#37 The G|O Briefing, February 9, 2021

This is an onsite, slightly edited republication of the complete G|O Briefing newsletter

Today in The Geneva Observer, with yesterday's announcement that it plans to rejoin the Human Rights Council, the Biden administration is making good on its promise to put human rights front and center of its foreign policy.

We analyze  the significance for International Geneva of the US return to the UN body and comment on the challenges the young administration—pun intended—faces in its stated pursuit to reinvigorate multilateral diplomacy.

In a companion piece, we also continue our discussion about the EU-China Comprehensive Agreement on Investment (CAI) with a critical view by Wendy Cutler.

"With the forced-labor issue reportedly the last to be settled in the CAI negotiations, it seems clear that sealing the deal required the EU to yield on this vital human rights issue. And for what? This modest and incremental agreement will deliver only limited economic gains to Europe," she writes. Her piece is below.

“We recognize that the Human Rights Council is a flawed body in need of reform to its agenda, membership, and focus, including its disproportionate focus on Israel. However, our withdrawal in June 2018 did nothing to encourage meaningful change but instead created a vacuum of US leadership, which countries with authoritarian agendas have used to their advantage.” - Antony Blinken

This is how Secretary of State Blinken justified Washington's decision to return to the Human Rights Council, first as an observer before formally applying for a seat in the fall.

Through the HRC's spokesperson, the new president of the Human Rights Council, Ambassador Nazhat Shameem Khan—whose nomination was bitterly opposed by China, Russia, and Saudi Arabia—told The G|O: “I welcome the announcement by the United States at the Council meeting today (February 8) concerning their re-engagement with the Human Rights Council. Constructive engagement by all members of the international community at the Human Rights Council on matters that affect us all is vital. Such engagement greatly increases the Council's ability to deliver its mandate of promoting and protecting all human rights aimed at improving all people's lives around the globe.”

Nikki Haley, former US Ambassador to the UN, for her part tweeted: “Sad to see the Biden admin legitimize an organization that has become a farce to human rights advocates around the world.”

History, however, tells a very different story. While many human rights defenders here and elsewhere recognize the Council's shortcomings, there remains a broad consensus in the human rights community that the Council still serves its cause and that a high-level engagement from the US is welcome. The sustained paralysis of the UN Security Council through the veto power of China and Russia leaves the HRC, notwithstanding its institutional flaws, the main forum to denounce the most egregious human rights violators and to organize like-minded members to promote human rights initiatives.

The speed at which the new US administration moves on the human-rights front indicates that it considers the HRC a major strategic asset in pursuing its multilateral diplomatic engagement on human rights. With Antony Blinken as the top American diplomat and Linda Thomas-Greenfield at the UN—her confirmation is imminent—such high-level engagement can be predicted, including the swift designation of several experienced diplomats at the US mission in the field of human rights, trade, and arms control.

With the withdrawal of the Geneva Consensus Declaration and the end of the “Mexico City policy,” the HRC announcement is an additional step in Washington's prioritizing of human rights, in a complete reversal of the previous administration's policies.

It is expected that the Biden administration will also soon be lifting the sanctions imposed by the previous administration on the International Criminal Court. These sanctions extended to ICC personnel, including its Chief Prosecutor Fatou Bensouda. Sources close to the ICC and the Biden administration tell The Geneva Observer that the text revoking the executive order is “written” and that it is a question of “when not if” it will be signed. The abrogation of the order is a controversial issue in the US, where bipartisan opposition to the ICC runs high in Congress. Last year, close to 300 members of Congress wrote former Secretary of State Pompeo urging him to resist “the ICC politically motivated investigations” into the US and Israel. The letter was prompted by the ICC's decision to authorize formal investigations into possible war crimes committed by Israel in Gaza in 2014 and by American troops in Afghanistan. Neither Israel nor the US is a party to the Rome Statute that established the ICC. Last Friday (February 5), in a 2-to-1 decision, the ICC ruled that its jurisdiction extends to Gaza, the West Bank, and East Jerusalem.

