Economics Times, July 16, 2020
Over the last few years, various disturbances which are taking place around the world, particularly in the economic sphere, are getting reflected in the functioning of the World Trade Organisation. The WTO is in a ventilator and it has to come out of it, according to Pradeep Mehta, Secretary General, CUTS International.
He was moderating a webinar titled ‘What would happen to a world without the WTO?’
“We need a Marshall Plan type of approach to help particularly the poorer countries of the world for them to cope with the Covid-induced economic crisis that they are going through. From our experience of the past disruptions, the world will recover when the global trading system recovers. Recent drop in imports to China is much more alarming than the decline in exports that they are witnessing. The WTO as an institution is essential to bring an order to a chaotic world,” he underlined.
“There has to be a balance between the market access, needs and regulations related to ensure safety and security for consumers”, he argued. He further added that “it is time for a new global compact. A new equilibrium of accommodation of various interests has to emerge and that will depend on existing and emerging power relations among major players. In order to preserve global peace, we have to encourage trade.”
“It is the duty of the middle powers, including India to collectively provide a strong leadership for the resurrection of the multilateral trading system,” he said.
Anders Ahnlid, Ambassador of Sweden to Finland, said: “Trade wars are not good and not easy to win as it were. It is essential to stick to the economic basis of WTO based on knowledge about trade theory and how trade works in the real world, in order to realise the benefits and minimise the cost of protectionist measures.”
He also emphasised that, “the small and medium sized powers still have a key role for seeking to regenerate consensus in the multilateral trading system”.
According to Marion Jansen, Chief Economist of the International Trade Centre, “Everywhere the majority of the workforce is employed by small and medium sized enterprises. Therefore, if small and medium enterprises do not take advantage of trade rules or the multilateral trading system, then probably the majority of the population is not going to take advantage. Therefore small and medium sized entities are to be cared about”.
Bernard Hoekman, Professor of the European University Institute, highlighted the tendency of overloading the WTO with issues where WTO does not have comparative advantage to deal with. He hoped that there will be a substantive discussion on institutional design of the WTO system.
“The WTO has to focus on the systemic questions about the dispute settlement system needed by WTO and about the key constraints that needed to be addressed by the WTO, rather than discussing the issues that the US has put on the table”.
Carolyn Deere-Birkbeck, Senior Researcher at the Global Economic Governance Programme of the University of Oxford, underscored that “the relevance and credibility of the WTO relies on governments harnessing its processes and functions to find ways to better cooperate on two most important challenges faced by the humanity. They are environmental sustainability and climate change and they have to be linked with the objective of achieving progress on the sustainable development goals”.
“We need developing countries’ voices to be pushed forward internationally, to push developed countries to do what they need to do and arm the supply chains of the developed countries in ways it supports developing countries.”
According to Passi-Heikki Vaaranmaa, Director, Trade Policy Unit, Ministry of Foreign Affairs, Finland, “The WTO is a global public good in itself and is primarily contributing to economic security. It provides the global trade a rules-based framework that promotes certainty and trade security for traders around the world. Economic security fosters peace and it is another public good.”
He reiterated the need for every member state of the WTO to do their bit to create a better balance in the system.
Veena Jha, Chief Executive Officer of IKDHVAJ Advisors, underlined the major role of the deliberative agenda of the WTO through its Committees, which has three basic functions that include discussing and transparency, monitoring functions and solving trade related concerns without litigation.
Bipul Chatterjee, Executive Director of CUTS International, argued that the presence of the WTO in terms of its functioning is becoming more invisible and the world is moving backward to a century, to a period in which multilateralism was absent.
He ended by posing a question to the participants, “is it possible to have a functioning system, having two entirely different types of governance both in political and economic sense?”
This was the last of a series of webinars on this subject organised by CUTS International, a global public policy think- and action-tank promoting consumer welfare through trade, regulations and governance. The previous four webinars had speakers from Asia and the Pacific, Africa and the Americas.
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