World Trade Organization: Quo vadis?

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World Trade Organization: Quo vadis?

S.F. Sutyrin, Xueling Guan, M.N. Jovanovic, M. Mashayekhi, J.-M. Paugam, A.P. Portansky, M. Smeets

St. Petersburg State University, 7-9, Universitetskaya nab., St. Petersburg, 199034, Russian Federation. Shenzhen Academy of Renmin University of China, 59, Zhongguancun Street, Beijing, 100872, Peoples Republic of China University of Geneva, Sciences II, 30, Quai Ernest-Ansermet, Geneva 4, 1211, Switzerland Shanghai University of International Business and Economics, 1900 Wenxiang Road, Songjiang District, Shanghai, 201620, Peoples Republic of China Permanent Mission of France to the World Trade Organization, 58, Moillebeau, Geneva, 1211, Switzerland National Research University “Higher School of Economics”, 16, ul. Soyuza Pechatnikov, St. Petersburg, 190008, Russian Federation Institute for Training and Technical Cooperation at the World Trade Organization, 154, Rue de Lausanne, Geneva, 1202, Switzerland

During last couple of years, the academic community, national civil servants in charge of trade policies, and employees of international economic organizations have intensively discussed reforming the World Trade Organization. All participants of the debate tend to agree that the system of multilateral trade regulation in its present form does not match expectations and requirements. There is less unanimity regarding the reasons that have resulted in the poor performance of the institution under review. As for possible ways to solve the problem, existing opinions differ dramatically. Both expert views and official proposals of WTO members (Canada, EU, Japan, China and some others) deal with prospects for the Doha round, modalities of future agreements, decision-making process, and a range of other questions waiting for uneasy answers.

Keywords: international trade, World Trade Organization, trade policy.

Всемирная Торговая Организация: Quo vadis?

С.Ф. Сутырин, Сюэлин Гуань, М.Н. Йованович, М. Машаехи, Ж.-М. Погам, А.П. Портанский, М. Смите. Санкт-Петербургский государственный университет, Российская Федерация,199034, Санкт-Петербург, Университетская наб., 7-9 Шэньчжэньский научно-исследовательский институт Народного университета Китая, Китайская Народная Республика, 100872, Пекин, ул. Чжунгуаньцунь, 59 Университет Женевы, Швейцария, 1211, Женева 4, наб. Эрнест-Ансерме, 30, Шанхайский университет международного бизнеса и экономики, Китайская Народная Республика, 201620, Шанхай, 1900, Wenxiang Road, район Сунцзян, Постоянное представительство Франции при ВТО, Швейцария, Женева, 1211, ул. Moillebeau, 58, Национальный исследовательский университет «Высшая школа экономики», Российская Федерация, 190008, Санкт-Петербург, ул. СоюзаПечатников, 16, Институт подготовки кадров и технического сотрудничества при Всемирной торговой организации, Швейцария, 1202, Женева, Рью де Лозанна, 154

На протяжении последних нескольких лет проблема реформирования деятельности Всемирной торговой организации является предметом оживленной дискуссии различных профессиональных сообществ, причем интенсивность дебатов и их острота очевидно нарастают. Это связано с тем, что, с одной стороны, вопреки расхожему суждению, применительно к данным спорам рождение истины пока еще не состоялось, с другой -- расширяется круг нерешенных проблем. Представленный в статье материал призван помочь заинтересованному читателю оценить сложившуюся ситуацию и сделать вывод о том, есть ли «свет в конце туннеля».

В последние годы проблемы реформирования международной торговой системы (МТС) и Всемирной торговой организации (ВТО) как ее институциональной основы активно обсуждаются и в академическом сообществе, и представителями национальных регуляторов, а также сотрудниками международных экономических организаций. При этом необходимость осуществления серьезных преобразований не просто так или иначе признается всеми, но и рассматривается подавляющим большинством заинтересованных лиц в качестве важнейшей и неотложной задачи в области формирования и осуществления торговой политики.

Представляется, что такое единодушие объясняется двумя обстоятельствами. Во-первых, практически никто не оспаривает, что необходим некий универсальный -- и по сфере предметно-отраслевого охвата и по уровню легитимизации -- свод «правил игры». Без этих правил система погрузится в состояние полного хаоса, в конечном счете с неизбежностью ведущего к масштабному свертыванию внешнеторговых связей с вытекающими из этого негативными последствиями для всех участников мирового сообщества.