The US, an untrustworthy rival?

Applauded by many here, the return of the US to the multilateral world is also a source of interrogation. “Unfortunately, the world doesn't organize by itself” is one of Tony Blinken's favorite utterance. Indeed. It has changed in fundamental ways since Democrats left office in 2017. Populist and nationalist forces have gained power in several countries. Authoritarian leaders have exploited technology to become more assertive domestically and internationally.

And so has America's perception abroad. The Biden administration's swift reversal and the unraveling of Donald Trump's foreign policy, mostly so far by executive order, is not without revealing how consistency has potentially disappeared from American foreign policy. Fickleness has arrived. With a tied Senate, Joe Biden's margin of maneuver in foreign policy is limited. America's allies—and rivals—have taken note. The US moral standing has also suffered in an unprecedented way, making it difficult for the US to simply come back and sit at the multilateral table. Joseph Stiglitz's quote, “The US, after all, has shown itself to be an untrustworthy ally,” has gone viral in International Geneva.

Besides announcing its return to the Human Rights Council,the White House also lifted its veto on the Nigerian candidate to lead the WTO. It confirmed its commitment to join COVAX and its support for the WHO, expressed by Vice-President Kamala Harris herself calling Dr Tedros.

Washington's re-entry into the multilateral orbit, however, also comes with conditions and demands. The US will be rather blunt in wanting to reform the system according to its own interests. At the HRC, the Biden administration’s pressure on its friends and allies will be felt. China's positions will be vigorously opposed, but so will the demands to protect the Council from the accusation it is too focused on Israel. Using the HRC to rebuild alliances will also come with positive nods to Europeans. LGBTQ+ issues, access to reproductive rights, and greater attention to the situation of women will gain track on the American agenda.

At the WTO, where the Biden administration's support for Ngozi Okonjo-Iwaela guarantees she will be the first woman and the first African heading the organization, America will pressure for reform of the Appellate Body. While not using the nuclear option favored by Trump, who paralyzed the dispute settlement system, Washington will keep pushing for a thorough review of the mechanism supported by both Democrats and Republicans.

Nor will there be much room for rapprochement with China in the WTO. The US government will insist that Beijing no longer be treated as a developing economy, which gives it more room for policies to support exports and its companies.
It is no coincidence that Biden's first international calls were with Emmanuel Macron, Angela Merkel, and Boris Johnson. The three major multilateral upcoming 2021 gatherings will be in Europe: the G7 in the UK, G20 in Italy, and COP26 in Scotland. The reconstruction of the US multilateral diplomacy, thus, will demand first the reconstruction of strong ties with Europe.

Otherwise, Washington's efforts might amount to imposing multilateralism on its terms. An obvious paradox.

Jamil Chade

AN EU-CHINA DEAL FOR A BYGONE ERA

By Wendy Cutler*

After four years of Donald Trump’s “America First” agenda, the European Union could be forgiven for attempting to go it alone. But, if history is any guide, no single economy can compel China to change its most problematic behaviors.

Late last month, the European Union and China released new details about the Comprehensive Agreement on Investment they concluded in December. On paper, EU negotiators made some progress in important areas like market access, investment liberalization, and sustainable development. But can an incremental bilateral agreement like the CAI really govern economic relations with today’s China?

To be sure, the EU has secured market access in important sectors – including electric vehicles, cloud computing, financial services, and health care – largely through the relaxation of equity restrictions. But detailed annexes to the agreement have yet to be made public, and it remains to be seen how many of these commitments are entirely new. It is possible that the deal largely codified steps China has already taken to boost market access, either through its own investment laws and regulations or on an ad hoc basis.

Furthermore, while equity restrictions form a formidable barrier to market access, they are hardly the only one. Foreign companies often face a series of other regulatory hurdles, which they can clear only by securing approvals from multiple Chinese government agencies – an often time-consuming and frustrating process. According to the latest US-China Business Council survey, conducted last spring, securing licensing and related approvals is the sixth-biggest challenge American firms face when operating in China.

