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TWN
Info Service on WTO and Trade Issues (Apr24/16) Geneva, 16 Apr (D. Ravi Kanth) — When the late Mr. Peter Sutherland, the first Director-General of the World Trade Organization, was asked what the most important contribution of the new multilateral trade body was, he emphasized on the “binding rules” for conducting global trade. That was 30 years ago – or to be precise, 15 April 1994 – in Marrakesh, Morocco, when more than 100 trade ministers had congregated to sign the famous Marrakesh Agreement that established the WTO. Mr Sutherland had played a vital role in forcing the two trade majors – the United States and the European Union (the European Community at the time of signing the Marrakesh Agreement) – to resolve their differences in agriculture to accelerate the process for concluding the Uruguay Round negotiations. Subsequently, the two trade majors signed the controversial Blair House Agreement in November 1992, when they accommodated each other’s interests in both export subsidies and domestic support, while creating asymmetrical commitments. Following this accord between the US and the EU, Mr Sutherland intensified negotiations on all other unresolved areas, including the creation of a two-tier dispute settlement system, with the Appellate Body as the final adjudicating body. His efforts led to the conclusion of the Uruguay Round negotiations at the official level in Geneva in December 1993. Later, the same agreement was signed at the Ministerial-level in Marrakesh on 15 April 1994. In an interview with three Indian journalists, including this writer, who had gone to cover the meeting in Marrakesh, Mr Sutherland emphasized how important binding rules are for a strong enforcement function that was missing in the previous General Agreement on Tariffs and Trade (GATT) since 1948. He also spoke about other areas such as trade in services, agriculture, TRIPS and so on. When asked whether the developing countries secured any significant gains, Mr Sutherland said their interests were being safeguarded with legal certainty. As regards any measurable gains on trade in services and the apparent “asymmetry” between Mode 3 in services dealing with commercial presence, and Mode 4 on movement of natural persons (short-term services providers), he dismissed the notion of “any asymmetry”. As WTO members now celebrate the 30th anniversary of the Marrakesh Agreement, it appears that the “binding rules-based” system is being rapidly chipped away at the margins. In fact, for some powerful members, the “rules-based” functioning of the WTO has seemingly become an anathema. With the Appellate Body having been made dysfunctional since December 2019, the WTO’s enforcement function has become almost paralyzed. Increasingly, a new tendency is slowly gaining currency, namely to ignore the rules in pursuing trade policies and initiatives based on “Realpolitik”, said people familiar with this development. Even as the WTO Director-General, Ms Ngozi Okonjo-Iweala, claims that “while the multilateral instrument remains the gold standard at the WTO,” in the same breath, she said that “we should be open to additional instruments to deliver outcomes for our people as we did on Services Domestic Regulation and the Investment Facilitation Agreement – the latter with the participation of three quarters of the Membership.” It is not that additional instruments should not be pursued, but how they are being pursued and whether they are consistent with the WTO rules cannot be ignored. Ultimately, by pursuing other instruments allegedly in defiance of WTO rules could only create “lawlessness”, which is contrary to what Mr Sutherland had said 30 years ago. In her message issued on 15 April, Ms Okonjo-Iweala said: “Thirty years ago, over 120 countries united with a shared vision: to transform the world through trade.” “They created a new global public good: one committed to using trade to raise people’s living standards, create jobs, and promote sustainable development.” The DG said: “Countries have used the open and predictable global economy anchored in the World Trade Organization to accelerate growth and development. Over the past three decades, more than 1.5 billion people have been lifted out of extreme poverty, embodying the enduring promise encapsulated in the Marrakesh Agreement.” Such seemingly hyperbolic remarks by the DG without any backing evidence may not augur well in addressing the fundamental poly-crises that have afflicted global trade and the multilateral trading system. Also, in the face of new paradigms based on geopolitical and geo-economic interests as well as “re-shoring” and “friend-shoring” strategies among others, it is important to have some serious introspection and adopt policies that only strengthen the rules. The DG went on to say: “As we mark the 30th anniversary of the WTO, this promise still stands as a beacon. The WTO now counts 164 – soon to be 166 – members. The way we do business across borders has evolved. So have the challenges to sustainability and socioeconomic inclusion. But trade remains a vital tool to solve these challenges and build a brighter future for people around the world.” However, what is important as members mark the 30th anniversary of the WTO, is getting back to the rules enshrined in the Marrakesh Agreement and stop the descent into a “lawless abyss” in the pursuit of additional instruments in alleged violation of the WTO rules. +
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