Call for reforms at WTO might not change the game
Trade negotiations are replete with strong arm tactics and bullying, and that is the reason why they lack credibility and legitimacy
Pointing “a gun at other party” during negotiations is well established. “For any talks to be successful, no party should point a gun at the other party,” says Wang Shouwen, China’s vice-trade minister. “For any talks to be useful every party needs to keep its word,” he had suggested in an interaction with media persons in Geneva last week. Indeed, trade negotiations are replete with strong arm tactics and bullying. That is the reason why they lack credibility and legitimacy and why there is such a growing backlash against globalization based on trade liberalization.
China is upset with the manner in which Uncle Sam has treated the Middle Kingdom during the four rounds of bilateral meetings this year. It is now busy making a new alliance with the European Union (EU), which is also upset with US President Donald Trump, who described China and EU as “foes” of the US on 15 July. As part of their new bonhomie, EU and China called for reforming the WTO. “After a meeting with China’s premier Li Keqiang in the ornate Great Hall of the People on Monday, Donald Tusk, president of the European Council, called for reforms of the World Trade Organization, including new rules on industrial subsidies and intellectual property rights,” says Financial Times on 17 July. “China has been cultivating EU political leaders and investors as it tries to build a common front against the US tariffs,” the report said. China, however, maintained that “a reformed WTO could not exclude the US or Russia.” “As I said in the beginning of my meeting with the Mr. Tusk and Mr. Jean-Claude Junker (president for the European Commission) our negotiations are not targeted at any third party and cannot be influenced by any third party.” “Leaving behind any other country, let’s not even talk about leaving behind the US or a country located between the European Union and China, is unfeasible. Because this is a multilateral trade agreement,” the Chinese premier maintained.
But behind the scenes, the EU is already preparing the ground for reforming the WTO. It hosted a luncheon-cum-brainstorming meeting of select trade envoys to discuss about the “future of trade governance” in Geneva on Tuesday. Ahead of the meeting it circulated a 54-page report prepared by technical experts on “Revitalizing Multilateral Governance at the World Trade Organization.” These technical experts are insulated from the political realities. Nevertheless, the report calls for “ support for open plurilateralism (involving more than two countries)” and argues that “members need to consider whether all members must participate in the launch of every new (plurilateral) negotiation or initiative.” It recommends “greater pursuance by groups of WTO members (coalition of willing) of open, non-discriminatory plurilateral initiatives offers the opportunity to move forward on issues where concerns about free-riding do not exist or can be addressed.” Such initiatives, it says, “do not require consensus to start”, implying that the multilateral principle of consensus for arriving at decisions must be jettisoned. It wants the WTO Secretariat, which worked behind the scenes to launch the plurilateral initiatives that lacked multilateral approval at the Buenos Aires ministerial meeting last December, must be further strengthened.
Further, the report calls for “a review mechanism that incorporates self-assessment by WTO bodies.” The new work programme must include “subjects that matter to all WTO members”, a mix of old and new topics. The old topics include “eliminate tariff escalation, managing global overcapacity in specific industries, disciplining agricultural subsidies, and protection of intellectual property.” The new subjects include “digital economy-related policies that may distort trade and investment in services, e-commerce regulation and the development of (access to) new technologies.”
In short, the report seems like a dog’s breakfast of plurilateral initiatives to terminate the principle of “consensus” on which the 164-member WTO functions. The EU along with the US foisted the Doha Round of trade negotiations in 2001 promising the developing and poorest countries that their developmental concerns will be addressed. After pocketing the Trade Facilitation Agreement in December, 2013, they junked the Doha Round. And now with China on their side, the EU wants another round of reforms for transforming the WTO that will exclude majority of developing and poorest countries from decision-making at the global trade body. The morale of the story: the more things change the more they remain the same in the neoliberal model of global trade liberalization since 2008.
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