Skip to main content

Indo-African Opposition at the WTO

Since March 1st, the Nigerian economist Ngozi Okonjo-Iweala has been the new director general of the World Trade Organization. Like a coach hired by a team languishing at the bottom of its league — writes Larry Elliott of The Guardian — Okonjo finds herself in the happy position of taking over at the WTO when the only way is up, This historic international institution is unlikely to experience extinction or irrelevance. However, the appointment of Okonjo does not in itself remedy WTO’s deep troubles.

An alternative in plurilateralism

The negotiating function of the WTO has been lacking for twenty years now. The latest ambitious goal of liberalising trade in goods and services, announced in Doha in November 2001, became bogged down by the impossibility of a general compromise between old powers and large emerging economies.

In 2015 Michael Froman, President Barack Obama’s Trade Representative (USTR), officially called for the abandonment of the Doha Round. Froman’s alternative proposal was a pragmatic multilateralism, which would allow the WTO to host so-called plurilateral negotiations, limited in scope by the issues involved and the participating states. That year the WTO ministerial conference in Nairobi closed with the unprecedented admission of different views on the future of the Doha Round. Froman claimed a turning point representing the possibility of tackling new issues with a plurilateral approach, had been achieved between subsets of WTO member states, overcoming the practice of multilateral consensus. The same position was held by Robert Lighthizer, USTR of President Donald Trump.

The subsequent 2017 WTO Conference, in Buenos Aires, closed for the first time without a shared final declaration. The Doha Round seems definitively shelved. Lighthizer celebrates the moment when the impasse at the WTO was broken, in favour of plurilateral solutions, which disarm the veto power of individual nations. Some initiatives, such as the Joint Statement Initiative (SI), are launched from the Argentine capital, with the participation of about half of the 164 member states of the WTO and dedicated to specific topis, including the increasingly important e-commerce sector.

Delhi-Cape Town axis

Okonjo’s debut at the WTO General Council in early March was greeted by a combative stance from India and South Africa against the aforementioned JSIs. A document expressing the Indo-African position defends the multilateral underpinnings of the WTO and consensus based decision-making. The crucial point is that to introduce new rules in the WTO, it is necessary to involve all member states in the decision-making process. The Indian representative Brajendra Navnit explains that renouncing the tradition of unanimity will create a precedent for any group of Members to bring any issue into the WTO [...] undermining balance in agenda setting, negotiating processes and outcomes. The issue on the table is who makes decisions, how and on what matters. In the form of an abstruse legal dispute, via articles and treaty clauses, a political battle is being waged over the functioning and the very nature of the WTO.

The position held by India and South Africa in the course of the discussion in Geneva was criticised by the delegates of many capitals. The representative of the European Union, the Portuguese João Aguiar Machado, affirms that the WTO’s negotiating arm has not been able to deliver [many of the significant improvements in the multilateral trade rulebook, therefore it is vital to maintain the option of developing rules that correspond to the economic and trade realities of the 21st century through plurilateral agreements. Otherwise, there would be no other option than developing such rules outside the WTO framework. This would increase fragmentation and risk eventually condemn the WTO to irrelevance, As already demonstrated at the Nairobi and Buenos Aires Conferences, in substantial alignment with the White House, the EU takes sides in favour of open plurilateral negotiations.

A realist genesis

Within the WTO there are two plurilateral agreements - on public procurement and civil aviation - which are referred to as closed, because their benefits are accessible only by the participating states. These two agreements, negotiated under the terms of the GATT back in the 198os, are the only plurilateral agreements which survived the transition to the WTO. The ITA agreement on information technologies, however, is an example of an open plurilateral agreement. Its benefits also extend to non-signatory states, based on the ‘most favoured nation’ mechanism. According to historian Craig VanGrasstek, WTO rules show an ambivalent view towards plurilateral agreements. On the one hand, they recognise plurilateral agreements, which are considered binding only for the participating states. On the other hand, they consider the consensus of all member states as necessary to integrate a new plurilateral agreement into WTO rules. The consensus of all member states is indeed one of the legal arguments used by India and South Africa.

