Emmanuel Macron said the World Trade Organisation (WTO) is not working and that several countries are breaking away from it, but in Geneva European Trade Commissioner Maroš Sefcovic renewed the EU’s commitment to multilateral world trade rules.
European Trade Commissioner Maroš Šefčovič underscored EU commitment to World Trade Organization rules during a visit to the body in Geneva on Tuesday, brushing aside scepticism about adherence to the body’s rules expressed earlier this week by French President Emmanuel Macron.
“We are committed to the proper functioning and revitalisation of the World Trade Organisation,” he said before meeting director-general of the WTO Ngozi Okonjo-Iweala, adding: “If the WTO is to remain the most relevant forum for the world trading system, it must address all the issues we face in the current trading system, in the interests of all.”
The statement of faith contrasted sharply with that of the French President who the day before, in front of French ambassadors, denounced the shackles of international trade rules that neither the US nor China respect.
“We must defend our ability to produce in every part of the major value chain in Europe,” Macron said, adding that EU tariffs imposed on Chinese electric vehicles did not go far enough. “This is quite simply what the US has been doing for decades, for itself and with its partners, within the [North America Free Trade Agreement].”
In 2018 the free-trade agreement between the US, Canada and Mexico raised the bar on how many automotive components must emanate from within the bloc.
Local production is also favoured by the Americans through the Inflation Reduction Act adopted in 2022, which grants tax incentives to battery manufacturers if they use raw materials sourced from within the US.
China, for its part, is asking telecommunications companies to phase out the use of foreign chips. It also increasingly wants to control the value chain on its own soil. Under WTO rules, such measures promoting local production are deemed discriminatory.
“At a time when the rules of the WTO are no longer respected by either China or the US, we will continue to do so, but on our own. It’s not working,” Macron said.
In Geneva, Sefcovic said that for the WTO “to remain the most relevant forum for global trade, we must reinvent the WTO so it can successfully overcome the problems we face in today’s trading system – to the benefit of all.”
A fervent supporter of free trade within a multilateral framework, the EU has committed itself in recent years to pushing forward the reform of the WTO’s Dispute Settlement Body blocked by the Americans, and to adopting new rules, notably on subsidies and overfishing.
However, with Donald Trump soon to take over the reins of US trade policy with a protectionist agenda, the WTO system will likely remain stymied.
