#146 THE G|O BRIEFING, JULY 13, 2023
No way out of the crisis yet at the WTO |International Geneva: “Relevant, unrecognized, at times opaque.”
Friends,
We hope you are well.
In today’s Geneva Observer, the last before our summer pause, we bring you a report on the WTO and some thoughts and observations from Dr. Olaf Wientzek, the departing director of the Konrad Adenauer Foundation’s Geneva office, our partner over the last three years. There were no strings attached to KAS’ support of the GIO, for which we have been tremendously grateful. In return, we gave Dr. Wientzek carte blanche for his assignment.
The UN Secretary General’s job is often described as the most impossible job in the world. Here in Geneva, the WTO’s Director General may rank as a close second. “Remember, Dr. Ngozi is not the Queen of Trade,” a seasoned WTO watcher told us two years ago, “she’s the head of a Secretariat, whose role is to serve a membership that for the past twenty years has really struggled to agree on what to order for lunch, let alone on how the rules of international commerce should evolve.” Their words came back to us as we found ourselves reporting on yet another failed attempt at putting the organization back on track.
“Today, the multilateral trading system is part of the solution to major global challenges, from climate change to conflict to pandemic preparedness. And a reformed WTO, fit for the twenty-first century, is needed now more than ever, with rules that underpin the stability, predictability, and openness of the global trading system. If the past 15 years have taught us anything, it is that unforeseen crises surely lie ahead and that without the stabilizing force of trade, the world will almost certainly be less able to weather them,” Dr. Ngozi writes in the latest issue of Foreign Affairs. Globalization must be reimagined, not abandoned, she argues. It’s a plea that seems harder to hear in the current geopolitical climate.
As usual, it’s all below. And still free for you to read—for now. As we announced last week, as of August, most of the G|O will be behind a paywall. The first reactions to our announcement have been unanimously encouraging. We truly hope that when we come back on August 24, your support will allow us to keep writing independent, reliable, and informed articles about International Geneva that you can’t find anywhere else. We will be off for a few weeks, but not unconnected. Please feel free to reach out to us by email at pm@thegenevaobserver.com or at talktothego@thegenevaobserver.com.
Enjoy your summer and all the best from all of us at The G|O.
Parting thoughts after four years in Geneva
By Dr. Olaf Wientzek*
In May 2019, I opened a new branch of the Konrad Adenauer Foundation (KAS)—a German political foundation focusing on international cooperation and multilateralism, the promotion of democracy, and political education—in Geneva. Given the city’s importance as multilateralism’s engine room, KAS’ decision to open a Geneva antenna was, I quickly realized, long overdue. As I am preparing to leave for Brussels, I accepted The Geneva Observer’s open invitation to share some of my observations. They are subjective and written in my personal capacity.
International Geneva: relevant but unrecognized and, at times, opaque
Geneva remains a relevant but underestimated place. While most of the Geneva-based organizations experience the crisis of multilateralism in their day-to-day work, many of them still succeed in addressing some of the most pressing challenges of the world. This is due to the work of many highly committed and purpose-driven officials, diplomats, and other members of the rich Geneva ecosystem (NGOs, experts, academics, church representatives, business representatives, and journalists). Too often, though, their work remains misunderstood, underestimated, or simply unknown. For many of the parliamentarians, experts, NGO representatives, journalists, and students that KAS has brought virtually or physically to Geneva over the past four years, it is a black box. This lack of knowledge, understanding, and recognition of the roles and developments in International Geneva is dangerous: it facilitates the spreading of conspiracy theories about a global elite supposedly making decisions without proper legitimacy.
But International Geneva’s rich ecosystem and its players are partly to blame for the many misunderstandings and general ignorance about their actions. Undoubtedly, the often highly technical nature of their work can be an obstacle in terms of communication to a wider audience. But the fact remains that for outsiders, even high-profile assemblies or conferences are hard to follow; looking for information can be an exercise in frustration, resembling a nerdy scavenger hunt. Diplomatic langue de bois prevails. When it comes to communication and translation, there is a lot of room for improvement.
Having actively observed International Geneva for many years, I am also left with the sense that some, be it in international organizations or within the diplomatic corps, are quite satisfied with this situation and not eager to change it. Journalists and investigative journalism, therefore, have a crucial role to play in Geneva, and contribute to the health of the Geneva ecosystem. This is one of the reasons why KAS Geneva decided to support The Geneva Observer and continues to see it as making an important contribution to a better understanding of International Geneva’s workings.