In any case, the content of the CAI is only part of the story: China often disregards its bilateral commitments. Australia is a case in point. Despite a comprehensive bilateral free-trade agreement, China recently imposed restrictions on imports of Australian wine, barley, and coal, among other products, over what are essentially political grievances. (For example, China took issue with Australia’s decision to ban the Chinese giant Huawei from its 5G network and its calls for an independent inquiry into the origins of the COVID-19 pandemic.)

Australia is not an isolated case. After South Korea’s 2016 decision to deploy an American missile-defense system within its borders, China imposed heavy economic sanctions, despite the bilateral free-trade agreement that had come into force the previous year. If the Chinese authorities are not hesitant about abandoning their trade commitments, what is the point of securing them?

The CAI’s attempt to address market distortions caused by the Chinese government’s hands-on approach to economic management is similarly dubious. With Chinese firms receiving large subsidies and other official financial assistance, it has become increasingly difficult for foreign companies to compete with Chinese firms, both in China and in third countries.  

This trend is set to continue. Last July, Chinese President Xi Jinping pledged to “strengthen financial support for market players,” and noted that state-owned enterprises (SOEs) “should play a leading role to drive upstream and downstream enterprises of all kinds.”

To address these distortions, the CAI includes provisions for enhancing the transparency of services-related subsidies. But its mechanism for discussing other harmful subsidies – where some of the greatest problems lie – is unenforceable.

Moreover, while the CAI’s rules on SOEs are stronger than those imposed by the World Trade Organization, they fall far short of those contained in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. More robust provisions in these areas are essential to make any trade and investment agreement with China meaningful.

The CAI’s final crucial weakness relates to the labor provisions in the section on sustainable development. In particular, China offered only a vague and unenforceable pledge to “make continuous and sustained efforts” to pursue ratification of the two relevant International Labor Organization conventions addressing forced labor.

Make no mistake: given China’s highly centralized government, its leaders could quickly ratify the ILO conventions. They simply don’t want to. Chinese leaders have consistently resisted international obligations that permit intrusive inspections, including in response to increasingly dire reports of forced labor by Uighur Muslims in Xinjiang.

With the forced-labor issue reportedly the last to be settled in the CAI negotiations, it seems clear that sealing the deal required the EU to yield on this vital human-rights issue. And for what? This modest and incremental agreement will deliver only limited economic gains to Europe.

The CAI might have made sense in 2013, when negotiations began. But it is certainly not equipped to address the challenge China poses to the global economy today. On the contrary, it may strengthen China’s hand in rebuffing international calls for meaningful reform. After all, it was concluded just before US President Joe Biden’s inauguration, despite signals of concern from Biden’s team. In this sense, it could complicate the new US administration’s efforts to build a coalition of like-minded countries to address the challenges posed by China.

At best, the CAI is too little, too late. The same goes for the “phase one” trade deal by Donald Trump’s administration which came into effect one year ago. Rather than address the critical issues of government subsidies and the market-distorting role of SOEs, the Trump administration said they would be included in “phase two” negotiations, which never began.

In deciding whether to approve the CAI, the European Parliament and EU member states should think long and hard about China’s track record of disregarding its trade and investment commitments, cutting foreign entities’ market access in informal and opaque ways, and brazenly violating human rights. Such an honest assessment would produce a clear conclusion: bilateral deals are not enough.

After four years of Trump’s “America First” agenda, it is understandable that some in the EU want to demonstrate that the bloc has the “strategic autonomy” to act on its own. But, if history is any guide, no single economy can compel China to change its most problematic behaviors, from excessive subsidies and industrial overcapacity to human-rights violations. A collective approach, rooted in effective transatlantic cooperation, at least has a fighting chance.
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Wendy Cutler, a former acting deputy US trade representative, is Vice President of the Asia Society Policy Institute.

Copyright: Project Syndicate, 2021.
www.project-syndicate.org

Today's Briefing: Philippe Mottaz - Jamil Chade - John Zarocostas - Editing: Paige Holt