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

Democratic Defeat in the Urban Vote

Internationalism No. 71, January 2025 Page 2 From the series Elections in the USA A careful analysis of the 2022 mid-term elections revealed the symptoms of a Democratic Party malaise which subsequently fully manifested itself in the latest presidential election, with the heavy loss of support in its traditional strongholds of the metropolitan areas of New York City and Chicago, and the State of California. A defeat foretold Republican votes rose from 51 million in the previous 2018 midterms to 54 million in 2022, a gain of 3 million. The Democrat vote fell from 61 to 51 million, a loss of 10 million. The Republicans gained only three votes for every ten lost by the Democrats, while the other seven became abstentions. In 2022, we analysed the elections in New York City by borough, the governmental districts whose names are well known through movies and TV series. In The Bronx, where the average yearly household income is $35,000, the Democrats lost 52,00...
Read more

India’s Weaknesses in the Global Spotlight

Farmers’ protests around New Delhi have been going on for four months now. A controversial intervention by the Supreme Court has suspended the implementation of the new agticultural laws, but has raised questions about the dynamics between the judiciary and the executive, and has failed to unblock the negotiations between government and peasant organisations. The assault by Sikh farmers on the Red Fort during the Republic Day parade as India was displaying its military might to the outside world — the Chinese Global Times maliciously noted — paradoxically widened the protest in the huge state of Uttar Pradesh. The Modi government has been trying to revive India’s image with the 2021 Union Budget: it announced one hundred privatisations and approved the increase to 75% of the limit on direct foreign investment in insurance companies. For The Indian Express ( IEX ) this is a sign of the commitment to push ahead with reforms despite the backlash from rural India. Also for The Economi...
Read more

Armed Negotiations between the Gulf and the Mediterranean

David Petraeus, Commander of the US forces in Iraq and the Gulf in 2007-2008, then director of the CIA in 2011-12, described the elimination of Iranian General Qasem Soleimani on January 3 rd in Baghdad as a defensive action , with which the Trump presidency restored a US deterrence , which was weakened by recent Iranian actions . This is a reference to the attacks conducted indirectly, unclaimed by Tehran, against the Saudi oil infrastructures on September 14 th 2019. In March 2008, when the forces under Petraeus’ command supported the Iraqi Army in the fight against local Shite militias, Soleimani sent a message to the American general: informing him that he was the person in charge for Iranian policies in Iraq, Syria, Lebanon and Gaza therefore the channel through which to define an agreement to resolve the various issues with Tehran. Petraeus holds the advisors of the Quds Force, the spearhead of the Pasdaran asymmetric operations, responsible for the killing of around 600 ...
Read more

In the Depth of Our Class

The pandemic of the century is a storm that does not subside; it returns to its rampage after 40 million infections and more than a million official victims, perhaps two million according to estimates on the excess deaths. In the contention between powers, China stands as the winner: it seems to have tamed the virus, and industry and services are up and running; the USA and Europe, on the other hand, are moving towards a new wave of infections that casts yet more shadows on the economic cycle. Political structures and health systems are at the height of tension. In America, the elections have judged Donald Trump’s rash demagogy on the basis of the opposite reasons for containing the pandemic and the intolerance of small and large producers; in Europe the executives are attempting to steer between the surge in infections, increasingly stringent confinement measures and the threats of fiscal jacquerie in the tourism and catering sectors. Almost everywhere, in the Old Continent, governm...
Read more

Historical Constants and Strategic Surprise

The Strategic Surprise of the Agreement between Beijing and Tehran and the Suggestion of a Six-Power Concert The agreement between Beijing and Tehran falls under the definition of strategic surprise , i.e., events that entirely appertain to the political realm and mark a change or an about-turn in the balance among the powers. New alliances, the breakdown of alliances, the overturning of coalitions, diplomatic openings or unexpected military sorties: these are the regular novelties of international politics that Arrigo Cervetto wrote about. However, if the agreement was an unforeseeable event in itself, the long-term objective economic and political trends. that have determined it and made it possible are entirely investigable. The invasion of Afghanistan by the USSR at the end of December 1979 was interpreted by the United States as a potential threat to the oil routes of the Persian Gulf, and it was a contemporary revival of the Great Game , which had set the British Empire agai...
Read more

