Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Thursday, July 19, 2018 02:03:16 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

City »

Bangladesh Sammilita Peshajibi Parishad formed a human chain in front of the Jatiya Press Club on Wednesday demanding unconditional release and proper treatment of Begum Khaleda Zia.


Editorial »

Public money and gold are not safe, it is a national disgrace


Bangladesh Bank on Tuesday refuted the allegation that one of the gold bars kept in its highly secured vault by the customs department was adulterated. Following a report published by a vernacular daily that quoted Customs Intelligence Investigation Department report, the central bank comes up with the observation that "the ...

Football »

French World Cup victors show triumph of diversity: Obama


AFP, Johannesburg :Former US president Barack Obama on Tuesday singled out the African heritage of many players in France's World Cup-winning football team in a speech paying tribute to Nelson Mandela.Speaking in Johannesburg to mark 100 years since Mandela's birth, Obama said that embracing diversity "delivers practical benefits since it ...

Football »

Maurizio Sarri, the new Chelsea soccer team manager, holds up a jersey during a press conference for his official presentation at Stamford Bridge stadium in London on Wednesday.


Entertainment »

Former supermodel Tapur Chatterji turns entrepreneur


In the ever-changing landscape of contemporary times, there’s more career crossover now than ever before. Granddaughter of veteran film director Hrishikesh Mukherjee, Tapur Chatterji who made a mark as of India’s most formative supermodels in 90’s has recently forayed into design and interiors and launched her own entrepreneur outfit. With ...

International »

Thai cave boys leave hospital ahead of press conference


AFP :Twelve boys and their football coach who survived a highly dangerous and dramatic rescue from a flooded Thai cave were discharged from hospital Wednesday ahead of a press conference where they will tell their incredible story for the first time.An AFP correspondent on the scene saw the team, who ...

Entertainment »

Elnaaz surprised by Salman -Katrina controversy about Sacred Games


Actress Elnaaz Norouzi is surprised that there is a controversy about the characters of Karan Wahi and her in the Netflix series Sacred Games. The characters are alleged to have taken inspiration from real life incidents in Salman Khan and his ex-girlfriend Katrina Kaif's real lives.  "While shooting the episodes, ...

Entertainment »

Vidya Balan is all set to play her first Telugu film!


One can't refute the fact that Vidya Balan is one of the most versatile actresses in Indian Cinema today. The National Award Winning actress has never shied away from going off the beaten track and picking up complex and challenging roles. Needless to say, she has effortlessly nailed them all ...

Football »

Mbappe to donate US $500,000 World Cup winnings to charity


Sports Desk :French teenage sensation Kylian Mbappe will be donating his entire World Cup earnings to a charity that organises sporting events for children with disabilities.The 19-year-old reportedly earned about US$22,300 per game in the tournament and an additional US$350,000 for helping his country lift the World Cup trophy on ...

Editorial »

Trump‘s behaviour in meeting with Putin regarded as disgraceful


US President Donald Trump has defended Russia over claims of interference in the 2016 presidential election. After face-to-face talks with Russian President Vladimir Putin, Mr Trump contradicted US intelligence agencies and said there had been no reason for Russia to meddle in the vote, as per international media reports.Mr Putin ...

City »

BNP Standing Committee member Dr Khondkar Mosharraf Hossain speaking at an opinion sharing meeting on 'Role of Present Election Commission and Blue Print of the Government' organised by Bangladesh Youth Forum at the Jatiya Press Club on Tuesday.


International »

No reason to believe Russia behind election meddling


Reuters, Helsinki :U.S. President Donald Trump emerged from a meeting with Vladimir Putin on Monday saying he saw no reason to believe Russia had hacked the 2016 U.S. presidential election, and the Russian leader "was extremely strong and powerful" in denying it.Trump held his meeting just days after a special ...

International »

US, North Korea hold 'productive' talks on war remains: Pompeo


AP, Seoul :U.S. and North Korean officials held "productive" talks Sunday to discuss the return of U.S. service members' remains missing since the Korean War, U.S. Secretary of State Mike Pompeo said.Pompeo, who was not part of the talks, said in a statement that working level meetings between U.S. and ...

Business & Economy »

American Tony Roma now in Dhaka


Business Desk :America's most favorite ribs & steak chain "Tony Roma's" opened officially in Bangladesh on Monday.The first flagship outlet was launched at the most aristocratic zone in the city, NEB (3B), Road#74, Gulshan-2 in Dhaka. US Ambassador to Bangladesh Marcia Bernicat attended the function as the chief guest.Tony Roma's ...

Editorial »

Govt`s pragmatic step is needed to save Bangladesh from adverse impact of global warming


A RECENT study has shown that Bangladesh is among the countries 'most at risk' as over one billion people in the world are lack of air conditioning and refrigeration to keep them cool and to preserve food and medicines while global warming increasing temperatures. More electricity demand for fridges, fans ...

 
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