In general, VanGrasstek highlights the contradiction between the fundamental WTO principle of non-discrimination and an international reality divided by hundreds of preferential trade agreements, bilateral and regional Agreements, customs unions and even the European single market, In VanGrasstek’s interpretation of WTO history [The History and Future of the World Trade Organization, WTO Publications, 2013], the winning states of the Second World War, under the direction of Washington, established the GATT with the ambition of creating a multilateral system, but had a realistic awareness that the international order’s needs for discriminatory instruments. Therefore, they foresaw that the GATT could coexist with preferential agreements, under certain conditions (article XXIV), and allow protectionist measures motivated by national security (article XXI). This is the legal loophole which was abused in recent years by the tariff offensives of the Trump presidency.

The GATT precedent

Attacking the Indo-African position, the European ambassador Machado recalls that plurilateral agreements have been a driving force under the GATT and beyond and paved the way for many of the multilateral agreements that are today an integral part of the WTO agreement. In fact, as Bernard Hockman and Petros Mavroidis argue for the European University Institute, PAs were quite prevalent under the pre-WTO GATT regime, The Kennedy Round and the Tokyo Round, spanning the 196os and 19705, created a series of plurlateral agreements, at the time defined as ‘codes of conduct’, binding only the few signatory states [WTO ‘a la carte’ or WTO ‘menu du jour’? Assessing the care for plurilateral agreements, EUI, 2013].

German academic Nicolas Lamp adds lesser-known historical detail: during the Tokyo Round, least-developed countries (LDCs) asked in vain that the adoption of such plurilateral ‘codes’ be subject to decision by consensus or at least by a broad majority. That initiative, led by Yugoslavia, challenged the lack of transparency and In inclusiveness in the Tokyo Round negotiations. In many cases, for example for the anti-dumping agreement, LDCs were invited to negotiation tables only when the general form of the ‘code’ had been determined by the United States and European countries (The club approach to multilateral trade lawmaking, Vanderbilt Journal of Transnational Law, 2016. Above all, writes Lamp, when the advanced countries agree separately on their priority issues, the LDCs fear that they will lose control of the agenda at the GATT. This is the same political issue raised by India and South Africa today at the WTO.

Imposed agreements

In the transition from the GATT to the WTO, many plurilateral ‘codes’ of the Tokyo Round were made multilateral. This was possible, explains Hockman, because the dominant states of the GATT inserted the ‘codes’ in a take it or leave it package deal, that is, as part and parcel of accession to the WTO. In Hockman’s retrospective opinion, this stratagem looks much less strategic The fear of being forced to adhere to these agreements, in fact, has motivated a many LDCs to use unanimity to oppose any WTO decision on new issues.

In line with Brussels’ position, Hockman proposes returning to the GATT model and carrying forward the JSI as open plurilateral agreements [Plurilateral cooperation as an altemative to trade agreements: innovating one domain at a time, BUT, 202 1). Lamp argues this compromise should be accepted by India and South Africa for two reasons. First, if the Indo-African duo would veto the JSI, albeit with good legal reasons, they would risk finding themselves in an isolated, politically unsustainable position. Further, even a successful veto could not prevent the JSIs from materialising, as preferential agreements outside the WTO, unnecessarily damaging the multilateral institation. Second, the current fault in the WTO does not clearly divide old and new powers. Comments on the March WTO Council include a notable Chinese silence. On the one hand, China speaks out on every occasion in defence of multilateralism, in line with President Xi Jinping’s speech at the Davos forum. On the other hand, Beijing participates in the contested JSIs, along with many other emerging countries and LDCs.

Functional fragmentation?

The evolution of the WTO is matter of international economics and politics, not a matter of law. VanGrasstek highlights the real change that, in the decades after the Second World War, enormously expanded world trade and transformed the balance of power between powers. Industrial production is increasingly international and the global political order is increasingly multipolar. Starting with customs duties alone, the scope of issues under discussion has expanded to include non-tariff barriers, intellectual property rights, trade in services and so on. From the 23 founders of the GATT, the states involved increased to about fifty in the 1960s, a hundred in the 19705, up to the current 164 members of the WTO.

These objective complications are reflected in the timing of the liberalisation processes, In the first fifteen years of the GATT system [1947-1962], 5 rounds of tariff reduction were completed, lasting an average of 7 months each. After that, the Kennedy Round was extended to 37 months [19641967], the Tokyo Round doubled to 74 months [1972-1979], and the Uruguay Round took 87 months [1986-1994] to negotiate the switch from GATT to the WTO. The Doha Round, the first and last major multilateral negotiation of the WTO era, has not been closed since 2001.