Во-вторых, всеми признается, что в нынешнем виде многостороннее регулирование торговли не соответствует ожиданиям и предъявляемым требованиям. В отношении наиболее ярких проявлений такого несоответствия можно также констатировать «завидное» единодушие. ВТО все менее способно решать ключевые задачи, ради реализации которых она создавалась. В части как минимум трех из пяти ее функций, зафиксированных в соглашении об учреждении Всемирной торговой организации, -- контроля за выполнением соглашений и договоренностей, проведения многосторонних торговых переговоров и разрешения торговых споров -- это проявляется со всей очевидностью. Действительно, многие государства все чаще допускают более или менее серьезные нарушения принятых на себя обязательств, которые не влекут за собой серьезных последствий. Какой-либо приемлемый выход из тупика, в котором оказался начатый еще в 2001 г. Дохийский раунд многосторонних переговоров, не просматривается. Угроза того, что приостановка деятельности апелляционного органа приведет в обозримом будущем к блокировке функционирования всего механизма по урегулированию споров (наличие которого считается чуть ли не главным преимуществом ВТО по сравнению со многими другими международными организациями), более чем реальна.

Все это происходит на фоне беспрецедентного роста числа региональных торговых соглашений, который следует рассматривать одновременно и как результат и как одну из причин переживаемого многосторонней системой регулирования кризиса. В складывающихся условиях региональные соглашения для кого-то выступают «вторым лучшим вариантом решения» (second best solution) -- той простой бумагой, на которой пишут, за неимением гербовой. Для других эти соглашения -- безусловно, предпочтительная альтернатива якобы абсолютно нежизнеспособному в современных условиях варианту регулирования в рамках ВТО. В данной связи невольно вспоминается характеристика СНГ как инструмента цивилизованного развода.

Меньшее единодушие наблюдается в оценке тех причин, которые привели МТС к нынешнему состоянию, причем в отношении того, что нужно делать, мнения не просто не совпадают, а зачастую прямо противоположны. В первом случае речь идет об излишней разнородности организации, о недостаточно четко прописанных правилах, нормах и процедурах, об отсутствии ярко выраженного лидера, заинтересованного в продвижении переговорного процесса и обладающего для этого достаточным авторитетом, об изменении геополитической обстановки. Во втором случае и суждения экспертов и официальные предложения ряда стран -- членов ВТО (Канады, ЕС, Японии, КНР и др.) касаются судьбы Дохийского раунда, формата договоренностей, характера принятия решений и целого ряда других вопросов, на которые предстоит искать непростые ответы.

Определенный вклад в решение поставленной проблемы постарались внести участники круглого стола на тему «ВТО: Quo Vadis?», прошедшего 24 октября 2019 г. на экономическом факультете СПбГУ в рамках 17 международной конференции «Международная торговая система: проблемы и перспективы». На обсуждение были вынесены шесть вопросов. В статье представлены ответы на них, которые дал каждый из дискутантов.

Ключевые слова: международная торговля, Всемирная торговая организация, торговая политика.

С.Ф. Сутырин

Question 1

The latest edition of World Trade Statistics reasonably claims that in contrast to previous decades, “world trade and GDP have grown in tandem for the last ten years” [ WTO, 2019]. Should the WTO care about this slowing trend and perceive it as a result of insufficient efforts to promote further trade liberalization?

Сюэлин Гуань

В последние годы замедление роста международной торговли является неоспоримым фактом. На наш взгляд, это стало следствием ряда причин.

Во-первых, поскольку основой международной торговли является международное разделение труда (МРТ), то мы должны рассматривать вопрос с данной точки зрения. С 1991 по 2007 г. ежегодные темпы прироста мирового ВВП были близки к 4 %, а среднегодовые темпы прироста международной торговли составляли около 7 %. Это произошло, в частности, потому, что большое число стран с развивающейся экономикой, представленных Китаем, стали более активными участниками МРТ (особенно производственных цепочек, которые формируются крупными многонациональными компаниями). В результате импорт и экспорт деталей и компонентов вызвали увеличение общего объема международной торговли, обусловили ее быстрый рост. Поэтому в свое время ОЭСР заявляла, что международная торговля выступает двигателем мирового экономического роста.

