Digest Content
· Autumn 2020 Economic Forecast: Rebound interrupted as resurgence of pandemic deepens uncertainty
· Revised draft consolidated text on fisheries subsidies has been presented at WTO
· Anti-Dumping Committee holds first 2020 meeting
· DDG Wolff underlines central role of SPS Agreement in facilitating trade in safe food
· Hong Kong, China initiates dispute complaint against US origin marking requirements
· DDG Wolff welcomes two new OIE publications on trade and animal health
· New WTO paper explores linkages between trade and the spread of diseases of animal origin
Autumn 2020 Economic Forecast: Rebound interrupted as resurgence of pandemic deepens uncertainty
The coronavirus pandemic represents a very large shock for the global and EU economies, with very severe economic and social consequences. Economic activity in Europe suffered a severe shock in the first half of the year and rebounded strongly in the third quarter as containment measures were gradually lifted. However, the resurgence of the pandemic in recent weeks is resulting in disruptions as national authorities introduce new public health measures to limit its spread. The epidemiological situation means that growth projections over the forecast horizon are subject to an extremely high degree of uncertainty and risks.
The Autumn 2020 Economic Forecast projects that the euro area economy will contract by 7.8% in 2020 before growing 4.2% in 2021 and 3% in 2022. The forecast projects that the EU economy will contract by 7.4% in 2020 before recovering with growth of 4.1% in 2021 and 3% in 2022. Compared to the Summer 2020 Economic Forecast, growth projections for both the euro area and the EU are slightly higher for 2020 and lower for 2021. Output in both the euro area and the EU is not expected to recover its pre-pandemic level in 2022.
The principal risk stems from a worsening of the pandemic, requiring more stringent public health measures and leading to a more severe and longer lasting impact on the economy. This has motivated a scenario analysis for two alternative paths of the pandemic evolution – a more benign one and a downside one – and its economic impact. There is also a risk that the scars left by the pandemic on the economy – such as bankruptcies, long-term unemployment and supply disruptions – could be deeper and farther reaching. The European economy could also be impacted negatively if the global economy and world trade improved less than forecast or if trade tensions were to increase. The possibility of financial market stress is another downside risk.
The economic impact of the pandemic has differed widely across the EU and the same is true of recovery prospects.
On the upside, NextGenerationEU, the EU’s economic recovery programme, including the Recovery and Resilience Facility, is likely to provide a stronger boost to the EU economy than projected.
A trade agreement between the EU and the UK would also have a positive impact on the EU economy from 2021 compared to the forecast baseline of the UK and EU trading based on WTO Most Favoured Nation (MFN) rules.
Revised draft consolidated text on fisheries subsidies has been presented at WTO
At a 2 November 2020 meeting convened at the level of heads of delegations, the chair of the Negotiating Group, Ambassador Santiago Wills (Colombia), presented a revised draft consolidated text for an agreement on fisheries subsidies.
Given the ongoing COVID-19 pandemic and related containment measures, the chair said that members will be informed once concrete plans to continue the negotiation process are in place.
In the meantime, at the cluster of meetings members will further discuss pending issues including: the duration of a subsidy prohibition where a vessel or operator is found to have engaged in illegal, unreported or unregulated fishing; unassessed stocks; dispute settlement and remedies; and special and differential treatment for developing and least-developed country members.
Members continue to also deliberate on how the pandemic may affect timelines for concluding negotiations.
For reference:
At the WTO’s 11th Ministerial Conference, ministers agreed to secure an agreement in 2020 on disciplines eliminating subsidies for illegal, unreported and unregulated fishing and prohibiting certain forms of fisheries subsidies that contribute to overcapacity and overfishing, with special and differential treatment for developing and least-developed countries.
Anti-Dumping Committee holds first 2020 meeting
The WTO’s Committee on Anti-Dumping Practices met on 28 October to review members’ notifications of new or amended anti-dumping laws and regulations and reports on anti-dumping actions. The meeting was the first for the committee in 2020, following the cancellation of its April meeting due to the COVID-19 pandemic.
As is the usual practice in the Anti-Dumping Committee, delegations raised questions about the practices of other members in reviewing their semi-annual notifications on anti-dumping actions: the initiation of investigations, the imposition of provisional and final anti-dumping duties and the review of existing anti-dumping measures.
DDG Wolff underlines central role of SPS Agreement in facilitating trade in safe food
In his opening remarks at an event marking the 25th anniversary of the WTO Agreement on Sanitary and Phytosanitary (SPS) Measures, Deputy Director-General Alan Wolff said that the Agreement is more relevant than ever at a time when food safety continues to be a major concern for all WTO members. DDG Wolff called on members to try to anticipate the challenges the next 25 years will bring and to hold open discussions in order to find constructive solutions.
Wolff also noted that the WTO is celebrating its 25th anniversary, and so is the SPS Agreement. The world has changed dramatically since 1995, but food safety was and continues to be a major concern for all of the WTO’s 164 Members. For that reason, and to foster safe trade to satisfy the nutritional needs of all, the SPS Agreement will continue to be central to WTO’s role in facilitating trade in safe food across borders.
The SPS Agreement recognizes the need to protect health and ensure food safety, while aiming to avoid unnecessary barriers to trade. WTO Members also engage in many bilateral and regional trade agreements, and many of these contain SPS chapters, most of which begin by reaffirming the parties’ commitment to the principles of the SPS Agreement.
