WTO fears retaliation against countries providing pandemic subsidies to companies

The huge subsidies provided by governments to their companies to mitigate the impact of the Covid-19 pandemic could trigger a new wave of trade defense measures, including import surcharges and more disputes between countries, analysts say.

In a report on the monitoring of trade in the G-20, the group that brings together the world’s largest economies, the World Trade Organization (WTO) says that so far the moderation of these economies and other members of the organization in trade policy has prevented a “destructive acceleration of protectionist measures” in the midst of the pandemic.

But Oliver Griffiths, head of the UK’s Trade Remedies Authority (TRA), is one of the first authorities in the sector to warn that any maintenance of the significant volume of subsidies provided as part of the response to the pandemic will cause distortions and reactions of countries to protect their industries. Now outside the European Union (EU), the UK has already taken action with an investigation against aluminum imported from China, on suspicion of unfairly low prices.

The EU, in turn, extended for three years the safeguard that protects the steel sector of the 27 member countries. It will only allow an annual increase in imports of 3%, controlling with quotas (entry of a certain volume) until 2024. In the case of Brazil, which exports mainly semi-manufactured products to Europe, necessary for the European industry, the quotas were maintained unchanged for certain products with higher added value.

Source: Valor Econômico

To read the full original article, visit the link:

https://valor.globo.com/mundo/noticia/2021/06/29/omc-teme-retaliacoes-por-apoio-de-paises-a-empresas.ghtml

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