THE TTALK QUOTES


On Global Trade & Investment
Published Three Times a Week (with occasional bonus quotes) by
The Global Business Dialogue, Inc.
Washington, DC  20006
No.52 of 2020
TUESDAY, JULY 14, 2020

Click HERE for last Thursday's quote on Censorship and Trade
TOMMOROW'S TRADING SYSTEM

"Hey, make TPP the new WTO."

Nick Giordano
June 22, 2020
CONTEXT
We are in no doubt about the fact that the process of selecting a new Director General of the World Trade Organization is exceptionally important, indeed critical. And tomorrow it will enter a critical phase as the WTO General Council – in a word, the members – begins a series of interviews with the eight candidates. Today’s Current Thoughts on Trade from T erry Stewart gives a rundown of those in the running, and yesterday’s Daily Telegraph article by the UK’s Liam Fox makes his case for the job.  

Yet with all of this WTO activity, the number and importance of those looking for some alternative seems to be growing. Today’s featured quote is one example. It comes from GBD’s June 22 interview with Nick Giordano, Vice President and Counsel for Global Government Affairs at the National Pork Producers Council. America’s pork producers are exporters, and Mr. Girodano is a supporter of the WTO and a strong believer in the need for a rules-based trading system. As for TPP, Mr. Giordano explained that NPPC had been “a huge supporter of TPP.” The organization was naturally disappointed when the President pulled the U.S. out of the TPP process. Still, Mr. Giordano gave the administration credit for recognizing that their decision to withdraw dealt a major blow to U.S. agriculture.  

All of that was in the first portion of our interview with him. It was near the end when Mr. Giordano expressed the not entirely wistful hope that the U.S. might one day return to TPP or CPTPP as it is now known. The text of that portion of our conversation appears in the notes below. Here is our paraphrase of it.

Mr. Giordano: “Hey, make TPP the new WTO.” The problem with the WTO itself is that, though it is meant to be the heart of a global, rules-based trading system, there are members who won’t follow the rules. Add to that the fact that, with the WTO negotiating function more or less moribund, we can’t update the rules. So, it may be that the heart of the system needs to be located in a more manageable corpus. Could TPP or CPTPP be the new home base for the rules-based system? It is worth thinking about. 

Again: You will find the transcript of what Mr. Giordano said in the notes below. The point here is that his speculation about the future of the trading system may have been fleeting, but it was not unique.  

Though the message is quite different, this comment from Siemens CEO Joe Kaeser is in the same category: “ China’s Belt and Road” he said, “will be the new World Trade Organization – whether we like it or not.”  We do not know what gave rise to that observation, but its meaning is clear enough.  We found the quote in Belt and Road: A Chinese World Order by Bruno Maçaes .

Then, more recently, there was USTR Robert Lighthizer ’s comments at Chatham House. In a virtual event commemorating the 100th anniversary of what may be London’s most famous convenor of events and policy discussions, Ambassador Lighthizer suggested the world should make a choice: either a) return the WTO to its (or rather the GATT’s) earlier role as ¬¬ the forum for trade negotiations, where a concession to one was indeed a concession to all, or b) accept that it has been superseded by bilateral (and plurilateral) arrangements in which the best deals are only for those in those more limited agreements and rules of origin reign supreme.  

Here is some of what Ambassador Lighthizer said: 

I think this tendency – a little bit by us, but mostly by Europe – to enter into these massive trade agreements, they have like 77 of them. I think that is one of the biggest challenges to the multilateral trading system. … You can think of it almost as the imperial preference coming back. It’s almost like … some kind of a trade colonialism. And why is it that they should have 77 people that they give better tariff rates to than the rest of the people?  It’s very contrary to the whole notion … .

Now I would distinguish, like, USMA, which you just mentioned, or EFTA or something. I would distinguish that, when you have a group of people, contiguous, that are trying to create more a less a market. That’s one thing. But going all over the world and basically trying to get an edge on everyone in hundreds – well, not hundreds but 77 – bilateral deals. I would suggest that’s a real challenge to the trading system. It’s never what was intended. And it is Europeans acting in a very protectionist and anti-multilateral way. So that’s something I want people to think about. …

The FTAs, in my opinion, we should just get rid of them. We should have a multilateral system or a bunch of bilateral systems. And, to be honest, I can go either way.  