The work of the SPS Agreement is not done. Recent studies on food safety, animal and plant health have shed light on the human health implications and economic relevance of SPS measures. The WHO in 2020 estimated that 600 million people still fall ill after eating contaminated food and 420 000 out of these people die every year. The World Bank in 2019 estimated the costs of unsafe food in low and middle-income countries at more than USD 95.2 billion. The OIE in 2016 estimated that losses in livestock production due to animal diseases amounted to around USD 300 billion per year. The OECD in 2018 found that antibiotic resistance could lead to costs of up to USD 3.5 billion a year on average. FAO in 2019 estimated that between 20 to 40 percent of global crop production were lost to pests every year, and that plant diseases cost the global economy around USD 220 billion, and invasive insects around USD 70 billion.
SPS risks can have devastating effects. Limited capacity to meet food safety, animal and plant health requirements is often one of the major obstacles for producers in developing countries to engage in trade in agricultural products. Recognising these challenges, the WTO together with the FAO, OIE, WHO and the World Bank Group, founded the Standards and Trade Development Facility (STDF) to support developing country governments and the private sector to tackle SPS capacity gaps, offering a way to boost economic development.
The role of the SPS Committee in solving trade issues cannot be overstated. Since 1995, more than half of the concerns raised in the SPS Committee have been resolved or partially resolved. The engagement of Members has had a significant positive economic impact, especially for developing countries. And the discussions of specific trade concerns, even when they are difficult to resolve, allow Members to engage in a dialogue about regulatory approaches, their trade effects, and to spread the word on good practices, helping to contribute to future convergence.
The SPS Agreement, and further decisions and recommendations adopted by Members to improve its implementation, provide a large variety of instruments to prevent and resolve trade concerns. These are gathered in the Catalogue of Instruments available to Members to manage SPS issues adopted by the Committee in 2018.
Hong Kong, China initiates dispute complaint against US origin marking requirements
Hong Kong has requested WTO dispute consultations with the United States concerning marks of origin requirements imposed by the US on goods produced in Hong Kong. The request was circulated to WTO members on 3 November.
On 11 August 2020, the U.S. Customs and Border Protection (USCBP) published a notice that, after 25 September 2020, goods produced in Hong Kong must be marked to indicate that their origin is “China” for the purposes of the origin marking requirement. By subsequent notice, the USCBP extended the date for compliance with this requirement to 10 November 2020.
Section 304 of the Tariff Act of 1930 requires articles of non-U.S. origin imported into the United States to be marked “in such manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article”. Prior to the imposition of the revised origin marking requirement as announced in the notice published on 11 August 2020, the United States has required, and therefore permitted, goods produced in Hong Kong to be marked to indicate that their origin is “Hong Kong”. The United States’ prior treatment of goods of Hong Kong origin was consistent with the fact that the United States generally permits goods originating within the territory of other WTO Members, including separate customs territory Members, to be marked with the English name of that territory.
Hong Kong is concerned that the measures described above are inconsistent with the United States’ obligations under multiple provisions of the covered agreements, including, inter alia:
1. Article I:1 of the GATT 1994;
2. Article IX:1 of the GATT 1994;
3. Article X:3(a) of the GATT 1994;
4. Article 2(c) of the Agreement on Rules of Origin;
5. Article 2(d) of the Agreement on Rules of Origin;
6. Article 2(e) of the Agreement on Rules of Origin;
7. Article 2.1 of the Agreement on Technical Barriers to Trade.
DDG Wolff welcomes two new OIE publications on trade and animal health
Deputy Director-General Alan Wolff spoke at a virtual event on 4 November for the launch of two new publications from the World Organisation for Animal Health (OIE).
At the event, two publications focusing on animal health and trade were launched: (i) the OIE Scientific and Technical Review on “Ensuring safe trade in animals and animal products”; and (ii) the OIE Technical Item 2020 on “Required competences of Veterinary Services for international trade”. Both publications underscore the importance of facilitating safe trade of animals and animal products, and the crucial role that Veterinary Services play in trade. In addition, the publications highlight practical experiences and tools for the implementation of safe trade, all in the context of the international framework of trade rules and international standards underpinning trade.
New WTO paper explores linkages between trade and the spread of diseases of animal origin
The WTO Secretariat has published a new information note about trade issues associated with the spread of diseases of animal origin. The note maps out the international framework in place to address these issues, along with ongoing efforts to ensure safe trade in animals and animal products, including in wildlife.
The report highlights that the Committee on Sanitary and Phytosanitary (SPS) Measures is the forum where WTO members can exchange information and discuss their approaches to SPS measures adopted to address the risk of COVID-19 and other zoonoses, while other WTO committees can serve as discussion fora for related issues. The SPS Committee also provides a “peer-review mechanism” for members to comment on other members’ SPS measures and share relevant information on good practices and scientific evidence, helping to improve the quality of regulation in this area and ensuring that trade measures contribute to fighting diseases of animal origin.
The publication also recognizes that managing risks related to emerging diseases of animal origin requires multi-sectoral cooperation with other international organizations, such as the World Health Organization (WHO), the Food and Agriculture Organization of the United Nations (FAO) and the World Organisation for Animal Health (OIE).
According to both the WHO and the OIE, the COVID-19 pandemic is being sustained through human-to-human transmission and not through international trade in animals and animal products. Trade in animals and animal products can take place safely if risk reduction measures are applied based on international standards. However, as indicated in the document, risks associated with trade in animals and animal products, including wildlife, may increase when animal disease risks are not monitored and controlled.
The report concludes that implementing existing guidance and developing more detailed standards and guidance for particular risk factors requires engagement at the international level, and investment to ensure that domestic, regional and global public, veterinary and environmental health systems are well prepared and have a solid basis for collaboration.
The report can be found at the following link https://www.wto.org/english/tratop_e/covid19_e/resilience_report_e.pdf