Trump’s departure from free trade further weakens the World Trade Organization. But this also offers opportunities for the European Union.
Discussions at the WTO conference on global trade liberalization rules Photo: dpa
According to some delegates, there is much more at stake than just liberalization. At stake at the World Trade Organization, which has been meeting in Buenos Aires since Sunday, are substantive issues, but above all the future significance of the WTO as the guardian of free world trade itself. The issue has been raised by U.S. President Donald Trump. He had already called the WTO a "disaster" during the election campaign. And even after he took office in January, his distance from the rule-maker and overseer of global trade remained great.
The trade ministers from the 164 member states are now discussing global liberalization rules for purchases via the Internet, for trade in services and for trade in environmental goods. The four-day conference will also focus on reducing trade-distorting and environmentally harmful subsidies for fishing fleets. Once again, however, final agreements are not expected.
After all, the permanent ambassadors at the WTO headquarters in Geneva have been unable to agree on joint draft resolutions on any of the issues in more than two years of negotiations. This 11th ministerial conference since the WTO was founded in 1994 is overshadowed by Trump’s "America first." In addition, it is again accompanied by demonstrations by non-governmental organizations (NGOs) critical of globalization.
Before it even started, the WTO had already had its first upset: A few dozen representatives of NGOs and trade unions already accredited by the WTO had been refused entry by the government of Argentina despite an agreement with the WTO – a hitherto unique occurrence in WTO history.
Still no world trade rules for poor countries
Pirmin Spiegel, executive director of the Catholic relief organization Misereor, also criticized the agenda of the WTO conference, which was primarily determined by the EU and the other members of the Organization of Economically Developed Countries (OECD): "Instead of placing topics such as further deregulation in Internet trade and in the services sector at the top of the conference agenda, the EU should advocate trade rules that give developing and emerging countries in particular significantly more leeway for their own development."
Poorer countries must be able to protect their agriculture and the right to food, for example. From the OECD countries, Misereor expects "clear commitments to abolish all subsidies that favor agricultural dumping exports or overfishing of the oceans". This is the only way that the desired revival of multilateral trade policy can also gain public support. Oxfam’s agricultural and trade expert Maria Wiggerthale criticized the fact that the promises made at the WTO ministerial conference in Doha in 2001 to create fair world trade rules for poorer countries have still not been implemented.
Karl Brauner, WTO deputy director
"Nationalism, separatism and populism are aberrations".
In fact, the WTO has been almost completely deadlocked since Doha. That’s because since China’s accession in 2000, a Beijing-led group of emerging economies formed. Against these, the formerly dominant economic powers – the USA, EU, Japan and Canada – were no longer able to assert their interests even when they acted together in the WTO.
Since then, these economic powers and also Australia have concentrated on bilateral and multilateral free trade agreements – such as TTIP (EU/USA), Ceta (EU/Canada), TPP (Pacific/Africa), Jefta (Japan/EU) or Tisa (services). However, since the Trump administration took office, Washington has been executing a broad retreat from such agreements if they "do not serve U.S. interests."
New protectionism under Trump
At the same time, however, Trump is increasingly targeting global trade agreements once created with the active participation of the United States under the WTO. At the same time, he is erecting numerous new protectionist hurdles to "protect" the U.S. economy – in some cases in clear violation of these agreements.
Under Trump, "the U.S. has relinquished its 70-year leadership role in the development of the world trading system," said German WTO Deputy Director Karl Brauner in Buenos Aires. For the EU, however, the vacuum left by the U.S. is an opportunity it is increasingly seizing, he said. As an example, he cited a push by the EU and Brazil to reduce domestic agricultural subsidies worldwide. "Nationalism, separatism and populism are aberrations," Brauner said. Ultimately, "we can only solve the world’s problems together."