Во-вторых, на развитие международной торговли повлияли вялое восстановление мировой экономики после глобального финансового кризиса 2008-2009 гг., замедление экономического роста крупных экономик. Согласно последним данным, опубликованным МВФ, темпы прироста мировой экономики в 2019 г. составили 3,3 % (худший показатель со времени последнего финансового кризиса), и ожидается, что более вялую динамику продемонстрируют % стран мира. В свою очередь, ВТО прогнозирует рост мировой торговли в 2019 г. на минимальном уровне за последние три года.

В-третьих, нельзя отрицать, что ведущим игроком в международной торговле и в разработке правил ВТО в силу своей экономической мощи выступают США. Однако проводимая ими протекционистская политика и развязанная торговая война с Китаем являются важными причинами замедления мировой торговли в последние два года.

Miroslav Jovanovic

Globalization was the principal ballgame for the period 1980-2005. Trade and FDI had a generally upward slopping trend. Then came several important events. First is the global financial crisis provoked by financial alchemy. Economic growth and trade suffered. Second, China's domestic wealth increased, hence production was also for the huge domestic market. The Chinese middle class is expanding both in size and in wealth. This domestic market of about 600 million consumers is bigger than the entire EU market. Third are various economic sanctions all around the world. Fourth are inward-looking tendencies in the US. Hence, a kind of statistical plateau in trade should not come as a big surprise.

Mina Mashayekhi

There is mounting concern regarding the health of the global economy, which has hitherto relied on trade and investment as its main drivers of growth. International trade data shows a slowdown in growth between 2012 and 2014, then a downturn in 2015 and 2016, and a rebound in 2017 and 2018. In 2019 trade growth in merchandise stalled at 1.2 %. The value of global trade grew by 10 % in 2017 and 2018 to reach 25 trln doll. Projections from the World Trade Organization indicate that global trade is expected to grow by about 3.7 % per year between 2019 and 2021, outstripping global output growth by 0.7 %. The IMF slashed its global growth forecast for 2019 to just 3 %, the slowest pace since the global financial crisis and recession of 2009. Trade uncertainties and tensions indicate that trade growth could be equal to global output growth in this period. In the first quarter of 2019 export growth stalled in the United States and China and was negative for the European Union. Data also indicates falls in exports for other developed countries and South Asian developing countries. Since 2012 South-South trade has also stalled with share of South-South trade in global trade remaining at 28 %. Services sector remains dynamic and exports reached 5.8 trln doll. Services exports are growing faster than goods and have been more resilient during the downturns of 2008 and 2015. Commercial services trade in value terms grew more slowly in the first half of 2019. Developing countries have been able to increase their share of services trade from 23 to 30 %.

Investment flows have fallen by 13 % to 1.3 trln doll. This was the third consecutive fall in FDI and indicates a trend towards reduction of investment flows. Inflows to the US and the EU has dropped whilst flow to developing countries remained stable and rising by 2 %. Most investment is also taking place in services sectors. With “servicification” picking up pace, it is estimated that liberalization of services value added incorporated in goods exports which is not covered by data could reach an increase of global trade of over 500 bln euro by 2025. Investment policies are being reformed to safeguard essential security interests associated with cross border investments.

As a result of the trade war the value of trade between the United States and China declined by more than 15 % in the first quarter of 2019 compared to the previous year and is expected to decline further [International Monetary Fund]. As of June 2019, about 400 bln doll.of bilateral trade between the United States and China was subjected to additional tariffs [BBC News, 2019; China Briefing, 2019]. There is also diversion of some bilateral trade to other countries. UNCTAD estimates that the European Union will benefit by capturing about 70 blndoll. of bilateral trade subject to tariffs by the United States and China, with Japan, Mexico and Canada, and Vietnam being the other key beneficiaries, capturing more than 20 bln doll. each [UNCTAD, 2019a; 2019b].

There is also the real economy and political impact of nationalist and populist movements on breakdown of the trading system resulting from lack of trust, de-globalization, de-industrialization, structural transformation, on-shoring shortening of supply chains, jobs concerns, migration, lower investment flows, danger of recession and lack of investment by firms which has affected the market and liberalization efforts.

