On the occasion of its 30th anniversary, the World Trade Organization (WTO) has chosen "re-globalization" as its theme to explore how to make trade more inclusive.
Zhang Xiangchen, deputy director-general of the World Trade Organization (WTO), said in an interview with the first financial reporter that "re-globalization" means that we hope that more developing countries, especially African countries, can participate, integrate into and benefit from this new round of globalization.
At present, it is necessary to see that the WTO itself is also facing new problems, such as more and more disputes over "green subsidies" for new energy vehicles, but the WTO still needs to establish a complete set of trade frameworks or agreements to deal with climate change.
In this regard, Zhang Xiangchen told reporters that the WTO has its own rules on subsidies, but in the face of the current new situation, that is, what is a green subsidy, there is no consensus among all parties.
"If you want to solve this problem, you need to sit down and discuss what is green subsidies and what is bad subsidies, but there is no such condition at present, and you may need to wait until a certain time is ripe for everyone to discuss [the issue], rather than relying on bilateral trade frictions or unilateral actions, which may require a tortuous process." He explained.
How to "re-globalize"
Since the establishment of the WTO in 1995, global trade has expanded rapidly and become increasingly interconnected. WTO data shows that the international trading system has lifted 1.5 billion people out of absolute poverty, opening up new opportunities for businesses, workers and consumers. At the same time, there is a perception that the benefits of trade are not always shared equally. This needs to change.
Zhang Xiangchen told the first financial reporter that in the last round of globalization, the benefits brought by globalization were uneven, and some countries benefited a lot, while others had less.
"We see opportunities in this round of 're-globalization'." For example, in terms of supply chain adjustments, some are due to technological developments, some are due to changes in labor costs, and some are due to geopolitical tensions.
He further explained that in this context, many multinationals have changed their mindset in the first round of globalization, which was to put efficiency first, but now they have to strike a balance between profit and security, and these multinationals are more concerned about security, so they may adjust the allocation of resources in the global supply chain, which gives some developing countries an opportunity.
"In the case of China, for example, there is a dispute between China and the EU over the issue of electric vehicles, so some companies have had to move production from China to other developing countries." For example, he said, Morocco has recently attracted a lot of investment from China in electric vehicles, because there are no tariff barriers for production and exports from Morocco to the EU.
"These are just a few examples, namely that some other developing countries can also attract significant investment from China and other countries." That's what WTO Director General Iweala is looking at, he said, is to try to take advantage of the reallocation of resources, to catch up with these digital transformations and green transitions, and to some extent integrate global value chains, trying to benefit from these new dynamics.
To help African countries move forward in supply chains and global value chains, Zhang Xiangchen said that the first step is to integrate into global value chains.
He cites the example of China-made iPhones, which started with a small share of the value chain, to when experts recently re-examined the iPhones, they found that China can already make more money from making each iPhone.
"If you're part of the global value chain, you have the opportunity to keep improving." He explained that many parts can be produced in China without having to be imported from other countries.
How to look at the issue of "green subsidies".
In addition to "re-globalization," the WTO also has to face a number of new and growing challenges.
As the green transition deepens, countries have adopted a variety of measures to combat climate change, which range from environmental protection to industrial and international trade impacts. Some experts pointed out that so far, green subsidies are more of a policy concept, mainly related to subsidies to deal with climate change, and there has been controversy in recent years.
At the same time, it can be seen that the number of cases related to subsidies for new energy products has been increasing in the WTO recently. For example, in March this year, in order to protect the rights and interests of China's new energy vehicle industry development, China resorted to the United States' Inflation Reduction Act (IRA) on new energy vehicle subsidies and other measures to the World Trade Organization (WTO) dispute settlement mechanism. Since China failed to reach a solution with the US side through consultations, on July 15, China submitted a request to the WTO to establish an expert group.
The Ministry of Commerce also said in a statement that China agrees that WTO members implement industrial subsidies in a manner consistent with WTO rules, support the green energy transition, and promote economic and social development. The Ministry of Commerce once again urged the US to abide by WTO rules and stop abusing industrial policies to undermine international cooperation on climate change.
Judging from the rules, the WTO does not have different special provisions on subsidies based on whether they are related to environmental protection. At present, under the WTO Agreement on Subsidies and Countervailing Measures, subsidies are divided into two categories: prohibitive subsidies and actionable subsidies. Among them, prohibitive subsidies mainly include import substitution subsidies and export subsidies, which are completely prohibited in principle. In the case of actionable subsidies, affected countries can conduct countervailing investigations, express concerns in the relevant WTO committees, and initiate litigation through the WTO dispute settlement mechanism.
There are also some developments within the WTO. For example, at the meeting of the WTO Trade and Environment Committee in June, the African Group reiterated its call for a realignment of WTO rules, such as those on subsidies and investment that restrict developing members from developing industries in developing industries.
The African Group expressed the need to "improve" WTO rules so that developing countries could have the policy space to pursue green industrialization. The African, Caribbean and Pacific Group of Nations, represented by Samoa, expressed support at the meeting, saying that such reforms were essential given that developed countries were already using "discriminatory" green technology policies such as subsidies, local content requirements and State aid to improve their competitiveness.
Zhang Xiangchen told reporters that the reason why Africa is more anxious is that the actions taken by some members have a great impact on African trade, but the large members are more concerned about the impact of policies on their important trading partners.
He said there needs to be more of a collective voice, or more facts and research data on the table for everyone to balance, "and we're in the middle of that transition." ”
(This article is from Yicai)