Move WTO to Hong Kong to reflect new global trade order
Jean-Pierre Lehmann says the world trade regime needs a Pacific Charter and a new rules-making body based in Hong Kong to reflect the growing role of Asian players in global trade
If the definition of insanity is doing the same thing over and over again and expecting different results, the World Trade Organisation can be deemed to be insane. The latest failure in an unending stream of failures occurred on July 31 when India refused to implement the Trade Facilitation Agreement that had been reached (in extremis) in Bali at the WTO ministerial meeting in December last year.
Next year, 2015, will mark the 20th anniversary of the founding of the WTO - with 14 of the 20 years having been taken up by the elusive pursuit of the Doha Development Agenda.
It is time to have a radical rethink of the structure and the spirit of the organisation. Former Indonesian trade minister and thought leader Mari Pangestu has proposed that the forthcoming G20 summit in Brisbane should set up an eminent persons group to do precisely that. Her proposal deserves support.
However, ultimately, it will only have an impact if the rethinking is really radical. Tinkering about with or conversing in what tend to be incestuous circles of the like-minded simply perpetuates the state of insanity.
It has to be stressed that the world desperately needs a robust rules-based global trade regime. The fact that currently there is no such thing and that there is no crisis should not be taken to mean that the institution does not matter. The world is experiencing profound and turbulent transformations in a time of increasingly fragile and contested global governance.
The 21st century differs dramatically from the 19th and 20th centuries when the global economy was dominated by a handful of Western powers (along with Japan) that both set and broke the rules. The emergence of a number of very powerful Asian players, China in particular, is the key force. This, combined with technological developments, is transforming the nature of trade, notably global supply chains that are primarily located in East Asia.
For much of the previous two centuries, China featured in the global trade arena only as a victim of Western and Japanese rapacity. Today there are no trade wars as such, but nor is there trade peace. Confusion reigns in a global minefield.