The WTO secretariat and members should care about the slowdown in trade, negative impact of trade liberalization, the existing trade tensions, protectionist measures and security concerns. Here there are complex real economy issues and trade, monetary issues and structural adjustment developments that are in play. There has been significant trade liberalization and facilitation actions since the Uruguay Round as a result of accessions of China and Russia to the WTO, Information Technology Agreement (ITA), Investment Facilitation Agreement (IFA), Government Procurement Agreement (GPA), Trade Facilitation Agreement (TFA) and unilateral liberalization efforts. Efforts toward trade liberalization in the Doha Round has been unsuccessful as a result of lack of respect for the Doha mandate on development issues which provided for correction of the imbalances and asymmetries and strengthening of the Special and Differential Treatment (SDT) and provision of more market access to developing countries. WTO missed the opportunity for making the necessary corrective measures and compromises to achieve results in market access and rules area. Priority was given to so called Singapore issues that had been dropped from the Doha mandate as well as newer issues of e-commerce rather than concentrating on core trade issues of the built-in Agenda of Agriculture and Services. Trade liberalization is being pursued unsuccessfully outside the WTO such as under Trade in Services Agreement (TISA) and pursuit of non-MFN plurilaterals which have been counterproductive to provide the necessary cooperative framework and trust to deliver multilateral outcomes. Liberalization is also being undertaken under Regional Trade Agreements (RTAs), with Regional Comprehensive Economic Partnership (RCEP) being the most recent to be concluded.

Jean-Marie Paugam Disclaimer. The opinions expressed in this paper are those of its author. They are not intended to represent official French positions or opinions. Any errors are attributable to the author.

First, let me start with the best kept secret among trade negotiators: in the short-term, there is not much of a link between global trade liberalization and trade expansion. In the short-term, macro-economic trends in growth of global demand and currencies rates are the real determinants of trade. The best proof of this can be obtained just by observing that the best performance of world trade, with export growth rate consistently doubling global GDP growth, have been scored at a time when WTO negotiations provided absolutely no results in terms of trade liberalization.

Trade liberalization provides much more long-term support, by providing pre-visibility and certainty to business decisions about exports and investment. The reverse is not necessarily true, so it is fully asymmetrical: we have seen that restrictive or protectionist trade policies, such as the current trade war between China and the United States, can, in a very short-term, lead to a slow-down in world trade. This is exactly the situation that we are living in right now.

Second, there have been many analyses about why growth in global trade has been slowing down, even before the trade war launched by the Trump Administration. Most of the identified causes seemed to relate to structural trends.

The first seems to be that value chains are reaching a certain level of maturity: over the last twenty years we have witnessed a very dynamic process of fragmentation in international trade and production processes, which greatly promoted trade and processing of intermediate products. Everybody knows the story of the Barbie Doll: from Saudi Arabia comes the oil, which is refined elsewhere into ethylene; then the ethylene is processed in Taiwan into vinyl plastics that provide raw material for the doll's body; Japan makes the nylon hair; and everything is assembled in China before being exported to the US.

A second major trend could be the progressive transition of the Chinese economy from an industrial goods export-led model to a service economy much more driven by domestic demand.

All these are good enough reasons for global trade to slow-down, with or without trade liberalization, and without it being necessarily a negative phenomenon per se.

The third and last point: should the WTO care? Of course it should, if only to identify what causes are generating the slow-down, and distinguish between structural macrotrends and policy restrictions calling for action. In fact, the WTO already does this by monitoring trade restrictions and liberalizing measures: the WTO issues a report on this every six months. Today the conclusions are adamantly concerning: because it has become clear that the trade war has become the number one factor explaining the downward trends in global trade. Here the WTO definitely has a role to play: both to ensure that trade rules are not being violated, and to provide a forum for negotiating the prevention and dismantling of unjustified restrictive measures.

