Question

 

PART 1 :-Main idea: Research and explain the response from the World Trade Organization (WTO) to disputes involving tariffs.

Requirements:

a) Provide a summary of a tariff situation that has been brought before the WTO for evaluation. What has been the response of the WTO? Has the case/situation has been resolved? If so, how? What are the controversies that are present?

b) Use the WTO.org webpage and at least one Wall Street Journal article to support your discussion.

classmate posting :-

During the COVID 19 crisis, the WTO is no different than other entities being affected by the pandemic. When disputes such as tariffs arise, The WTO underscores the rule of law, and it makes the trading system more secure and predictable. There are also appeals possible based on points of law. If disputes arise from one country adopts trade policies or other measures, other countries may question this as breaking the WTO agreement or “failure to live up to their obligations.” There also is a possibility that another third-party group of countries can also declare that the country under dispute has formed interest and have privileged rights over others.

In 2020, there were tariffed items such as medical supplies, medical equipment, medicine, and personal protective products, as well as selected COVID 19 related products and all other medicinal products including selected medical products and supplies there was also an HS classification reference for COVD -19 medical supplies set by the World Customs Organization. The list of classifications is “ mainly intended to facilitate product classification for customs purposes” (World Trade Organization, 2020).

These special tariffs are focused explicitly on medical goods in tackling COVID-19. In Summary, Germany, the US, and Switzerland supplied 35% of medical products with China, German, and Germany, exporting 40% of the personal protective equipment. Estimates of imports and exports total about 2 trillion, including the trade that is worth close to “5% of total world merchandise trade in 2019” (World Trade Organization, 2020). If appeals are requested after dispute settlements arise is an average of one year without an appeal and one year and three months with an appeal. Much time that is dedicated on appeals are after a dispute settlement that has already taken place anywhere from 60-105 days in which a [anal has reviewed the case in mediation to find if there are any ways of rectifying the claim that can be made from the original dispute. If a country is found deficient in the complaint or ruling, they must follow whatever recommendations that have been given to them from the WTO.   

References

(2020). Trade in medical goods in the context of tackling Covid-19. Retrieved from https://data.wto.org/

World Trade Organization. (2020, July 17). Retrieved July 17, 2020, from World Trade Organization/Data: https://data.wto.org/

part 2 :- REPLY:- to the classmate posting

Requirements:

a) Respond to one of the issues discussed by a classmate. Does the position taken by the WTO on the tariff issues highlighted in their post have the potential to impact all countries equally or does there seem to be favoritism towards a certain ‘type’ of nation. Explain how you arrive at that conclusion with logical analysis.

b) minimum of 130-150 words. put ideas into your own words to demonstrate understanding. Outside sources not required. Cite any sources used in APA.

Answer 1

TARIFFS

Customs duties on merchandise imports are called tariffs. Tariffs give a price advantage to locally-produced goods over similar goods which are imported, and they raise revenues for governments. One result of the Uruguay Round was countries’ commitments to cut tariffs and to “bind” their customs duty rates to levels which are difficult to raise. The current negotiations under the Doha Agenda continue efforts in that direction in agriculture and non-agricultural market access.

Tariff cuts

Developed countries’ tariff cuts were for the most part phased in over five years from 1 January 1995. The result is a 40% cut in their tariffs on industrial products, from an average of 6.3% to 3.8%. The value of imported industrial products that receive duty-free treatment in developed countries will jump from 20% to 44%.

There will also be fewer products charged high duty rates. The proportion of imports into developed countries from all sources facing tariffs rates of more than 15% will decline from 7% to 5%. The proportion of developing country exports facing tariffs above 15% in industrial countries will fall from 9% to 5%.

Dispute settlement

Resolving trade disputes is one of the core activities of the WTO. A dispute arises when a member government believes another member government is violating an agreement or a commitment that it has made in the WTO. The WTO has one of the most active international dispute settlement mechanisms in the world. Since 1995, 596 disputes have been brought to the WTO and over 350 rulings have been issued.

How are disputes settled?

Settling disputes is the responsibility of the Dispute Settlement Body (the General Council in another guise), which consists of all WTO members. The Dispute Settlement Body has the sole authority to establish “panels” of experts to consider the case, and to accept or reject the panels’ findings or the results of an appeal. It monitors the implementation of the rulings and recommendations, and has the power to authorize retaliation when a country does not comply with a ruling.

COVID-19 and world trade

The COVID-19 pandemic represents an unprecedented disruption to the global economy and world trade, as production and consumption are scaled back across the globe.