Five years ago, commenting on the Euro-American proposals for plurilateral ‘clubs’ within the WTO, we wondered if they would mark growing fragmentation and dysfunctionality for the institution or, on the contrary, if they would facilitate a dialectic among coalitions and the definition of new balances, helping to safeguard the unitary sign of the WTO. We can reassert that question, as ambivalent as the WTO itself, guarantor of the general interest of capital in an open world market and, at the same time, arena for the irreconcilable clash of infinite particular interests.

Lotta Comunista, March 2021

Labels:

Popular posts from this blog

Cryptocurrencies, Tariffs, Oil and Spending in Trump’s Executive Orders

Internationalism No. 73, March 2025 Page 8 Douglas Irwin, economist and historian of American trade policy, writes for the Peterson Institute that the tariffs announced by Donald Trump, if implemented, would constitute a “historic event in the annals of US trade policy” and “one of the largest increases in trade taxes in US history. One has to go back almost a century to find tariff increases comparable”. Irwin limits himself to providing us with a historical dimension to the planned duties. But the bewilderment and turmoil created, especially among Washington’s allies, derives from the fact that the tariffs being brandished are accompanied by a hail of presidential decrees and declarations that mark a profound political discontinuity, both in the balance of internal institutional powers and in the balance of power between nations. The watershed was expected, but the speed and vehemence of the White House’s assaults are setting the scene for a change of era i...
Read more

The future of work in Europe

Every moment of transition presents its own complexities: for our class this means that further divisions are sown within it. Such is the present moment — one when different dynamics stack up and intertwine. Past, present and future On the one hand, there is the troubled exit from the pandemic crisis, still under the threat posed by the emergence of new Covid-19 variants. The pause on redundancies has come to an end in Italy. This, albeit partially, would have spared about 520,000 jobs in Italy up until now, according to Centro Einaudi’s estimates [ 25 th Annual Report on Global Economy and Italy , June 2021]. Company closures and staff reductions (in a mixture of arrogance and callousness) have marked the summer months, only to announce a difficult autumn, when the redundancy ban will be lifted also for small businesses and services. However, it is clear how uncertain the workers’ condition remains, regardless of any collective agreement signed, and how necessary it is always to ...
Read more

Marx’s Logic

Internationalism No. 73, March 2025 Page 7 From the series Principles of Marxism The method of exposition in Marx’s economic analysis, which he summarised on various occasions, adopts the progression from the simplest to the most complex concepts. It is a method that, at first glance, appears to correspond to common sense — from easy to difficult — but which Marx explains by contradicting common sense. Common sense distorts knowledge, starting right from the elementary building blocks of the representation of reality, which requires scientific abstraction to understand. Opportunism will always set the prejudices of common sense against the science-party . Marx writes, introducing Volume I of Capital : “The value-form , whose fully developed shape is the money-form , is very elementary and simple. Nevertheless, the human mind has for more than 2,000 years sought in vain to get to the bottom of it, whilst on the other hand, to the successful analysis of ...
Read more

Uneven Development, Job Cuts, and the Crisis of Labour Under Global Capitalism

Internationalism No. 73, March 2025 Page 16 Uneven development is a fundamental law of capitalism. We have a macroscopic expression of this in the changing balance of power between States: Atlantic decline and Asian rise are the key dynamics behind the political processes of this era, including wars caused by the crisis in the world order. But behind all this there is a differentiated economic trend, starting from companies and sectors: hence the differentiated conditions for wage earners. And this is the element to keep in mind for an effective defensive struggle. It’s only the beginning The electrical and digital restructuring imposed by global market competition affects various production sectors. The car industry is the most obvious, due to the familiarity of the companies and brands involved. We have already reported on the agreement reached before Christmas at Volkswagen, which can be summarised as a reduction of 35,000 employees by 2030. Die Zeit [De...
Read more

The SPD Faces the War

Internationalism No. 73, March 2025 Page 6 From the series Pages from the history of the worker’s movement The mystification of the First World War as a defensive war was accompanied by a misunderstanding of political forms, i.e., the illusion that the struggle for a democratic national shell was already a struggle against the imperialist content of German power, as if a democracy could exist outside of or above classes. Arrigo Cervetto, in The Political Shell, spoke of “the illusion of the primacy of politics”. At the same time, however, he emphasised the dialectic between structure and superstructure: “The basic view that political power relations depend on economic relations enables the revolutionary movement to overcome the obstacle of self-delusion; on the other hand, this view remains only a general idea if it does not inspire a restless and specific analysis of the situation, and if it does not demand an attitude consequent upon this analysis”. Mar...
Read more

