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  Félix Peña

INTERNATIONAL TRADE RELATIONS NEWSLETTER
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009
CREDIBILITY, COLLECTIVE LEADERSHIP AND A FUTURE HORIZON:
Three gains as a result from the WTO Ministerial Conference in Bali.

by Félix Peña
December 2013

English translation: Isabel Romero Carranza


 

The true extent of the results of the Ninth Ministerial Conference of the WTO, held in Bali (Indonesia) from 3 to 6 December, will only be fully appreciated with the passage of time and especially when the commissioned work related to the future of the Doha Round negotiations is resumed.

There are three initial conclusions that can be drawn from the experience of Bali. The three are complementary and are valid to address the future of the WTO, but also in relation to other experiences of international negotiations aimed at improving the conditions and the effectiveness of joint work between nations, whether at the global, the regional or interregional level. Consider, for instance, the case of the approach of the future of the European Union or Mercosur - two regional experiences in process of adaptation to the new realities- or the negotiations between Mercosur and the EU.

The first of these conclusions is that the credibility of an international enterprise such as the WTO must receive constant feedback. It is not an undertaking that has an end product. These evolving processes require a succession of steps that do not respond to predetermined patterns or have a set temporal dimension. These are steps in which political leadership; technical competence and a sense of opportunity make the difference between progress, stagnation or collapse. No result is guaranteed or protected against unforeseen events or against the constant changes of the international dynamics that never stops, especially at a time when the international system is undergoing deep structural changes.

The second conclusion is that the next steps into the future require an accurate diagnosis of where to untie the knots to obtain the desired results and, most especially, an effective collective leadership resulting from the articulation between those who have the role of "facilitators" and those who represent the member countries.

The third conclusion is that, rather than an end result that closes a stage of negotiations, Bali means opening a new phase in which the first task will be to define roadmaps that reflect the many interests involved. In this regard it must be appreciated by the future perspectives it has generated in a key institution of the international trading system and of global governance, which until hours before the conclusion of the Conference seemed doomed to irrelevance.


"No agreement is better than a bad agreement" is a very common phrase among international trade negotiators. It may reflect a tactical position. It entails a public message for the other party or parties involved in that those who express it need to be given more than what is being offered to them. It is a way to pressure in order to improve the compensation in return for what they are willing to grant, that is, to achieve the necessary equilibrium points that enable to successfully conclude a negotiation based on the reciprocity of interests. But it may also reflect a principled or maximalist position. In this case, this phrase reflects the idealization of the possible outcomes. And if so, it is the product of comparing what is being offered with what should be the results to be obtained from the corresponding negotiation based on certain principles. Or the eventual results are visualized based on the optimal: that is, either everything that is desired is obtained, or it is preferable not to get anything.

That phrase has been heard many times during the long journey that the Doha Round has gone through since the year 2001, within the scope of the WTO. In general, it has been based in principled or maximalist criteria, sometimes of dogmatic roots. In Bali, Indonesia, it was mentioned by the Indian ministerial representative in a press conference on December 5, 2013. But based on the results that were finally obtained at the end of the WTO Ninth Ministerial Conference, at the start of December 7, it can be considered that this time it was a phrase that reflected a tactical position.

And most likely this was so because most member countries seemed to be aware that a failure of the Conference could not be good for anyone. It would have involved an explicit display of a deep systemic crisis by leading to a widespread perception of an institution lacking in effectiveness, increasing thus the fear of a dangerous fragmentation of the multilateral system of world trade. In the current international context this could have unpredictable consequences in global governance. The spectrum of the mega preferential trade agreements -specifically the TPP and the TTIP- as a reflection of the logic of fragmentation, would have dominated the global scene after a Bali marked by failure.

This has not happened and it is good news for everybody. Having prevented failure is, in itself, the main result of Bali. But the true extent of the issues agreed in the Ninth Ministerial Conference of the WTO may only be fully appreciated with the passage of time and when the commissioned work is resumed in Geneva, especially regarding the future of pending issues in the Doha Round negotiations (to December 7, such results could be viewed on http://wto.org/).

But perhaps what best reflects the political and practical value of what was achieved in Bali are the words of the President of the Conference, Mr. Gita Wirjawan, Minister of Trade of Indonesia, at the beginning of the closing speech, when he said: "We did it".

