China coronavirus criticism and Britain’s Huawei 5G ban should not affect WTO bid, says Liam Fox

19-Sep-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

Liam Fox, the British candidate to lead the World Trade Organisation (WTO), said his vigorous criticism of China’s trade policy and its handling of the coronavirus pandemic should not be a disqualifying factor for his candidacy in the eyes of Beijing.

In a hotly-politicised race for the director general hot seat vacated by Roberto Azevedo at the end of last month, candidates have been careful not to appear too close to China, the European Union, or the United States, for fear of alienating any superpower members.

Fox, the former British trade minister, has survived the first cull of candidates, during which the field was cut from eight to five, set to be announced by the WTO later on Friday.

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Mexican candidate Jesus Seade confirmed by text message on Friday that he had been eliminated, verifying earlier reports by POLITICO and Bloomberg that he along with Egypt’s Hamid Mamdouh and Moldova’s Tudor Ulianovschi had not secured enough support among members to move to the next stage.

We need to remember what the WTO is and what the WTO is not. The WTO is about getting trade to move more freely

Liam Fox

Fox came to the race from a tricky political position, having championed Britain’s exit from the European Union and fostered close ties with the Trump administration.

But his strong rebuke of China’s government as well as the British government’s decision to phase out Huawei from its 5G network has “nothing to do with the agenda”, and should therefore be kept on separate tracks, he told the South China Morning Post.

“That has got nothing to do with the agenda I’ve set up for the WTO. This is exactly what I mean by trying to keep the trade agenda separate. It’s not entirely possible to keep it in a sterile environment, but as much as you can,” Fox said.

“We need to remember what the WTO is and what the WTO is not. The WTO is about getting trade to move more freely. It’s about dispute resolution inside the system and continuing liberalisation through negotiation. That is what the WTO does, it is not the [United Nations] Security Council, it is not the UN, it’s not the World Bank, it’s not [the United Nations Conference on Trade and Development].”

In an appearance on Britain’s Sky News in May, Fox accused China of “repression and denial” in its alleged cover up during the early stages of the coronavirus outbreak. China’s lack of transparency, Fox said, will “increase the sense of the rest of the world that China does not want to be a full and free member of the family of nations”.

“The Chinese Communist Party is doing what most totalitarian states do,” Fox said, adding that if China had acted sooner “the number of cases would have been reduced by somewhere between 65 and 95 per cent”.

Fox denied that the statements would impact a relationship with China cultivated over three years as trade secretary, saying: “I had five visits to Beijing and five visits to Washington, and in both sets of visits, as you can imagine, I was being encouraged to criticise the other”.

“I met with President Xi [Jinping] on more than one occasion, and I know most of the senior economic and foreign officials in the government,” he said.

It is highly unlikely for a candidate to alienate the US or China or EU as well and still get the job

Bryan Mercurio

Trade watchers have said it is “highly improbable” for a candidate to secure the top job at the Geneva-based body while falling foul of powerful members.

“It is highly unlikely for a candidate to alienate the US or China or EU as well and still get the job,” said Bryan Mercurio, a trade professor at the Chinese University of Hong Kong. “It’s highly improbable but statistically above zero per cent.”

Nonetheless, Fox has surprised many by making the final five, and now faces off against candidates from Kenya, Nigeria, Saudi Arabia and South Korea in a race to make the final two, with the WTO hoping to appoint a new leader in November.

The director general would inherit the reins of an institution in crisis. The US-China trade war has threatened to tear up the rules of global trade, and while the WTO ruled in favour of a Chinese case against US President Donald Trump’s Section 301 tariffs this week, most do not expect Washington to change course on trade policy at least before November’s US presidential election.

It’s quite clear to anyone that the United States will not make any concessions this side of a presidential election

Liam Fox

Fox said that the next WTO leader must be realistic about what the body can achieve in resolving the dispute, saying that “you can only have [WTO] mediation if countries want to have it”.

“It’s quite clear to anyone that the United States will not make any concessions this side of a presidential election, and it will not be possible until you’ve got a new administration and a new Congress in place… there’s more room to compromise in a new administration,” Fox said.

Trade tensions will only diminish when both sides are faced with enough economic hardship to force them to make concessions, he added.

“Why do trade wars end? Because the proponents find it too expensive to carry them on. So there will come a point where both sides I think will want to diminish the tension,” Fox added. “And I think that is the point where you want to offer good offices to help both sides climb down from a position which is not tenable in the long term.”

Fox said he was “encouraging people to take a look over the edge of the abyss and to say the alternative to this system is one of chaos you would very quickly understand why we had to introduce the WTO in the first place”.

Meanwhile, Fox theoretically backed Hong Kong’s plans to bring a WTO case against the US over orders that goods made in the city must be relabelled as “Made in China” for export to the US from November 9, as part of a move to remove Hong Kong’s special trading status.

“The WTO and its dispute resolution system is specifically set up to ensure that you cannot use might to overcome rules. In fact, I would say that dispute resolution is the single most important value-added element that the WTO brings to smaller members,” Fox said, adding that it would be up to the WTO’s dispute settlement body to adjudicate on the merits of any case.


Category: China

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