Sat | Jun 6, 2020

Editorial | CARICOM on the WTO front line

Published:Tuesday | May 19, 2020 | 12:13 AM

THE NEWS of Roberto Azevedo’s decision to leave the World Trade Organization (WTO) in August, a year before the end of his second four-year term, has been overshadowed by the daily accounting of the more obvious fallouts from the COVID-19 pandemic. In the circumstance, it is easy not to pay sufficient attention to the development. Jamaica and its partners in the Caribbean Community (CARICOM) can’t afford to do that. They must be in the thick of things not only with respect to choosing Mr Azevedo’s successor, but in broader moves to reshape the WTO.

Indeed, Mr Azevedo’s departure makes the WTO the opening front in the jostle for a new global order in the face of the cracks in an old one that has been exacerbated by the novel coronavirus, to which this newspaper has been urging CARICOM to accelerate its response.

Like many in the developing world we, too, are ambivalent towards the 25-year-old WTO. Some studies suggest that the globalised trade regime it fostered has led to a $855-billion-a-year increase in output, or an average 4.5 per cent annual uptick among its 164 member countries.

The United States and China, the world’s two largest economies, and increasingly protagonists in global trade, have, by these analyses, each added nearly US$90 billion a year to their GDP. Jamaica, however, is among the countries that haven’t done as well, having, in the face of WTO rules, deindustrialised as domestic industries lost protection. Matters haven’t been helped by the collapse, five years ago, of the Doha Round of international trade negotiations, where the concerns of developing countries were supposed to have been addressed.

SHIELDS WEAK COUNTRIES

Yet, the WTO represents one of the mechanisms in a multilateralist, rules-based global system that as CARICOM leaders stressed at their 2018 summit in Montego Bay, shields weak countries from the capricious and unreasonable behaviour of powerful nations.

Multilateralism, however, has been badly stressed, and weakened, by Donald Trump’s xenophobic ethnocentrism and illiberal instincts that have metamorphosed into his so-called “America first” ideology. One upshot is America’s trade wars with China, and others, as well as other actions that have severely undercut the WTO. America’s blockage to the appointment of judges to the WTO’s appeal body, for instance, has stalled the settlement of trade disputes at the organisation, which the US claims, contrary to the evidence, is biased against it. Countries have been doing workarounds, including negotiating bilateral trade deals.

“We are doing nothing now – no negotiations. Everything is at a standstill,” Mr Azevedo, a 62-year-old Brazilian, said in the aftermath of his announcement. “There is nothing happening in terms of regular work.”

America’s primary claim, of course, is that China, when it joined the WTO in 2001, wasn’t required to fully open its economy fast enough, and, in any event, cheats in global trade. Mr Trump and his supporters wouldn’t mind a new mercantilism in world trade.

While these matters are of vital importance, there is a broader perspective to be taken of the whole range of events, including Mr Azevedo’s resignation.

The WTO is a single component of a global architecture whose overthrow Mr Trump and his supporters would like to effect and whose collapse, without a compensating and improved protective mechanism, would be detrimental to countries like Jamaica.

In this regard, unlike the divided loyalties that characterised the group’s behaviour in the election of a secretary general for the Organization of American States, CARICOM can’t allow itself to be split – with mischief to its own interests – in choosing Mr Azevedo’s successor. Who gets the job will be an important signal of the post-Azevedo direction of the organisation.

As we have suggested before, the question to the global order, including those relating to economic globalisation, posed by COVID-19 is an opportunity for this region to collaborate with others of the South that face similar challenges to be aggressively out front in shaping a response. That work can’t be delayed.