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  Félix Peña

INTERNATIONAL TRADE RELATIONS NEWSLETTER
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009
SHORTCOMINGS OF WORLD TRADE GOVERNANCE:
Contributions for the debates prior to the Buenos Aires WTO Ministerial Conference

by Félix Peña
January 2017

English translation: Isabel Romero Carranza


 

In addition to the results achieved in the ongoing negotiations in Geneva under the Trade Negotiations Committee, the WTO's 11th Ministerial Conference, to be held in Buenos Aires from 11 to 14 December, provides an opportunity for prior discussions on some of the most significant shortcomings of the global trading system.

In this sense, providing constructive ideas for the future of the international trading system, both at the global level and in the multiple regional and interregional spaces, can prove a valuable contribution during the preparatory period of the Conference.

Argentina as the host country of the WTO ministerial meeting, together with Latin American countries with a strong role in the development of the GATT-WTO system, can play an important role in promoting such discussions.

At least three issues deserve special attention in these recommended debates that should precede the Buenos Aires Ministerial Conference.

The first is how to make the benefits of global and regional international trade reach broader sectors of the populations of the WTO member countries, especially for their positive effects on job creation and social wellbeing.

The second issue relates to the necessary balance and convergence between global rules and institutions and those resulting from the multiple modalities of regional and interregional preferential agreements.

The third question is how to generate rules that facilitate and promote the projection to the world of SMEs, especially those of developing countries.

Later, in 2018, following the WTO's 11th Ministerial Conference, the G20 Summit will provide another opportunity for Argentina and the region to show their capacity to encourage debates on viable initiatives aimed at facilitating the coordination of a global order that promotes peace and development.


All indicates that when the WTO's 11th Ministerial Conference takes place in Buenos Aires between 11 and 14 December an environment of confusion and uncertainty will continue to prevail in the world, both politically and economically (on WTO conferences refer to https://www.wto.org/). It is even possible that this situation has accentuated. This will also affect the perception of the future of international trade governance and, in particular, its rules and institutions.

Thus, the idea of the exhaustion of the global order that has prevailed for the last seven decades will probably be reinforced. This order reflected the distribution of power among nations resulting from the end of World War II and subsequently of the Cold War. It also reflected the effects of decolonization and globalization, as well as the gradual emergence of new relevant players in the global competition for resources and markets and, especially, spaces of power.

Such order had moments of unipolarity, others of bipolarity, and even of "oligarchic condominium". It was then easier to identify the country or countries that had sufficient relative power to perceive themselves -and, above all, to be perceived- as "rule makers" in the international system. However, in recent years it has become increasingly difficult to identify which countries have sufficient power to agree on rules that ensure at least a relative world order. Perhaps this is one of the causes that can explain, largely, the atmosphere of confusion and uncertainty that prevails in the world today.

Hence, in addition to the results achieved in the negotiations already initiated in Geneva under the WTO's Trade Negotiations Committee (TNC) with regard to the agenda of the Ministerial Conference and specific agreements that may be reached -(on the role of the TNC see https://www.wto.org/)- the Buenos Aires meeting will provide an opportunity for prior discussions on some of the most significant shortcomings of the world trading system.

If these discussions are broad in scope, involving a significant number of countries and actors in international trade relations, they can contribute to generate ideas that help strengthen the effectiveness, efficiency and, above all, the social legitimacy of what is finally agreed in December in Buenos Aires. In this sense, bringing forward constructive ideas for the future of the international trading system, both at the global level and in relation to the many regional and interregional agreements, would prove a valuable contribution in the preparatory period of the Conference.

Argentina as the host country of the WTO ministerial meeting, together with the Latin American countries that have played a major role in the development of the GATT-WTO system (such as Brazil, Chile, Colombia, Costa Rica, Cuba, Mexico, Peru and Uruguay, among others), can play an important role in the development of such debates. Today, these countries have the possibility of developing future mutual-gain trade relations with a very large number of countries in all regions of the world, if not with all of them.

This poses a great challenge for the participants of the debates that are held, who should be very different in their perspectives and interests and should come from the political and governmental sphere as well as from the entrepreneurial, social, academic, and action-oriented spaces of thought.

Without overlooking others, at least three issues deserve special attention in the discussions that should precede the next WTO Ministerial Conference.

The first concerns how to make the benefits of international trade reach broad sectors of the populations of the WTO member countries, in particular because of their positive effects on the generation of sustainable jobs and social wellbeing. This includes ways of involving all social sectors in the decision-making process, both at the level of each country and of the different international institutions and, in particular, ensuring greater transparency in the different negotiating processes. For example, the fact that negotiating offers are not disclosed in time or that their real scope and the "small print" are only revealed when the negotiations are at an advanced stage -as is the case in some ongoing negotiations, such as those between Mercosur and the EU-, or have already been concluded -as happened in the negotiations of the TPP-, are practices that today can be considered obsolete. In any case, they contribute to the skepticism and even the bad mood of citizens regarding such negotiations, something that can be observed today in many countries.

In this sense, how to achieve a "WTO of the people" should a priority objective, almost the main purpose of the Ministerial Conference of Buenos Aires. It would imply taking concrete steps to eliminate the "transparency deficits", one of the reasons that can help explain "the anger of societies," as Enrique V. Iglesias emphasized in his speech at the last CAF Conference and the Inter-American Dialogue held in Washington on September 7 and 8, 2016. (On the Conference, see http://www.thedialogue.org/event/caf20/ and the video with Iglesias' intervention on https://www.youtube.com/watch?v=z5onbLInBvs). Another aim would be to counteract the growing tendency to perceive globalization and some of the free trade agreements as understandings for the mutual benefit of the elites involved in each country, as noted by Larry Summers (see his article "Global trade should be remade from the bottom up" in the Financial Times of April 4, 2016, https://www.ft.com/).

