Justice, Peace, Integrity<br /> of Creation
Justice, Peace, Integrity<br /> of Creation
Justice, Peace, Integrity<br /> of Creation
Justice, Peace, Integrity<br /> of Creation
Justice, Peace, Integrity<br /> of Creation

Covid19 puts the WTO in a tight spot

IPS 13.03.2020 Gustavo Capdevila Translated by: Jpic-jp.org

After a few months of the unstoppable expansion of coronavirus around the planet, one of its most notable features has become evident: it is targeting the most weakened entities, not only personal ones but also international ones. And that is what has just happened with the World Trade Organization (English translation by Alissa D'Vale)

The World Trade Organization (WTO) recognized the impossibility of holding its ministerial conference, which was scheduled from June 8th to 11th in the city of Nur-Sultan, the capital of Kazakhstan.

The WTO is not among the esteemed and flourishing multilateral institutions based in the Swiss city, such as the International Labor Organization (ILO), which is 101 years old, or the admirable International Telecommunication Union (ITU), which in May reached its 155 years of life. The WTO was only conceived on April 15, 1994, by the conference of trade ministers held in Marrakesh, Morocco, and took its first steps on January 1, 1995, centered at its current headquarters on the shores of Lake Geneva.

When it reached the age of 25, the celebrations were extinguished as there was little to celebrate in a history of broken promises. The result of Marrakesh had only been possible because the industrialized countries obtained what they wanted from a reduction in tariffs on merchandise, rigor in intellectual property, openness in trade in services, among other forms of liberalization of exchanges and of the economy in general.

In exchange, they promised that in 2001 they would initiate negotiations to also liberalize agriculture, the vital item for developing countries. These negotiations began in 2001, but since the beginning it was evident that the industrialized countries would not give in to open their borders to the entry of products from poor countries, the so-called access to markets, or to reduce subsidies to inefficient farmers, what is called internal aid.

The only area they reluctantly opened was in the elimination of agricultural export subsidies where they committed blatant abuses of commercial arbitrariness.

To amend these infringements, wealthy countries promised to push for a development favorable commercial agenda at the ministerial conference to be held in Doha, Qatar, in November of 2001. But in September of that year, there were the attacks on the Twin Towers in New York, and the international scene was further disrupted with the December invasion of Afghanistan and the preparations for the attack against Iraq two years later.

The Doha Agenda was finally adopted with some favorable purposes to developing countries that have not yet materialized in definitive agreements. The only remaining remarkable thing about Doha is the declaration that protects health over trade.

Since then, the WTO balance has always tilted in favor of the industrialized countries while the aspirations of the developing countries of the Global South meet with the inflexibility of their industrialized counterpart, and the negotiations’ environment is overshadowed by the prevailing uncertainty.

In this regard, it remains to add two more milestones: the incorporation of China in 2001 and the advent of Donald Trump in 2017 with the presidency of the United States (USA).

China promoted benefits for countries in the North and South, while Trump deepened insecurity in trade relations and paralyzed essential activities of the WTO such as the system for resolving differences, a kind of international trade court of justice.

The United States had never been very open to the aspirations of other countries, particularly those of the South, that conspired against its dominant interests. The EU, which pursues the same ends, usually uses less strict methods in the WTO. Therefore, Trump's attacks have unsettled everyone, as well as his action against the Appellate Body – the highest court instance – until achieving its practical disappearance, without explaining what he proposes to replace it with, a system that has been essential for more than two decades to maintain a certain harmony in the trading system.

Trump practices protectionism, with a set of tariff increases against China, in particular, and its European and South American allies, even though he is not alone in some of his policies. With the European Union (EU) and Japan, the alliance that dominated economic activities after World War II (1939-1945) was revived. They are united by the desire to regain industrial dominance in the face of the threat of the affirmed China and of the emerging countries such as India, Russia, Brazil and South Africa.

The EU also supports US intentions to eliminate special and differential treatment, a system that favors developing countries, inherited from the General Agreement on Tariffs and Trade (GATT), WTO’s predecessor (from 1947 to 1995).

This preferential agreement for poor countries was included in the legal texts that make up the legal basis of the WTO multilateral agreements. The US finds support on the intention to ignore it from some developing countries such as Brazil and Costa Rica. Jair Bolsonaro supported Trump in exchange for the influence of the United States in order for Brazil to join the club of rich nations: the Organization for Economic Cooperation and Development (OECD).

Another uncertainty for the WTO comes from the failure of the negotiation on subsidies that would prevent goal 6 of the 14 Goals for Sustainable Development (SDGs), the one dedicated to underwater life. The goal was to eliminate by 2020, the forms of subsidies for overfishing, illegal fishing, unreported and unregulated fishing and to refrain from introducing new subsidies of this nature. It also called for “including special and differential treatment, appropriate and effective for developing countries and least developed countries”, something that the US, the EU and others are now trying to ignore.

Negotiations on fishing subsidies are hampered by the conflicting positions of countries defending millions of artisanal fishermen, such as China and India, and industrialized nations, such as the EU, which have plans for overseas sea-fishing fleets. Other countries, like the US and some in South America, support different proposals.

The problem for the WTO is that the deadlines set by the mandate of the heads of states and governments when approving the SDGs are all overdue. The WTO was thinking about reaching an agreement at the Nur-Sultan ministerial conference as an alternative, using a solid agenda with the negotiators and the same WTO secretariat in the forefront.

Now, the WTO general director, Roberto Azevêdo, has announced that, in consultation with New Zealand's David Walker, president of the WTO General Council – the governing body during the recesses of the ministerial conference, and also with the delegation of Kazakhstan in Geneva – have considered it “not feasible” to hold this conference on the set date in Nur-Sultan and that they will call a meeting of the General Council “as soon as possible” to review the agreements regarding the holding of the ministerial conference.

See the original text in Spanish El Covid19 pone a la OMC en una encrucijada

Leave a comment