COMMENT
Among the many quite wonderful sonnets by Edna St. Vincent Millay is one entitled Bluebeard . It is her retelling of the French folk tale about the rich man whose former dead wives are locked in the one room in his large house where his current wife is forbidden to go. But, of course, she goes there. In the Millay poem, there are no remains of former wives. The room’s only significance is that it is the one place that Bluebeard kept just for himself.  

In that sense, the tale is a very poor stand-in for the WTO which should exist to serve all of its members equally. And yet, in the WTO’s quest for inclusiveness – symbolized by the Doha Development Agenda – it consciously elevated one class of members above others. We have not touched here on Ambassador Lighthizer’s critique of the Appellate Body, but one could argue that in the WTO’s quest for institutional identity, an identity bolstered by its own jurisprudence, it abandoned an understanding that for many was the bedrock of the organization, specifically the idea that members can only be expected to comply with those rules to which they have explicitly agreed.

Whether you reject them or embrace them, we assume you are familiar with the larger arguments of which the above are but strands. That said, and without claiming too strong a connection between Millay’s Bluebeard and the challenges facing the WTO, here is the full poem. 

Bluebeard
by Edna St. Vincent Millay

This door you might not open, and you did; 
So enter now, and see for what slight thing
You are betrayed … Here is no treasure hid, 
No cauldron, no clear crystal mirroring
The sought-for Truth, no heads of women slain
For greed like yours, no writhings of distress; 
But only what you see … Look yet again: 
An empty room, cobwebbed and comfortless, 
Yet this alone out of my life I kept
Unto myself, lest any know me quite;
And you did so profane me when you crept
Unto the threshold of this room tonight
That I must never more behold your face.
This now is yours. I seek another place. 

In candor, it is that last line – coupled with Ambassador Lighthizer’s comment that he could go either way – that led us to turn this Bluebeard into a note on trade policy.  As for the penultimate line, as a comment on the future of the WTO, it is way too harsh. We see little prospect of major players abandoning the organization altogether. That is not the question. The question is: will the WTO continue to be or, more accurately, will it ever be again, the principal and indispensable meeting place for nations engaged in shaping and reshaping the global trading system?  

Against that background, the selection of the WTO’s next director-general may say as much about the WTO itself as it does about whoever is chosen to lead it.

SOURCES AND LINKS
A GBD Interview is a link to the YouTube video or our June 22 interview with Nick Girodano of the National Pork Producers Council. This was the source for today’s featured quote. Our transcript of the passage quoted is as follows, Mr. Giordano:  

Hey, make TPP the new WTO. Right.  You’ve got countries [in the WTO] that won’t follow the rules. So, maybe it’s not too late. We go back to TPP and we get the right rules. Because if we messed up the first time at the WTO where we can’t get the overhaul we want. … We need a rules-based trading system. I believe, I think a lot of people in this country believe. And I don’t think a rules-based trading system and caring about the American worker are mutually exclusive. And I think the USMCA vote shows that. 

Lighthizer at Chatham House is a link to the YouTube video of USTR Robert Lighthizer speaking to Chatham House.

Current Thoughts on Trade takes you to the Terence Stewart most recent blog, posted today, on the status of the search for the next Director-General of the WTO, including a list of the candidates with some comments on each.  

Choose a Politician is an op-ed by Liam Fox of the UK in support of his own candidacy to be the next Director-General of the WTO.

Filling Azevêdo’s Shoes is a link to the page on the WTO website that explains the process for selecting the next Director-General. 
Call for a Politician is Liam Fox’s op-ed in The Telegraph in which he argues that the WTO needs a political figure rather than a technician as its next Director-General. 

Belt and Road is the Amazon.com page devoted to major Bruno Maçaes' book on this major Chinese initiative.

Bluebeard is a link to an online version of this poem.  The poem is reprinted near the bottom of the page.

TO GET THE TTALK QUOTES IN YOUR INBOX
Or Other GBD Notices, click below.