Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Tuesday, October 16, 2018 09:36:16 PM
Follow Us On: Facebook Twitter Twitter Twitter Twitter

Trade multilateralism set back yet again

By
06th-Jan-2018       
Comments
Share your thought
Post a comment »
Read all () »

Anis Chowdhury and Jomo Kwame Sundaram  :
As feared, the Eleventh Ministerial Conference (MC11) of the World Trade Organization (WTO) in Buenos Aires, Argentina, on 10-13 December 2017, ended in failure. It failed to even produce the customary ministerial declaration reiterating the centrality of the global trading system and the importance of trade as a driver of development.
Driven by President Donald Trump's 'America First' strategy and his preference for bilateral trade deals, instead of multilateral or even plurilateral agreements, United States Trade Representative (USTR) Robert Lighthizer was key to the outcome. The USTR also refused to engage in previously promised negotiations on a permanent solution to the use of food reserves by India and other countries. Most importantly, the failure of MC11 undermines prospects for orderly trade expansion to support robust global economic recovery.
India's National Food Security Act, the most ambitious food security initiative in the world by far, buys food grains from small-scale farmers for distribution to some 840 million poor, two-thirds of its people. Since 2013, US and other OECD countries, all subsidizing their own farmers, have frustrated WTO acceptance of Indian efforts.
In fact, US rejection of the WTO Doha Round began much earlier. The Obama administration undermined the 2015 Nairobi WTO ministerial. Then USTR Michael Froman derailed the Doha Round of trade negotiations by demanding inclusion of previously rejected agenda items which WTO members could not agree to after 14 years of negotiation. He claimed that the then recently concluded Trans-Pacific Partnership Agreement was the new gold standard for free trade agreements (FTAs), and insisted on including corporate-promoted issues, such as broadened intellectual property rights and investor-state dispute settlement arrangements.
Following the 1999 Seattle WTO ministerial failure, Doha Round negotiations began in late 2001 after 9/11, with the OECD promising to rectify the previous Uruguay Round outcomes inimical to developing country interests. Ending the Doha Round inconclusively will enable WTO members to renege on promised concessions to keep all countries at the negotiating table. Not surprisingly, most developing countries want the Doha Round to continue, hoping to finally realize the 2001 post-9/11 promises to rectify Marrakech outcomes which have undermined food security and development prospects. The US had previously killed the attempt to create a pro-growth and development International Trade Organization (ITO) after the Second World War to complement the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), better known as the World Bank. These two international financial institutions were created at the 1944 Bretton Woods conference with broad supervisory and regulatory powers to provide short- and long- term finance to stabilize the international order.
A third international multilateral economic organization was deemed necessary for the regulation of trade, including areas such as tariff reduction, business cartels, commodity agreements, economic development and foreign direct investment. The idea of such an international trade organization was first mooted in the US Congress in 1916 by Representative Cordell Hull, later Roosevelt's first Secretary of State in 1933.
In 1946, the US proposed to the United Nations Economic and Social Council (Ecosoc) to convene a conference to draft a charter for an ITO. The US State Department prepared a draft charter for the UN Conference on Trade and Employment. US officials then made significant concessions to accommodate 'underdeveloped' countries. Underdeveloped countries then were generally unwilling to guarantee the security of foreign investments, widely seen as a means for foreign exploitation.
The Havana Charter's rule that the foreign investments could not be expropriated or nationalized except with "just", "reasonable", or "appropriate" conditions was seen by US business as weakening the protection that US investments previously enjoyed. US concessions on the use of quantitative restrictions for economic development were also seen as undermining free trade. Thus, the Havana Charter lost crucial support from US business.
The ITO Havana Charter's final text was signed by 53 countries, including the US, on 24 March 1948. Sceptical observers viewed such efforts as part of a grand strategy to extend US hegemony, even if at the expense of its closest ally, Great Britain.
However, by 1949, US political elites and corporations believed that American interests and investment interests were not well protected by the Havana Charter. What had begun as an American project was out of control. Thus, the Republican-dominated Congress opposed ratification. What seemed a certainty only months earlier, ended in failure by December 1950.
Thus, the ITO did not survive American trade politics despite initial US sponsorship and signing the Draft Charter in Havana. A coalition of protectionist and 'perfectionist' critics of the Charter convinced President Truman to withdraw the draft treaty from Congress, reneging on his administration's undertaking to support the ITO.
As envisioned, the ITO was quite different from the WTO, created almost half a century later. The ITO Charter was committed to full employment and free market cornerstones for multilateralism, and 'sought to make finance the servant, not the master of human desires' internationally. It was much more than a defence of investor rights.
Clearly, this strong commitment to achieving full employment was the glue for the post-war global consensus underlying the new post-colonial economic multilateralism. This global new deal became the basis for the post-war Keynesian Golden Age quarter century when inequality declined among nations as well as within many economies.
Negotiators at the Conference recognized the need for domestic and international measures, including international policy coordination, for "attainment of higher living standards, full employment and conditions of economic and social progress development", as envisaged by Article 55 of the UN Charter. Security of employment would have become a critical international benchmark for international trade promotion. Thus, the ITO's collapse represented a significant setback to prioritizing full employment, accelerating the transition to the imperial 'free trade' canon.
Richard Toye, a leading economic historian, has suggested a different order had the ITO survived: "The ITO might have been a more attractive organization for underdeveloped countries to join, which might, in turn, have promoted less autarchic/anarchic trade policies among them with additional growth benefits. This development might, in its turn, have given a further boost to the impressive post-Second World War growth in world trade … At the same time, the Havana charter's exceptions to free-trade rules, especially those made in the interests of the economic development of poorer countries, might have helped to reduce global inequalities." Thus, the ITO could have enabled a more inclusive, productive, orderly and just world economy.
(Anis Chowdhury, Adjunct Professor, Western Sydney University and the University of New South Wales (Australia); he held senior United Nations positions in New York and Bangkok.
Jomo Kwame Sundaram, a former economics professor, was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007).

