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Key elements of the international system

68 - European policy on the World Trade Organization

Grade: B
Unity 5/5
Resources 4/5
Outcome 4/10
Total 13/20
Scorecard 2010/11: A- (17/20)

Russia joined the WTO but EU officials believed Moscow was not following all of its rules. International trade negotiations remained deadlocked.

After negotiations concluding in 2011, 2012 saw Russia enter the WTO in August, a long-term goal for Europeans. But, by the end of the year, EU officials were accusing Russia of taking a series of protectionist measures that conflicted with its WTO commitments and raised the possibility of a formal European complaint. The issue was one of a number that overshadowed the EU–Russia summit in December.

If Russia’s behaviour surprised the EU, the fact that no progress was made towards the conclusion of the Doha Development Round was less unexpected. The Mexican presidency of the G20 raised the issue, but it had no impact, not least because of the US elections, which made an agreement unlikely. This failure is a disappointment for WTO head Pascal Lamy, who is stepping down in 2013. None of the nine candidates bidding to replace him are from EU member states, so Europe will soon hold one fewer top multilateral position.

In the absence of progress on Doha, EU member states focused on the potential for an Atlantic free-trade area, which will be a priority for the British G8 presidency in 2013. In the meantime, the EU concluded negotiations for a free-trade area with Singapore and also concluded negotiations with Ukraine, but the deal is on hold due to wider tensions over the rule of law (see component 47).

The WTO passed a long-awaited ruling on US subsidies to Boeing in March, following a similar ruling on European subsidies to Airbus. While the WTO concluded that both the EU and the US had unfairly subsidised the aircraft makers, the two sides continued to argue over the matter through the year. Conversely, the US and the EU cooperated with Japan to raise Chinese restrictions on the export of rare earth minerals, and China clashed with Western powers over solar-industry subsidies. More positively, the EU persuaded the WTO to allow it to offer Pakistan “trade aid” (preferential treatment for some exports) to help alleviate the country’s economic distress.