Class Consciousness and Crisis in the World Order

Internationalism No. 71, January 2025 Pages 1 and 2 The consciousness of the proletariat “cannot be genuine class-consciousness, unless the workers learn, from concrete, and above all from topical, political facts and events to observe every other social class in all the manifestations of its intellectual, ethical, and political life; unless they learn to apply in practice the materialist analysis and the materialist estimate of all aspects of the life and activity of all classes, strata, and groups of the population”. If it concentrates exclusively “or even mainly” upon itself alone, the proletariat cannot be revolutionary, “for the self-knowledge of the working class is indissolubly bound up, not solely with a fully clear theoretical understanding or rather, not so much with the theoretical, as with the practical, understanding — of the relationships between all the various classes of modern society”. For this reason, the worker “must have a clear picture in ...
Read more

Engels in the New Century

Friedrich Engels memorably describes the poor sanitary condition of working-class neighbourhoods in mid-19 th century England. At a certain point, typhus and cholera epidemics began to threaten bourgeois neighbourhoods, and only then was the government forced to take remedial action. Well, with the pandemic of the century , it is as if Engels had entered the 21 st century, and the same contradiction was laid bare for the whole world. The Covid-19 catastrophe in India shows an elementary truth: Europe, America and China are completing colossal vaccination plans, but they will never be truly safe if the rest of the world, in Asia, Africa and Latin America, remains at the mercy of the virus and its mutations. And yet, even in the face of the evidence, the contention between powers to take advantage of vaccine diplomacy does not cease. The United States has put forward the promotional idea of suspending the patents of the pharmaceutical giants, perhaps in order to counter the Chinese off...
Read more

Political Battles of European Leninism

Internationalism No. 73, March 2025 Page 1 Thirty years after the death of Arrigo Cervetto , we are publishing here the concluding passages of the introduction to his Opere Scelte (“Selected Works”) for the series Biblioteca Giovani (“Publications for young people”), soon to be published in Italian. The 1944-45 partisan war in Italy. The political battle within libertarian communism. The Korean War, and the watchword of “neither Washington nor Moscow”. The layoffs at the Ilva and Ansaldo factories, the political battle and trade union defence in the struggles of post-war restructuring. From 1953 onwards, the crisis of Stalinism, the 1956 Suez crisis, the Hungarian uprising, the 1957 Theses and the challenge of theory and strategy vis-à-vis the tendencies of unitary imperialism. The political struggle within Azione Comunista (“Communist Action”) and the Movimento della Sinistra Comunista (“Movement of the Communist Left”). From the 1950s to the early 1970s, t...
Read more

States and Courts Counterbalance Trump

Internationalism No. 73, March 2025 Page 10 From the series Chronicles of the new American nationalism Donald Trump’s political agenda has been dictated by the tempo of the dozens of executive orders, memoranda, and proclamations he has signed, challenging international partners abroad, and Congress, the States of the Union, and the bureaucracy at home. The execution of some orders has already been temporarily suspended by federal judges, while the chaos caused by a memorandum led the administration itself to withdraw it. Other rulings are expected from the courts at the request of citizens, NGOs, and States. Furthermore, as James Politi of the Financial Times notes, “the result of his political success” in the elections is that Trump will have to satisfy “a much more diverse political coalition” than in his first term. Ross Douthat, a conservative commentator for The New York Times , also believes that “at least until the Democratic Party gets up off th...
Read more

The Drone War

Internationalism No. 78-79, August-September 2025 Page 13 From the series War industry and European defence The Economist provides an illustration of how the use of unmanned and remotely piloted systems in warfare is expanding. In Africa, 30 governments are equipped with UAVs (unmanned aerial vehicles), or drones. In 2024, they were deployed 484 times in local wars in thirteen different countries, twice as frequently as the previous year, causing 1,200 deaths. The most widely used drone on the continent is the TB2, produced by the Turkish company Baykar, which has seen a decade of extensive use in conflicts across Syria, Azerbaijan-Armenia, and Ukraine. LBA Systems and MALE drones At the Paris Air Show in mid-June, an agreement was signed to establish LBA Systems, a joint venture between Baykar and Leonardo. The aim is to produce the Akinci and TB3 drones, the latter of which will be capable of taking off from helicopter carrier decks. The aircraft wil...
Read more