China, US sign UN protocol on mediation despite ongoing trade dispute

China, US sign UN protocol on mediation despite ongoing trade dispute

China and the United States have briefly put aside their escalating trade war and joined 44 other countries in signing a new global protocol on mediation aimed at settling cross-border trade and commercial disputes.

The Singapore Convention, under the United Nations framework, will allow mediation agreements to be recognised and enforced in the courts of all 46 signatories, which include South Korea and India. European Union nations are expected to sign in the next phase.

It was agreed against a backdrop of ongoing tensions between China and the US over tariffs and currency manipulation, and a trade dispute between South Korea and Japan.

Speaking at the signing ceremony, Singapore Prime Minister Lee Hsien Loong said the protocol demonstrated that countries are capable of achieving consensus through effort and creativity, and are open to binding commitments.

He also observed that the established world order of multilateralism is “under pressure”.

“Existing multilateral institutions are not perfect, many are in need of urgent reform, suffer from a loss of confidence, or have practices and structures that are no longer fit for purpose,” Lee said, without elaborating which bodies he was referring to.

He added that the solution would not be to abandon these bodies, but to improve them through reform and bringing them up to date.

“We must make sure they reflect current economic and political realities, and ready them to deal with the new issues created by the progress of technology and globalisation.”

Stephen Mathias, the UN’s assistant secretary-general for legal affairs, said the agreement helped unify mediation rules and remove uncertainty in enforcing mediation agreements.

The protocol contains standardised terms to apply mediation agreements across jurisdictions, and is expected to bolster the use of mediation rather than legal action to resolve trade disputes.

This rare example of international cooperation can be likened to the New York Convention on arbitration, which was adopted by the UN 60 years ago and is now applied by 160 countries.

Singapore has also capitalised on the naming of the convention, positioning itself as the legal hub in the region, in competition with Hong Kong.

The UN’s Commission on International Trade Law, for instance, has signed a memorandum to establish an academy in international dispute resolution in Singapore.

Mediators in Hong Kong said the convention only served to promote their rival city, as Hong Kong professionals remain competitive in the market.

“Lots of cases with a ‘Chinese element’ would pick Hong Kong,” said lawyer Christopher To Wing. “For instance, a US or British firm runs into a dispute with a Chinese firm, they will choose Hong Kong, as the city is close to China.”

But he conceded that more support and funding from the Hong Kong government is needed to catch up with similar promotion efforts by the Singapore government.

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