The WTO has been on life support ever since it got stuck in the neoliberal quagmire during the unresolved 1999 Doha Round. But that’s a good thing since civil society was able to maintain a global defense against unfair market access and intellectual property rules that the neoliberal countries sought to liberalize in developing countries and emerging economies at that time. Trying to break the Doha deadlock has been a preoccupation of the United States and they have had to rely on a series of regional and bilateral free trade agreements to circumvent that deadlock.
The WTO decision making process is made by consensus and gaining agreement among 153 countries on 20 complex topics is an immense undertaking. However, consensus can be made through economic bullying and the tactics of capacity building and cooperation schemes have proved quite successful when there has competition between systems, as there was during the Cold War.
The world needs to rethink its relationship to regionalism, to development spheres, ecological spheres, industrial spheres, agricultural spheres, indigenous spheres, and best practices for eroding the landed spheres.
The 1944 Bretton Woods agreement at the United Nations created a truly international system that upheld the economic difference between the so-called capitalist and communist economies. But in 1948, the US, under President Truman asserted the Marshall Plan to undermine the short-lived global system by enacting free-trade rules that betrayed the spirit or international cooperation. The US coopted the IMF and the World Bank, and undermined the International Trade Organization by pulling out of it and putting forward its own exclusionary General Agreement on Tariffs and Trade (GATT). Generally speaking, the ITO was the system used by the Soviet Union and their partners and GATT was the US system.
After Soviet disintegration, the WTO was itself a kind of forced marriage between the ITO and the GATT countries, and while it was consensus. built, it relied upon the Most Favoured Nation status to give concessions, privileges, or immunities in these preferential agreement schemes. MFN was tool to build capacity and cooperation. While many of the developing countries were still reeling from the collapse of Soviet integration, these governments were being pushed to accept unfair agreements until the 2001 trade protests in Seattle shut down this abuse.
I don’t think it was coincidence the target on 9/11 as the the World Trade Center and the Pentagon. The intersection between militarization and trade was well known throughout the world, even if many in the US did not make that connection.
After 2001, President Bush sought to create a MEFTA, a Middle East Free Trade Agreement among the MENA (Middle East, North Africa) countries. This was his signature failure because the region was not democratically mature, and even with the Arab Spring that took place under Obama, these so-called “colour revolutions” would concede to a MEFTA.
In 2011, in part a response to MEFTA’s failure as well as the 2008 collapse of Wall Street banks and what was clearly a fatal flaw of neoliberalism, President Obama changed course by shifting the focus from the Middle East to East Asia with his announcement of the Pacific Pivot. This put the US agenda for circumventing the WTO on interfering with the relative success of the BRICS economies that survived Wall Street’s failures.
This strategy dominated, if not defined the Obama presidency. By committing the US to a lesser known and exploratory agreement called the Trans-Pacific Partnership, he led a new 12-country economic cooperation to try to bully China into opening its markets in a kind of rebranded Nine-Power Treaty, Open Door Policy (a 1930s cooperation of colonial countries and the Kuomintang to allow for privatization of China’s industries and resources after the collapse of the Qing dynasty). The strategy quickly failed as the BRICS countries were well capitalized and the neoliberal countries were struggling with high debt. Once the TPP cooperation understood that the BRICS countries could not be bullied, the US set into motion a containment and obstruction policy that destabilized access between the regions, and continued the post-colonial (now neoliberal) overthrow of democratically elected socialist countries.
Besides the TPP, the US also pushed forward TTIP, the Transatlantic Trade and Investment Partnership, as well as TISA, the Trade in Services Agreement. These three agreements together were asserted to circumvent the stalled WTO agreement, and it was backed by nearly every multinational corporate and industrial sector. Besides civil society, it was the BRICS countries and their spheres of influence that were most able to challenge attempts at a global corporate takeover.
Then there was election of President Trump who actually did manage to pull the US out of the TPP. His reasoning however, was that the US can lead alone and does not need to share through cooperation. This was, of course, his America First campaign, and this miscalculation on his part ended up throwing the rules-based international organization into disarray. For the first time since the Marshall Plan, the world was actually having to reimagine whether it would move forward with new US aligned America-First rules, or move forward without the United States.