Multilateralism is threatened but resilient
Values-based multilateralism is under threat. The attempts by some countries to rewrite rules, particularly in the area of human rights, should be taken seriously. It is essential, however, to avoid falling into the traps of naivety, paranoia, or despair. While some developments and votes at the Human Rights Council are undoubtedly worrisome, successes at several other organizations in preserving liberal values demonstrate that the predicted end of values- and rules-based multilateralism is far from being carved in stone.
Early in my stay, I also observed with interest how selective many of the big authoritarian countries are in their engagement—most of them almost absent on such pressing issues as humanitarian aid or support to refugees.
Smaller countries matter
When looking at the evolution of international cooperation, the focus tends to be put on the ‘heavy-weights;’ the US, the EU, China, and now the other BRICS. But one of the lessons for anyone arriving in international Geneva is never to underestimate or overlook other important blocs, such as the African Group, the Organisation of Islamic Cooperation, and looser thematic groups such as the ‘Friends of the System’ in the WTO and other international organizations. These groups, mapped and highlighted in our Concise Atlas of International Geneva, are highly diverse and are often composed of countries with very different values and interests. To understand today’s multilateral system, it is necessary to look at these constellations of smaller and medium-sized countries from all continents. They often manage to play a crucial and constructive role in strengthening international cooperation. Without their diplomats, certain breakthroughs or courageous initiatives would have been impossible. What some of the smaller or medium-sized delegations are able to achieve despite a back-breaking calendar of meetings and sessions and with limited resources—but also thanks to Switzerland’s role as host country—has earned my admiration.
Dr. Olaf Wientzek
Why we should not be talking about the ‘Global South’
The diversity of interests and motivations of countries represented in Geneva has made me cautious to lump countries together in meta-categories. I have, over my years here, grown rather skeptical of the term ‘Global South,’ and stopped using it as, in my mind, it does not adequately describe interests, preferences, alliances, or divisions happening in International Geneva: Look at the votes on the Russian aggression in Ukraine in several fora, at voting patterns in the HRC, or at the very different positions and preferences at the WTO, where some members of the Global South strongly support the plurilateral voluntary approach and others do not; look at the different approaches towards the future of the internet. Countries billed as belonging to the Global South have taken divergent positions or shown important nuances in the global health debate or on the TRIPS waiver discussions at the WTO. I am also suspicious of some countries or other actors pretending to speak for the Global South in the areas of development, trade, global health, or at the Human Rights Council. To be clear: I am sure that the term is often innocently used without an agenda. But it is also increasingly used to fuel polarization, distort perceptions and, through a misleading narrative, relativize a multilateralism based on human rights, democracy, and the rule of law.
Farewell Geneva!
Living and working in Geneva has been personally and professionally wonderful. The reception and hospitality have been great. For me and my family, these last four years have been a gift and a privilege.
On a less personal level, for sure, the multilateral system sometimes moves at a frustratingly slow pace and can even come to a full stop. But, again, it has also produced very significant breakthroughs on issues of great import, a good omen for its future. Pondering it brings to my mind the motto of my favorite band King Crimson’s last tour: “In strange and uncertain times, sometimes a reasonable person might despair. But hope is unreasonable, and love is greater.” Or to say it as a Genevois might: “Post tenebras lux!”
*Director, Multilateral Dialogue Geneva Konrad-Adenauer-Stiftung
Related content: KAS' July 2023 "Map of the Month"
Sarah Ultes
And the European Council on Foreign Relations has just published a new collection of 9 insightful essays exploring the forces reshaping multilateralism.
Anthony Dworkin
Reports of the death of the WTO are premature. Or are they?
By Jamil Chade and Philippe Mottaz
The World Trade Organization (WTO) is on the verge of a nervous breakdown, incapable, it appears, despite some frantic diplomatic activity, of finding a way out of the biggest crisis it has faced since its creation. It suffers primarily—diplomats, WTO experts and watchers say—from what some call an acute case of American disengagement in the context of the rivalry between Washington and Beijing.
In an effort to salvage the embattled organization, foreign ministers from the Ottawa Group—a constellation of 13 nations including Australia, Chile, Japan, the EU, Brazil, Canada, South Korea, Mexico, New Zealand, Norway, the UK, Singapore and Switzerland—converged in Paris this June. But despite the urgency of the situation, the meeting essentially failed to find a way forward, sources privy to the deliberations told The Geneva Observer, leaving both emerging and developed countries frustrated and worried.
For the emerging economies, the further paralysis and possible de facto collapse of the WTO could mean a disrupted global trade regime where the most powerful countries would prevail, imposing their standards, rules, and behaviors, possibly bringing harm to the economies of emerging countries. Developed countries, for their part, are determined to preserve and strengthen a well-functioning multilateral system, a matter of strategic importance for them.