The second issue relates to how to achieve the necessary balance and convergence between global rules and institutions -such as those of the GATT-WTO- and those resulting from the multiple modalities of regional and interregional preferential agreements -such as, for example, the Mercosur, the Pacific Alliance, the EU and the ASEAN, among many others, and the TPP and the possible interregional agreement between the Mercosur and the EU. Otherwise, the current trends towards the fragmentation of the international trading system, with the ensuing impact on the effectiveness of the world order, will be difficult to avoid. In this sense, one of the main themes to be addressed in the discussions should be how to achieve a balance between the requirements of flexibility of the rules and institutions operating in dynamic and complex contexts with those of predictability necessary for the adoption of decisions for productive investment that generate sustainable trade and employment.

The third question is how to create policies and rules that facilitate the projection of SMEs to the world, especially those from developing countries. The image of a WTO perceived as only benefiting large firms from the more developed countries does not help with the necessary social support for the world trading system. On the contrary, what is needed is a WTO that is perceived as the place for promoting rules and institutions that facilitate and encourage the growing internationalization of SMEs, for example, through their insertion in transnational productive chains that include SMEs from other countries.

In this perspective, it would be possible to discuss how to achieve a growing interaction between the WTO and institutions such as the International Trade Center, the FAO, the ILO and the UNCTAD, global and regional development financing institutions, and those of the corresponding integration processes. Such coordination could favor the promotion of different modalities of sectoral agreements to encourage and facilitate the development of productive networks among SMEs in different countries.

In 2018, after the WTO Conference, the G20 Summit will provide another opportunity for Argentina and the region to demonstrate their ability to stimulate debates on viable initiatives aimed at facilitating the conciliation of a global order in which peace and development prevail. These two events will require a joint contribution of the public, academic and social sectors (especially businesses and trade unions). Perhaps achieving such a coordinated contribution could be the main social result with political scope that both events would produce in our country and in our region.


Recommended Reading:


  • Baldwin, Richard, "The Great Convergence. Information Technology and the New Globalization", The Belknap Press of Harvard University Press, Cambridge Massachusetts - London, 2016.
  • Chaisse, Julien, ""TTIP: ¿hacia el caso de otro paradigma comercial", en Revista Puentes, ICTSD, Ginebra, 22 de diciembre 2016, en http://www.ictsd.org/.
  • Eberstadt, Nicholas, "Men Without Work. America's Invisible Crisis". Templeton Press, West Conshohocken, PA., 2016.
  • Friedman, Thomas L., "Thank You for Being Late. An optimistic's guide to thriving in the age of accelerations", Farrar, Straus and Giroux, New York 2016.
  • García Moritan, Norberto, "Empieza un año de gran actividad diplomática a nivel global", en el diario "El Cronista", 26 de diciembre, p.15, en http://www.cronista.com/.
  • Harford, Tim, "MESSY. The Power of Disorder to Transform our Lives", Riverhead Books, New York 2016.
  • Jawara, Fatoumata; Kwa, Aileen, "Behind the scenes at the WTO. The real world of international trade negotiations. The lessons of Cancun", Zed Books, London - New York 2004.
  • Klich, Ignacio; Mendiola, Luis (compiladores), "Irak, Siria y el Califato, ¿Un nuevo Medio Oriente?", CARI, Comité de Asuntos Africanos, de los Países Árabes y Oriente Medio, Buenos Aires 2015.
  • Lester, Simon; Mercurio, Bryan; Davies, Arwel, "World Trade Law. Text, Material and Commentary", Oxford and Portland, Oregon, 2012.
  • Li, Cheng, "Chinas Politics in the Xi Jinping Era. Reassessing Collective Leadership", Brokings Institution Press, Washington DC. 2016.
  • Low, Patrick, "Repensar los servicios en un mundo en constante cambio", en Revista Puentes, ICTSD, Ginebra, 22 de diciembre 2016, en http://www.ictsd.org/.
  • Navarro, Peter, "The Coming China Wars. Where they will be fought. How they can be won", FT Press, Pearson Education LTD, Upper Saddle River, NJ, 2008.
  • Navarro, Peter W.; Autry, Greg W, "Death by China. Confronting the Dragon - A Global Call to Action", Pearson Education, Inc., Upper Saddle River, NJ., 2011.
  • Navarro, Peter, "Crouching Tiger. What China's Militarism means for the world", Prometheus Books, New York 2015.
  • OIT Américas, "La promoción del trabajo decente en las cadenas mundiales de suministro en América Latina y el Caribe", OIT, Oficina Regional para América Latina y el Caribe, Informes Técnicos, 2016/1, en http://www.ilo.org/.
  • Racovschik, María Alejandra; Raimundi, Carlos (compiladores), "¿Fin de Ciclo o Paréntesis en la Región? Balance de la última década y reflexiones sobre el nuevo escenario para el Mercosur", FLACSO Argentina, Área Estado y Políticas Públicas, Documento de Trabajo Nº 4, Buenos Aires 2016, en https://issuu.com/.
  • Shteyingart, Gary, "Super Sad True Love Story", Granta Books, London 2010.
  • Suominen, Kati, "Coherencia e inclusión en el sistema de comercio mundial en la era del regionalismo", en Revista Puentes, ICTSD, Ginebra, 22 de diciembre 2016, en http://www.ictsd.org/
  • Vance, J.D., "Hillbilly Elegy. A Memoir of a Family and Culture in Crisis", Harper, New York 2016.
  • Van den Bossche, Peter; Zdouc, Werner, "The Law and Policy of the World Trade Organization", Cambridge University Press 2013.
  • Van den Bossche; Prévost, Denise, "Essentials of WTO Law", Cambridge University Press 2016.

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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