Soon after pulling out of the TPP, Trump realized that the US was in no financial position to assert any kind unilateral action and would indeed have to rely on partnerships to advance his America First agenda. Since he was out or the TPP, Trump organized an even larger military cooperation with the Indo-Pacific Quadrilateral Discourse, between Australia, India, Japan and the United States.
And this is where we are today. The post war global institutions are being confronted with having to consider their relevance without the backing or the leadership of the United States.
And this is where we are with WTO.
It could also very well just end up failing since the architecture of the WTO was built to take advantage of the disintegration of the Soviet Union and the countries dependent on Soviet trade, and as we have begun to see the disintegration of US unipolar hegemony, we are likely to see another shift of global trade rules.
Alternatively, the WTO body could also reform if the US and the other OECD countries understood that neoliberal/neocolonial era has run its course and that there is a new global economy underfoot.
Whatever global trade will look like in the future, it is not going to be unipolar, but multi-spherical. But for that to happen, the US needs to really rethink its role in the world, and the world needs to rethink its relationship to regionalism, to development spheres, ecological spheres, industrial spheres, agricultural spheres, indigenous spheres, and best practices for eroding the landed spheres.
Against the backdrop of TPP countries trying to steer WTO rules in favor of the waning neoliberal order, it seems advantageous for China to ‘lead’ discussions by opting out of them, while upholding the WTO status quo. Having the WTO held up in the Doha Development Rounds has probably been more favorable than not, in that it has maintained a kind of dysfunctional balance between Wall Street’s privatization objectives and upholding fair protection measures in developing countries. The west continues to accuse China’s state-owned investments and enterprises as contradicting their commitments to free-markets and supply-side economics, but that is because the West does not quite understand what, “…with Chinese characteristics” means.
While this may be frustrating to those who wish to nail down China’s commitments, we should note that besides the inherent cannibalism of the Wall Street 1%, the 2008 financial collapse did open the door for China and the other emerging economies to be the leading disrupters to neoliberalism.
China’s main focus is the Belt and Road Initiative and this is the first time in centuries that China has really taken a global leadership role. It has been remarkable to see other institutions and cooperations shift to accommodate and harmonize with the BRI, the three that come to mind besides the RCEP are the SCO, the EEC, and AfCFTA. Even with the Pacific at the moment, about half the Pacific Island Countries have tilted towards the BRI, and while the old administering powers continue to warn about how they will be victims of China’s so-called debt diplomacy, there is little discussion about how the BRI finally builds interregional access and trade and provides Pacific Island Countries with new access to Caribbean and Latin American markets for the very first time. It is this leadership role that is motivating a huge PR backlash in Australia and the US, and the institutional media is relying upon disinformation in an attempt to diminish or curtail the BRI as if they were the last line of defense.
Granted, US media is correct when accusing China of undermining the US, but only in so far as it undermines the back door privatization objectives that have been inherent in the TPP since its inception and I would argue has evolved into privatization pathway strategies in the SDG targets as well.
I also think it is important to note that the Asian Infrastructure Investment Bank is seen as the funding arm for the BRI. Even though considerably smaller than China’s big banks, the AIIB Articles of Agreement outlines a fairly progressive rulebook of investment, one that I think has forced the World Bank to try to leapfrog the AIIB in terms of trying to build a more robust Environmental and Social Framework. And while China’s big industrial banks are to some degree also regulated by ESFs (rules are located in the Ministry of Commerce website-http://english.mofcom.gov.cn), its the smaller investment banks that seem to fly under the radar of regulators and that I think are in need of greater scrutiny and regulatory coherence, which we are likely going to be seeing as a result of the new extradition agreement in Hong Kong.
All this to say that China is committed to the BRI investment and we should likely see other agreements begin to adjust and harmonize towards greater transport, access, and context with the BRI. The door that China opens is not simply China’s trade with BRI countries, but multilaterally among all the member economies. Personally, I’m looking forward to holding China to their word.