A multilateral steel group mandate was not renewed in Japan, says the deputy director of the National Economic Council during a think tank discussion Wednesday.
The G20 didn’t renew the mandate for the Global Forum on Steel Excess Capacity during the group’s June 28-29 Osaka, Japan, summit upon the objection of one delegation, National Economic Council Deputy Director Kelly Ann Shaw said Wednesday.
“There was one delegation who was not prepared to do that,” she said during an event at the Center for Strategic and International Studies (CSIS). “I think it was a shame and a missed opportunity.”
The group was established in September 2016 during a G20 summit in Hangzhou, China. The forum was created to develop policy approaches to reduce excess capacity in the global steel market, but has made little progress toward that goal since its inception.
Its mandate expires in November, but it could be renewed before then.
“While we note the progress made so far by the Global Forum on Steel Excess Capacity, we ask relevant ministers of the members of the GFSEC to explore and reach a consensus by fall 2019 on ways to further the work of the forum,” the G20 Osaka Leaders’ Declaration states.
Further, the group failed to reach agreement on language for unfair trade practices, Shaw said.
“Forced tech transfer, IP theft, some of the more relevant challenges that we’re facing right now, in real time, would’ve been appropriate for us to opine on at the G20,” she said.
One silver lining in the leaders’ declaration is a call for reform of the World Trade Organization, Jennifer Hillman, Council on Foreign Relations senior fellow for trade and international political economy, said during the CSIS event.
But Hillman also pointed to the United States’ ongoing criticism of the WTO Appellate Body (AB) and said the G20 should undertake “urgent work” to find a Plan B, should the AB cease to function in December, which would happen if two of the three existing members on the seven-slot panel depart as scheduled with no replacements selected.
The U.S. has been blocking the selection process for AB panelists essentially since the start of the Trump administration.
“We have … an excellent panel process,” Hillman said. “It’s going to keep right on going. So … I don’t think you see any change in the panel process. The question is going to come: What happens to a panel report after December 11?”
There are several potential options should the AB cease to function, she said.
One is that panel reports are simply adopted by the WTO, with no ability for parties to appeal; another option is the notion that parties would file notices of appeal to kill panel rulings that they don’t agree with; and the third option is for WTO members to utilize Article 25, which provides for an arbitration process in lieu of the standard AB process, Hillman noted.
The EU has put forth a proposal in which the arbitrations would be done by former AB members and the staff of the arbitration would be the AB secretariat, which would “effectively keep the Appellate Body on life support” under the auspices of the arbitration rules, she said.
However, this would be a “case-by-case” situation in which all parties would have to agree to such a structure, “so you don’t know whether the United States would ever agree to enter into this,” Hillman said.
She added, “I think that’s the most realistic [scenario] for what’s likely to happen after December 11.”
