Japan refuses to include a reference to a proposed reform of the WTO’s appellate body in the draft conclusions of an upcoming bilateral summit with the EU for fear of upsetting the US, EURACTIV.com has learned.
Tokyo has come under pressure from Washington to reject European proposals to reform the World Trade Organisation.
According to European officials, fears of upsetting the US President have led Japanese negotiators to reject any reference to a proposed reform of the WTO’s appellate body in the draft conclusions of the upcoming EU-Japan summit that will be held on 25 April in Brussels.
The EU, supported by a dozen countries, presented proposals last autumn to reform the appellate body, a key pillar of the WTO, which can uphold, modify or reverse the legal findings and conclusions of a WTO panel.
“Without this core function of the WTO, the world would lose a system that has ensured stability in global trade for decades,” said commissioner for Trade, Cecilia Malmström, last November.
The proposed reform aimed at convincing the US to lift its opposition to the appointment of new judges for the appellate body, which comprises seven persons in total.
Washington has criticised the appellate body partly for exceeding its mandate. If the US administration continues to block the nomination of new judges, the body will not have enough members to take cases by the end of this year.
The WTO reform is the centerpiece of the European strategy to channel the ongoing US-China trade war through the multilateral system. According to officials, this would help correct China’s unfair trade and economic practices that triggered the dispute, and to convince US President Donald Trump to end his tariff war.
However, Japanese negotiators want to eliminate the mention, so as not to be seen as “unfriendly” to Trump, EU sources said.
The pressure from the US administration is such that Tokyo considers the inclusion of the reference as a “red line”, the officials said. And the pressure has mounted a notch because Japanese prime minister, Shinzo Abe, will visit the White House after the EU-Japan summit.
But the Commission is ready to fight to keep the reform of the appellate body in the draft summit statement.
Officials pointed out that it would be paradoxical that the outcome of the EU-Japan summit would be inferior to the results of the summit with China in regards to the WTO reform.
It is not the first time that Trump interferes in the bilateral relationship between the EU and a third country.
China initially refused to meet the EU’s demands in trade and economy as Beijing was scared of affecting trade talks with the US administration.
Chinese negotiators offered last-minute concession only after EU member states displayed a “strong and united” position and were ready not to sign a joint statement with China, a European official said.