Tariff
Add Rate

News Archive

Inside The New Nation

Editorial »

Question paper leakage continues: Incompetence is everywhere


QUESTION paper leaks have become epidemic before all public exams, university admission tests, and job recruitment tests during the current administration allegedly by some students and unscrupulous teachers along with office staffs. Detectives in recent times busted dens of criminals involved in the question leakage but the unholy nexus between ...

Football »

US headed to Women's World Cup with 6-0 win over Jamaica


AP, Frisco :The U.S. women's national team breezed through CONCACAF qualifying to secure a spot in the World Cup next year in France.The Americans still have to face Canada."Just because we qualified for the World Cup doesn't mean we're going to take our foot off the gas," Alex Morgan said. ...

Cricket »

India ready to unleash 'fearless' Shaw, Pant on Australia


"Fearless" young batting stars Prithvi Shaw and Rishabh Pant will be India's special weapons during their upcoming tour of Australia, according to captain Virat Kohli.Hailing the roles of 18-year-old Shaw and 21-year-old Pant in the two-Test victory over the West Indies, Kohli said they had been given free rein to ...

International »

Saudi Arabia warns against any sanctions over missing Khashoggi case


Reuters, Washington :Saudi Arabia on Sunday warned against threats to punish it over last week's disappearance of journalist Jamal Khashoggi, as European leaders piled on pressure and two more US executives scrapped plans to attend a Saudi investor conference.Khashoggi, a US resident and Washington Post columnist critical of Riyadh's policies, ...

International »

Prince Harry and wife Meghan expecting a baby


AFP, London :Prince Harry and his wife Meghan, the Duchess of Sussex, are expecting a baby in the spring of 2019, they announced on Monday as they began a Pacific tour."The Royal Highnesses the Duke and Duchess of Sussex are very pleased to announce that the Duchess of Sussex is ...

Entertainment »

Ranveer-Sara soak up the Swiss Sun with Rohit Shetty


Bollywood stars Ranveer Singh and Sara Ali Khan, who are in Switzerland to shoot for their upcoming action-drama Simmba, look all geared up for the weekend and their recent picture is a proof! Taking to her Instagram, Sara shared snaps from the set in which she can be seen posing ...

City »

BNP Standing Committee Member Amir Khasru Mahmud Chowdhury speaking at a rally organised by Nagorik Adhikar Andolon Forum at the Jatiya Press Club on Monday to meet its various demands including withdrawal of false cases filed against BNP Chief Begum Khaleda Zia and her son Tarique Rahman.


Editorial »

Take seriously the promise made to the editors


The Editors' Council will form a human chain in front of the National Press Club today (Monday) to press for amendments to nine sections of the Digital Security Act. Earlier, the Council postponed the same program following an assurance from three ministers including the information minister Hasanul Haq Inu that ...

Sports »

Marcelo Melo of Brazil (left) and his partner Lukasz Kubot of Poland bite their winning trophy as they pose for photographers after beating Jamie Murray of Britain and Bruno Shares of Brazil in the men's doubles final match of the Shanghai Masters tennis tournament at Qizhong Forest Sports City Tennis Center in Shanghai, China on Sunday.


International »

Trump explains `eligibility` for those who want to come to US


PTI, Washington :US President Donald Trump has said that he wants people with merit, who can help, to enter the country and not sneak inside the border illegally."I'm very tough at the borders. We've been very tough at the borders. People have to come into our country legally, not illegally. ...

International »

US wants ‘regime change’ in Iran: Rouhani


Reuters, Tehran :The United States is seeking "regime change" in Iran, President Hassan Rouhani said on Sunday, adding that the current US administration is the most hostile that the Islamic Republic has faced in its four decades.Tensions have increased between Iran and America after US President Donald Trump withdrew from ...

City »

Former adviser to the caretaker government Dr Hossain Zillur Rahman addressing a press conference on the occasion of 4th International Health Conference of People's Health organised by People's Health Movement- Bangladesh at VIP Lounge , Jatiya Press Club yesterday.


Entertainment »

Nadia in new telefilm


Entertainment Report :After returning country popular TV actress and model Nadia Ahmed has acted in a new telefilm titled Debor, which is based on a life-oriented story. Written by Barrister Mostaq Ahmed, the telefilm is directed by Sanjay Barua. The shooting of the telefilm has already been done in the ...

Editorial »

Mysterious disappearance of Saudi journalist Khashoggi


MYSTERY shrouds the disappearance of journalist Jamal Khashoggi when Turkish authorities didn't revoke their claim that he was killed inside the Saudi Consulate in Istanbul amid strong denials by the Saudi government. The Turkish newspaper "Sabah" yesterday reported that Khashoggi may have recorded his own death by his Apple Watch. ...

Sports »

Danielle Kang of the United States reacts on the 18th hole after finishing the third round of the LPGA KEB Hana Bank Championship at Sky72 Golf Club in Incheon, South Korea on Saturday.


.

 
Items that you save may be read at any time on your computer, iPad, iPhone or Android devices.
 
Are you new to our website? Do you have already an account at our website?
Create An Account Log in here
Email this news to a friend or like someone
Email:
Write a comment to this news