The deep strata of workers in an opulent Europe

The inauguration of the Draghi government has revived top trade union leaders anxious to be involved by the government of all , all the more so in the era of the Recovery Fund. The word consultation has been the most used in some recent trade union comments. Annamaria Furlan, of the CIS [Italian Confederation of Trade Unions] is explicit in calling for a great consultative pact [ Il Messaggero , 8 th February]. Pierpaolo Bombardier, secretary of the UIL [Italian Labour Union], adds that the consultation must become a method to help the country restart . Maurizio Landini, of the CGIL [Italian General Confederation of Labor] sees the novelty in the fact that social partners have been involved in the establishment of the new government [ Conquiste del lavoro , 11 th February]. The two phases of European imperialist politics In this sense there are many comparisons to the Ciampi govemment of 1993, omitting that consultation was functional to limiting the costs of labour. There ...
Read more

The Works of Marx and Engels and the Bolshevik Model

Internationalism Pages 12–13 In the autumn of 1895 Lenin commented on the death of Friedrich Engels: "After his friend Karl Marx (who died in 1883), Engels was the finest scholar and teacher of the modern proletariat in the whole civilised world. […] In their scientific works, Marx and Engels were the first to explain that socialism is not the invention of dreamers, but the final aim and necessary result of the development of the productive forces in modern society. All recorded history hitherto has been a history of class struggle, of the succession of the rule and victory of certain social classes over others. And this will continue until the foundations of class struggle and of class domination – private property and anarchic social production – disappear. The interests of the proletariat demand the destruction of these foundations, and therefore the conscious class struggle of the organised workers must be directed against them. And every class strugg...
Read more

Nuclear Energy and the Power Grid

Internationalism No. 85, March 2026 Page 8 From the series The world energy battle Electricity is at the heart of modern economies and the demand for electricity is growing much faster than the overall consumption of energy in every scenario [ Electricity 2025 , International Energy Agency report]. Overproduction and power grid bottlenecks Electricity represents just 21% of energy consumption at a global level, but it is the main source for the sectors which represent more than 40% of the economy. A fundamental issue for the security of the electricity system is the modernisation of the power grid, which is currently lagging behind the expansion of production capacity. Although global investment in the production of electricity has increased by almost 70% since 2015, reaching $1,000 billion a year, annual spending on the grid has increased at less than half this rate, reaching $400 billion. This is also a European problem. Accordin...
Read more

‘Two Hands’ and ‘Two Roads’

From the series News from the Silk Road The international tensions which China will face on the seas in the next fifteen years could find a buffer in the expansion of China’s influence on land in Central, Southern and Western Asia. Wang Jisi is the dean of the School of International Studies at the University of Beijing and a major figure of the American party in China. His unexpected foray into ‘geopolitics’ has reignited the old clash between different American currents — a phenomenon we analysed more than twenty years ago. At the time, Robert Manning, the author of The Asian Energy Factor and adviser to the State Department in 1991, viewed Asia’s growing dependence on the Persian Gulf for its energy requirements in the light of geoeconomics and geostrategy and foresaw a possible convergence between the USA and China. From a geoeconomic standpoint, both trade and the funding and development of the infrastructure necessary for Asia’s energy needs were more important than terri...
Read more

Asian Development and the Strategy-Party

Internationalism No. 33, November 2021 Page 1 Marx and Engels’ Manifesto of the Communist Party is a text for the strategy-party. The socio-economic and political-state recurrences of capitalist development are set out in it, in their contradictory dynamic which can be grasped by the revolutionary party. This text anticipates the notion of consciousness brought from without , which would become the heart of the Leninist conception of the party. The Manifesto is already a text of international strategy Arrigo Cervetto would write in his study on the ‘genetic’ formation of strategy in Marx and Engels. And Marx and Engels, together with the English Chartists and the groups of the German and French labour movements, would attempt to repeat the experience of the Communist League: to give them a strategy, precisely to give the Manifesto to an existing workers’ party . Their starting point was the revolutionary role of the bourgeoisie in overcoming and subvert...
Read more