Karl Brauer, Deputy Director-General, WTO

With great concern, trade law expert Karl Brauer described how current developments are weakening international trade agreements and challenging proven procedures. Until now, he said, the auto industry in particular had benefitted from the stability and reliability these agreements provided. Now it was feeling the pain from the risks that occur when individual states opt out of successful, proven practices.

“Tariffs on automobiles were capped, and all market participants could depend on that,” said Brauer. The USA and the EU had voluntarily agreed import duties of 2.5 percent for European vehicles, and 10 percent for US cars in Europe. “Today we’re seeing a renaissance of tariffs, with ugly impacts on growth, GDP and investment.” For decades, the WTO’s proven dispute resolution system had prevented this kind of proliferation and created a common ground in disagreements. “If a WTO member thought a prior decision was wrong, it could request a correction,” Brauer said. And when dumping suspicions arose or adjustments were needed after new EU members joined, the WTO was a universally recognised arbitration body.

“For 20 years, that worked really well,” Bauer continued. “The WTO Arbitration Court negotiated 540 cases, and 95 percent of decisions were adopted by the contracting parties.” He said the WTO provided transparency, predictability and legal certainty – if procedures were adhered to. But now this system was in serious danger: of seven arbitration court posts, four were currently vacant; the USA was blocking new appointments, accusing the WTO of erroneous and partisan decisions.

So far, the WTO Director-General warned, the arbitration chamber was still operative. But it would not survive another departure, and the reduced number of members was already limiting its capacity to resolve disputes. “There is a backlog of cases. If the blockade is not resolved, that would be a severe blow for international law enforcement. Illegal activities could no longer be challenged and corrected, and companies would be exposed to numerous disadvantages.”

Can that scenario be averted? “The WTO is undergoing a process of reform. The G20 have agreed, and the EU is playing a leading role. Their proposal will take US complaints on board, and the USA are contributing their own ideas.”

Brauer closed with an appeal to all participants to lobby energetically for a multilateral trading system in talks with government representatives. “It has helped generate growth and prosperity all over the world. And it has given millions of people the opportunity to work their way out poverty by joining the global economy.”

Automotive Summit 2018 – Executive Summary

In early December 2018, over 600 automotive experts from all over the world – including manufacturers and suppliers, tech and energy companies, politicians and associations – attended the auto industry summit in Wolfsburg, Germany. From 3 – 5 December, the industry’s big hitters discussed strategies, concepts and technologies for tomorrow’s automobiles and the future course of their industry.

We’ve compiled the highlights from the Handelsblatt Auto Summit 2018 in an interactive follow-up report.