to tighten subsidy laws for the leading trade countries.
To determine these significant actors, their percentage of global commerce or income level would be taken into consideration. China is considered a developing nation by the World Trade Organization (WTO). However, this means that new laws would have an impact on China.
To put pressure on China to adopt change and to help curb the increasing global subsidy race, a combined endeavor between the European Union and Africa may be implemented.
According to Juergen Matthes and Samina Sultan, authors of the paper “Reforming the WTO’s subsidy rules: A new opportunity to tackle the global distortions of China’s state capitalism,” “In addition, the EU could counter China’s attempt to present itself as a supporter of developing countries’ interests in Geneva,” Matthes and Sultan wrote.
“If China blocked the reform, it would also block the vital interests of the African Group and other developing countries in gaining more policy space for development.”
Comment Template