As ‘Trump’s Tarrifs‘ on China become more profound and Brexit negotiations on a trade deal between the UK and EU continue, globalists have stepped forward and presented a series of papers detailing plans for the wide scale reform of the World Trade Organisation.
The first of these was a ‘concept paper‘ published on September 18th 2018 by the EU Commission, which outlined ‘a set of ideas to modernise the WTO and to make international trade rules fit for the challenges of the global economy.’
The reasoning put forward by Commissioner for Trade Cecilia Malmstrom is that the WTO (in its current manifestation) has proved unable to adapt to the ‘changing global economy‘. Therefore, the EU ‘must take a lead role‘ in calling for and implementing reforms.
Three areas are listed as candidates for reform:
- updating the rule book on international trade to capture today’s global economy
- strengthening the monitoring role of the WTO
- overcoming the imminent deadlock on the WTO dispute settlement system.
The Commission also stated that,
- the WTO is now increasingly burdened by inflexible procedures and conflicting interest amongst countries. The arm of the WTO that resolves trade disputes is on the verge of being paralysed because of the blocking of nominations of new WTO Appellate Body Members. And the WTO’s role as a monitoring body is under threat by a lack of transparency from many countries.
According to the World Trade Organisation, the Appellate Body traditionally holds seven members who are all appointed to the Dispute Settlement Body on a four year term. Members can be reappointed after their original term expires. It’s main function is to settle trade disputes between nation states. Currently, the United States and China are both represented on the Appellate Body.
The blocking of nominations to the body refers to Donald Trump’s administration. Back in March this year, it was reported that the U.S. had been stifling appointments to the body.
The Economic Times reported that America’s conduct could render the WTO,
- incapable of hearing and resolving disputes arising out of Washington’s decision to increase tariffs on steel and aluminium and other protectionist measures.
The protectionist rhetoric is never far away from public discourse. The perception here is that actions originating from the White House have resulted in the WTO growing increasingly incapable of settling trade disputes, hence the concentrated clamouring for reform.
Two weeks after the EU Commission’s input came a collaborative paper (Reinvigorating Trade and Inclusive Growth) published by the International Monetary Fund, The World Bank and the World Trade Organisation themselves. The theme is of trade integration being necessary for the global economy to share in prosperity. Extracts from the document include:
- Slow pace of reforms since the early 2000s and the risk of trade policy reversals call for urgency to reinvigorate trade policy reforms.
- Global trade rules that has nurtured unprecedented economic growth faces tensions.
- Opening of trade after World War II through the early 2000s lifted living standards and reduced poverty, but remains incomplete.
- In these times of fast-moving change in the global economy there is a need now more than ever to ensure that the rules, policies, and practices governing global trade evolve and are modernised.
The report concludes by saying that the World Trade Organisation ‘represents no more or less than the willingness of its members to cooperate‘. It urges deepening economic integration and greater interdependence between countries to reinforce the global trade system. The emphasis is on nations to ensure the system ‘continues to evolve, adapt and succeed.’
It is noteworthy at this point to mention that the origins of the WTO stretch back to 1947 when the General Agreement on Tariffs and Trade (GATT) was created following World War II. It eventually became the WTO in 1995, but as the paper makes clear reforms ‘remain incomplete.’
The International Monetary Fund, the World Bank, the United Nations and the beginnings of what became the European Union were all devised in the aftermath of the second world war.
In more recent times, the ‘Great Financial Crisis‘ in 2008 garnered support for reforms to the global financial system in the shape of Basel III which runs through the Bank for International Settlements. But as with the WTO, reforms have yet to be fully implemented, meaning vulnerabilities still exist. Scope remains to go deeper with reforms when another economic crisis breaches the mainstream.
Conflict invariably creates the conditions for greater centralisation of powers to the international level (institutions over individual nation states).
Which is why we must ask the question – in the event of a breakdown in global trade and supply lines – who ultimately would benefit? Just this week the IMF issued further warnings that ‘Trump’s Trade War‘ will damage global growth prospects. Included in their analysis was the continuing uncertainty over the UK fashioning a trade deal with the EU before Britain leaves the bloc.
Reforms and consolation rarely come about inside a vacuum. The scale of change being put forward by these two papers require a consensus. The IMF and others repeatedly warn of the dangers in nations breaking away from globalisation. But just as I contended that the Bank of England needed Brexit to reverse a decade of loose monetary policy, I would also contend that globalist institutions require geopolitical conflict to galvanise support for reforms.
Months before Trump and Brexit, the Trilateral Commission published a paper called, ‘EUROPE’S NEW NORMAL: SIMULTANEOUS CRISES THAT THREATEN TO UNRAVEL THE EU.’ Part way through the authors write about how ‘ever closer union‘ was losing the support of populations within the EU. The remedy put forward for this was stark:
- Some flow into the opposite direction might help Europeans to regain trust in the European process.
In other words, allow resistance to the EU project to build, create social and economic tensions and over time work towards gaining public consent for further integration.
Order out of chaos is a renowned globalist scheme. Crisis must first play out and reach a point where people energetically call for bodies like the IMF to step in and take control of the situation.
As trade conflict between America and China advances, and Brexit threatens to place further pressures on trade between nations, international organisations are actively positioning themselves to take advantage.