One of the most effective means of addressing this crisis is through timely, accurate information. An informed public is better positioned to make sound decisions including on questions related to trade. This is why we have created this dedicated page on the WTO website. It will provide up-to-the minute trade-related information including relevant notifications by WTO members, the impact the virus has had on exports and imports and how WTO activities have been affected by the pandemic.

TRADE IN SERVICES IN THE CONTEXT OF COVID-19

• Services sectors have been heavily affected by the COVID-19 pandemic. Tourism, transport and distribution services, for example, have suffered as a result of mobility restrictions and social distancing measures imposed for public health reasons.

• Given the role of services in providing inputs for other economic activities, including connecting supply chains and facilitating trade in goods, disruptions in services supply are having a broad economic and trade impact.

• The type and extent of effects on trade in services vary by sector and mode of supply. Trade in services that involves proximity between suppliers and consumers has been severely impeded. GATS mode 2 (i.e., supply in the context of the movement of consumers abroad) and mode 4 (involving the temporary movement of natural persons) have been largely paralysed.

• The crisis is leading to a greater focus on online supply in sectors such as retail, health, education, telecommunications and audiovisual services. Suppliers are accelerating efforts to expand their online operations and consumers are adopting new habits that may contribute to a long-term shift towards online services. In the future, increased supply of services through digital networks could increase trade through mode 1 (cross-border supply).

• The increased use of online services during the COVID-19 pandemic has accentuated technology and connectivity disparities, as online classes are not feasible for students without computers, and telework is not an option for employees without broadband. Operators in developed and developing countries suspended data limits and boosted data capacity during the pandemic, and many governments issued additional wireless spectrum to further increase capacity.

• Overall, the crisis is further underscoring the importance of services that enable online supply, such as telecommunications and computer services, as well as the broader infrastructural role of financial, transport, distribution and logistics services in facilitating merchandise trade and economic growth. Services sectors, and the creation of conditions conducive to trade in services, will be key to the recovery from the economic slowdown.

according to question

In 2020, there were tariffed items such as medical supplies, medical equipment, medicine, and personal protective products, as well as selected COVID 19 related products and all other medicinal products including selected medical products and supplies there was also an HS classification reference for COVD -19 medical supplies set by the World Customs Organization. The list of classifications is “ mainly intended to facilitate product classification for customs purposes”

WTO issues new report on worldwide trade in COVID-19 medical products

The WTO Secretariat has released a new report on trade in medical products critical for the global response to the COVID-19 pandemic. The report traces trade flows for products such as personal protective products, hospital and laboratory supplies, medicines and medical technology while providing information on their respective tariffs.

Trade in medical products which have now been described as critical and in severe shortage during the COVID-19 crisis⁽¹⁾ totalled about US$ 597 billion in 2019, accounting for 1.7% of total world merchandise trade according to the report. The ten largest supplying economies accounted for almost three-quarters of total world exports of the products while the ten largest buyers accounted for roughly two-thirds of world imports.

Commitments made under various WTO negotiations and agreements have helped slash import tariffs on these products and improve market access, with the average tariff on COVID-19 medical products standing at 4.8%, lower than the 7.6% average tariff for non-agricultural products in general. The statistics show that 52% of 134 WTO members impose a tariff of 5% or lower on medical products. Among them, four members do not levy any tariffs at all: Hong Kong, China; Iceland; Macao, China; and Singapore. The report, however, also identifies markets where tariffs remain high. Tariffs on face masks, for example, can be as high as 55% in some countries.  

Key points

• Germany, the United States and Switzerland supply 35% of medical products; ⁽²⁾
• China, Germany and the United States export 40% of personal protective products;
• Imports and exports of medical products totalled about US$ 2 trillion, including intra-EU trade, which represented approximately 5% of total world merchandise trade in 2019;
• Trade of products described as critical and in severe shortage in the COVID-19 crisis totalled about US$ 597 billion, or 1.7% of total world trade in 2019;
• Tariffs on some products remain very high. For example, the average applied tariff for hand soap is 17% and some WTO members apply tariffs as high as 65%;
• Protective supplies used in the fight against COVID-19 attract an average tariff of 11.5% and go as high as 27% in some countries;
• The WTO has contributed to the liberalization of trade in medical products in three main ways:
  • The results of tariff negotiations scheduled at the inception of the WTO in 1995;
  • Conclusion of the plurilateral sectoral Agreement on Pharmaceutical Products (“Pharma Agreement”) in the Uruguay Round and its four subsequent reviews;
  • The Expansion of the Information Technology Agreement in 2015