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THE INSTITUTE FOR INTERNATIONAL TRADE
A MESSAGE FROM THE DIRECTOR
This edition of our monthly newsletter contains a rich set of insights into the challenges confronting the world trading system. Australia, being a middle power with extensive trade interests, has a strong stake in how they are addressed.
Recently India and South Africa released a joint (restricted) paper to the WTO’s General Council in which they challenge the legality of certain “Joint Statement Initiatives” (or plurilateral agreements) being pursued by discrete groupings of WTO members. Since JSIs are now the favoured instrument of a range of developed and developing countries for advancing WTO commitments and updating the organization, including Australia, the leaked paper has led to much debate amongst WTO-watchers and Geneva delegates. But what are plurilaterals, and can they achieve what their promoters intend? IIT’s Naoise McDonagh sets out some contours of the debate in our first piece, and argues in their favour.
It is clear that the WTO’s incoming Director General, Dr Ngozi Nkonjo-Iweala, will have her hands full. In our second piece Professor Andreas Freytag provides a thoughtful preview of the high level issues she will need to confront head on. We also canvassed some of these issues in a recent webinar we hosted. From my personal experience with her, I believe she has the capacity and force of character to shake things up. Furthermore, not being a trade wonk could be a distinct advantage, since she can ask the “naïve” questions that need to be asked, and hopefully demolish some conventional wisdoms in the process. Who knows, that may just shake some Geneva delegations out of their trenches and even lead them to grant the WTO Secretariat some rights of initiative, as Professor Freytag provocatively suggests. Wouldn’t that be something?
One of the key issues Dr Ngozi will have to deal with concerns industrial subsidies reform. Many assumptions about China, and the alleged inefficacies of WTO rules to contain Chinese state capitalism in particular, swirl around this issue. In our third piece Professors Weihuan Zhou and Mandy Zheng confront these head on, arguing that not only are WTO rules adequate but that China is more constrained than other members owing to its unique accession commitments. They also offer practical suggestions for how WTO members could nonetheless approach the issue of WTO reform, without targeting China per se.
Finally, China’s industrial subsidies feature centrally in the recently released EU trade policy, and in particular it’s notion of pursuing “Open Strategic Autonomy”. As Weinian Hu argues in our final piece, the EU is pursuing a delicate, issue-by-issue balancing act between holding to its values and pursuing its economic interests. This holds important lessons for other countries looking to engage with the increasingly assertive Chinese state, not least Australia which has recently been on the receiving end of Chinese coercive trade diplomacy.
Professor Peter Draper
POLICY AND ENGAGEMENT
The World Trade Organization’s (WTO) 2014 Trade Facilitation Agreement is the only significant multilateral agreement it has concluded since its inception in 1995. Against that success, significant failures stand out. The inability to complete the Doha Development Round launched in 2001 and the failure to curb fishing subsidies despite the decimation of global fish stocks indicates that multilateralism is floundering. The growth in plurilateral agreements adds to that view and raises questions about the WTO’s future.
By Naoise McDonagh, Senior Lecturer in Political Economy, Institute for International Trade
Six months after the resignation of Roberto Azevédo the World Trade Organization (WTO) finally has a new leader. With Dr. Ngozi Okonjo-Iweala, the WTO is breaking new ground twice: for the first time in WTO history a woman is the Director-General, and for the first time the WTO is headed by an African woman.
By Andreas Freytag, Professor and Chair of Economic Policy, Friedrich Schiller University, Jena and Visiting Professor with IIT
PURSING AN OPEN STRATEGIC AUTONOMY TRADE POLICY AGAINST CHINA: EXPECT POLICY FLUIDITY
The EU’s Open Strategic Autonomy policy approach was first revealed under the Commission’s recovery plan post-Covid, which was released in May 2020.
In relation to the trade aspect, this approach means to reorient the EU towards; 1) Open for business; 2) Self-reliant in a number of strategic areas, and protection from unfair practices that cause distortions in the single market; 3) Independent and assertive to pursue its own interests, while continuing to work with partners around the world to deliver global solutions to global challenges.
By Weinian Hu, Research Fellow at the Centre for European Policy Studies, Belgium
RETHINKING WTO RULES ON CHINESE INDUSTRIAL SUBSIDIES, AND APPROACHES FOR FUTURE REFORM
Industrial policies and subsidies have returned to the centre of policy and academic debates about the future of the multilateral trading system. Despite the pervasive use of such policies and subsidies worldwide particularly in time of crisis such as COVID-19, China remains a top concern for major players (e.g. the US, the EU and Japan) in the system and for leading experts on the World Trade Organization (WTO).
By Weihuan Zhou, Associate Professor, Faculty of Law and Justice, UNSW Sydney & Mandy Meng Fang, Assistant Professor, School of Law, City University of Hong Kong
STUDY WITH US IN 2021
Adaptive Trade Leadership in a Globalised World: Applications open for virtual delivery in 2021!
This world-class collaboration between the Institute for International Trade, Global Trade Professionals Alliance (GTPA) and The University of Sussex (UoS) is designed to equip mid-senior business leaders with a strong foundation in the dynamics of complexity and leadership, as well as the trade knowledge and key skills required to transform their leadership effectiveness, problem solving skills, and ability to respond strategically to trade issues.
Register now to secure your place in the March 2021 offering!
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EVENTS
On Friday, 12 February 2021 the British High Commission in Canberra, in partnership with the Australian British Chamber of Commerce and the Institute for International Trade, hosted an interactive webinar with London-based experts from the UK Department for International Trade to discuss perspectives on how to ensure delivery of pro-innovation outcomes in the Australia-United Kingdom Free Trade Agreement (Australia-UK FTA). This interactive event canvassed a number of key issues during a live discussion between industry leaders and member of the business, academic and policy community from Australia and the United Kingdom.
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