For the members of the Ottawa group, the demise of the WTO is simply “inconceivable,” as one of the Paris participants put it. It would, its members unanimously agree, represent a dangerous decade-long setback in the construction of the trade order, which was significantly altered when China joined the WTO in 2001. The current paralysis already makes the trading climate unpredictable, hampering efforts—particularly in emerging countries straddled with debts—to properly manage exports.
But so far, say sources within the Ottawa group, Washington has refused to engage in substantive discussions about a concrete reform of the WTO, all the while redefining US trade policy to align it with its domestic priorities and its China policy.
The current crisis has been years in the making. Its origins can be traced back to the Trump administration’s wholesale dismissal of the global trade rules as embodied by the WTO. Under Donald Trump, Washington imposed sanctions and raised tariffs, using trade as a way to settle bilateral conflicts. It also crippled the organization by refusing to appoint new judges to the Appellate Body, the WTO’s supreme dispute settlement mechanism. For Western allies and friends of the US, and many others represented in the Ottawa group, part of today’s intense frustration stems from the fact that despite claiming that Washington was back at the multilateral table, on trade at least, the Biden administration has followed in its predecessor’s footsteps.
“The election of President Biden heralded big changes in the United States’ relations with its allies and trading partners. And on many levels, productive and forward-looking change has indeed taken place. President Biden has put far greater emphasis on alliances, the environment, and on human rights. He has shown respect for his allies, and he seems to listen to what they say. One area where little has changed however is trade and this is particularly true with respect to the WTO,” wrote the organization’s former spokesperson Keith Rockwell recently. Rockwell, who served at the WTO for more than 25 years, continued: “Gone are the bombastic rhetoric and pugilistic protectionist actions. In its place is a kind of sneering indifference, a view that supporting, let alone leading the WTO, may expose US trade policymakers to attack from those on the left and right who would portray such support as anti-worker and pro-China.”
For Victor do Prado, former chairman of the Trade Negotiations Committee of the WTO, “it was a mistake to think that the Democrats would be different from the Republicans at the WTO. […] For one simple reason: the whole world is now hostage to the US-China rivalry,” he told The G|O. The WTO is “just a collateral victim” in a power struggle that enjoys support from both Democrats and Republicans, he stresses.
Some countries, he tells me—including his own, Brazil—try with greater or lesser success to navigate this new environment; however, do Prado admits, creating an alternative economic and trading order appears impossible.
There is also a large consensus within the Ottawa countries that the coming US elections will do little or nothing to change the situation—and might even make it worse, should Donald Trump be reelected. “Ultimately, it’s all about the age-old question of ownership and autonomy of the means of production,” do Prado says.
The Chinese economic model based on state-owned enterprises has been highly successful, do Prado tells me. “When the US seized the Appellate Body [AB] against China, most of the time, they lost. The AB gave its blessing to the Chinese model. That’s when Washington decided to kill it…”
40 years after Ronald Reagan called government the problem, not the solution, the US is now massively subsidizing its industry, imposing protectionist measures, and ironically borrowing from the Chinese playbook that it spent decades denouncing. It is a policy that initially tested the limits of Washington’s relationship with its allies and friends but is now increasingly being followed in Asia and within the EU.
For the former high-ranking WTO official, it is hard to remain optimistic about the future of the organization. “What now? Now the US and the EU pour billions of subsidies into strategic industries—microchips, high tech, communications, environmental technology—to try to beat China. If you can’t beat them, join them,” he says. “China hasn’t turned capitalist. It’s the US and the EU that are becoming Chinese. And to hell with the WTO,” he observes bitterly.
In June, in a major address at the National Press Club in Washington, US Trade Representative Katherine Tai laid out the Biden administration’s new approach to trade. “At a time of rapid change and constant developments, trade policy must respect the space for our domestic policymakers, regulators, enforcement officials, and legislators to debate and determine appropriate frameworks governing the relationship between government, technology, business, and the public interest,” she said. “Through all of the uncertainty that we face today, our mandate is clear. Complacency is not an option. We must adapt and pursue an unapologetically positive vision for building a tomorrow where all of us—including the most underserved and vulnerable—are more secure, more prosperous, and more equal,” she concluded.
With that speech, the Financial Times wrote, Katherine Tai “buried” the trading order that her country “had taken decades to build.” “Her speech raised major issues,” the paper continued. “Yet what cannot be ignored is the very fact of the volte-face. Many in the developing countries bought into the doctrine of trade openness. Many of them prospered as a result. Now they fear they are left high and dry.”
Today's Briefing: Philippe Mottaz - Jamil Chade
Guest Essay: Dr Olaf Wientzek
Editorial intern: David Jenny
Edited by: Dan Wheeler