The fact is that the Ministers had arrived in Bali amidst a pervasive sense of inevitable failure, which at times increased on the third day of the event. Perhaps that is why the best tribute made in Bali to Nelson Mandela -who passed away on December 6-was recalling one of his emblematic phrases, also evoked by the President of the Conference: "It always seems impossible, until it is done". According to Mandela's view, in the specific case of a divided South Africa, it is necessary to achieve results that reflect the interests and expectations of all involved. This is what was accomplished in Bali.

Three initial and concrete conclusions, intimately associated with each other, may be drawn from the experience of Bali. They refer to credibility, collective leadership and the future horizon. All three are valid to address WTO activities hereinafter. But they are also valid in relation to the development of other experiences of international negotiations aimed at improving the conditions and effectiveness of joint work between sovereign nations, whether at the regional, interregional or global level. Consider, for example, the approach to the future in the case of the European Union or Mercosur -two regional experiences with strong differences but with a common need to address successfully a process of adaptation to the new realities-, or the negotiations between Mercosur and the EU, which also seem better directed after the bilateral ministerial Argentina-Brazil meeting held in Buenos Aires, simultaneously with the Bali Conference.

The first conclusion is that the credibility of an international enterprise, such as the WTO, must receive constant feedback.. This is not an undertaking that has an end product or a guaranteed future. In order to be credible, these kinds of processes require a series of steps that do not respond to previous or theoretical models and that do not have a predetermined temporal dimension. These are steps in which political leadership, technical competence, and appropriate timing make the difference between progress, stagnation or collapse. No result is guaranteed or protected against the unexpected, or against the constant mutations of the international dynamics that never stop, especially at a time when the international system is undergoing deep structural changes, both globally and in each of the regional and interregional spaces.

The second conclusion is that the next steps into the future require an accurate diagnosis of the main knots that would need to be untied in order to move forward and to achieve the desired results, most especially a good collective leadership involving those who have the role of "facilitators" and those who represent the interests of member countries. In the case of the WTO such collective leadership involves a constant and efficient interaction, a dynamic synergy between the appointed Director General -including his main collaborators- and those who represent the member countries in Geneva or where the Ministerial Conference takes place, in this case especially the host country. The contrast between the experience of Bali and other ministerial meetings -including some Summits of Heads of State and not only global or referring to economic issues- is eloquent in this regard.

The homage paid to Ambassador Roberto Azevedo, the new Director General of the WTO, by the President of the Conference and the warm applause of the Ministers that were present at the closing session show that the Brazilian diplomat was able to understand his role and performed it with expertise, commitment and passion. But it also shows that an effective connection with the respective governments was achieved, for which the role of the President of the meeting must have been essential.

The third conclusion is that, rather than an end result that closes a stage of negotiations, Bali means the opening of a new phase of always uncertain results in which the first task will be to define, in the coming months, the roadmaps that reflect the multiple interests at stake. In this sense, Bali must be valued by the perspective of a future horizon it has installed in a key institution of the international trading system and global governance, which until hours before the conclusion of the Ministerial Conference seemed doomed to irrelevance and, eventually, to an inevitable failure.


These three conclusions are good news. After Bali it is now clear that the international trading system will require ongoing coordination of the multiple channels of trade cooperation between the countries involved. Such channels will have, in some cases, a "partial scope" as per the terminology coined in LAIA (ALADI). This is the case of the multiple modalities of preferential agreements, including the so-called new generation mega interregional agreements. In other cases, all countries will be included or, at least, all the countries that are interested, such as in the case of multilateral agreements. But these will be channels that will be inserted in the multilateral institutional framework of the WTO, through which it should be feasible to promote the convergence of the multiple partial actions, guarantee transparency and collective disciplines and provide services for the settlement of disputes, essential for the preservation of relations that are guided by rules and not just by matters of relative power.



Recommended Reading:


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  • Baumann, Renato, "Cadeias globais de valor e complementaridade productiva na América do Sul", ICTSD, Pontes, volume 9, number 10 - November 2013, on http://ictsd.org/i/news/pontes/179985/.
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  • CEPAL, "Promoción del Comercio y la Inversión con China. Desafíos y oportunidades en la experiencia de las cámaras empresariales latinoamericanas", Comisión Económica para América Latina (CEPAL), Santiago de Chile, November 2013, on http://www.eclac.cl/.
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Félix Peña Director of the Institute of International Trade at the ICBC Foundation. Director of the Masters Degree in International Trade Relations at Tres de Febrero National University (UNTREF). Member of the Executive Committee of the Argentine Council for International Relations (CARI). Member of the Evian Group Brains Trust. More information.

http://www.felixpena.com.ar | info@felixpena.com.ar


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