Алексей Павлович Портанский

Торможение процесса либерализации мировой торговли в последние годы, безусловно, имело негативное воздействие на темпы роста торговли, а вслед за ней и глобальной экономики. Вместе с тем одна ВТО не может нести ответственность за эти негативные тенденции -- после 2008 г. мировая экономика находилась под влиянием разразившегося мирового экономического кризиса. В настоящее время существуют серьезные прогнозы наступления в 2020-2021 гг. нового мирового кризиса, среди причин которого называют как торговые войны, так и ряд других негативных явлений финансово-экономического характера, находящихся за пределами компетенции ВТО. trade global economy liberalization

Maarten SmeetsDisclaimer. The opinions expressed in this paper are those of its author. They are not intended to represent positions or opinions of the WTO. Any errors are attributable to the author.

No, I am not an adapt of the thought that efforts to liberalize have weakened. It is true that the Doha Development Agenda (DDA) has not produced expected results, and negotiations in agriculture and non-agricultural market access (NAMA) are on hold. But despite those realities, trade has been liberalized significantly over the past ten years or so. That was done through reduction of border protection (tariffs), the conclusion of the ITA (a zero for zero plurilateral agreement with multilateral application), reduction of distortionary practices, including agricultural subsidies and the elimination of export subsidies, the multilateral TFA, which entered into force over 2 years ago. One also should take into consideration the accession of many new members that joined the WTO, most of whom have made significantly more important market opening measures than original WTO members. On top of that, we experienced the opening of markets through a whole range of RTAs in all parts of the world, in many cases driven by the desire to develop regional production hubs. Finally, it's worth noting the significant domestic reforms undertaken in many countries, effectively leading to a further opening of and competition within markets. That being said, a new and worrisome trend has set in to protect domestic markets through increases in tariffs and the application of non-tariff measures (NTMs). These are well documented in the WTO's monitoring reports and have the attention of the WTO membership. These measures undermine trust in the trading system and affect prices of consumer goods and investment decisions, given the uncertainty that is created. Many enterprises are holding back on their FDI, sometimes relocating and/or “reshoring” their production facilities, thus reducing flows of trade. What is foremost important for the WTO Membership is to ensure that markets remain open, protectionism is resisted, and consumers can freely choose their goods at competitive prices.

Question 2

Many experts, while discussing actual stalemates in multilateral negotiations/DDA, sensibly argue that among the reasons for this stalemate are: principle of single undertaking, consensus-based decision making, vague ways in defining many basic rules and provisions, and enormous diversity and large number of the member-states. At the same time, one could suggest that it was precisely these elements of multilateral trading system that tremendously contributed to survival and, generally speaking, progressive development of the GATT/WTO institutional framework. In other words, the WTO in a way became a victim of its own success. How would you comment on that?

Сюэлин Гуань

ГАТТ/ВТО играет важную роль в либерализации торговли и инвестиций и обеспечении роста мировой экономики. Причины тупика в раунде в Дохе, на наш взгляд, заключаются в следующем.

Во-первых, важной причиной провала переговоров в рамках Дохийского раунда является несовершенный механизм принятия решений ВТО. Каким образом 164 государствам-членам достичь консенсуса? Интересы развитых и развивающихся стран не одинаковы, существуют также различия в группе развитых стран, и есть разногласия в группе развивающихся стран. Очевидно, что механизм принятия решений должен быть реформирован. Есть много способов реформирования -- например, можно использовать принцип % голосов, как в ООН, когда решения принимаются большинством стран-участниц (% голосов).

Во-вторых, международная торговля является наиболее частой и очевидной сферой конфликта интересов многих стран мира. С момента начала переговоров в рамках Дохийского раунда соотношение сил на мировой арене сильно изменилось, в основном благодаря быстрому росту стран с формирующейся рыночной экономикой, что усилило их позиции при ведении переговоров с развитыми странами. Это отличается от прежнего характера их участия в переговорном процессе, когда они вынуждены были подчиняться решениям развитых стран. Можно сказать, что в прошлом функционирование ВТО базировалось на том, что интересы развитых стран, таких как США, были гарантированы, их богатство увеличивалось, а торговые интересы огромного числа развивающихся стран не учитывались, что приводило к потере ими своего богатства. С присоединением к ВТО Китая и России, ростом других развивающихся стран традиционная модель баланса интересов была нарушена, появились многочисленные коалиции со своими интересами. Самым важным вопросом на переговорах в рамках Дохийского раунда является вопрос о торговле сельскохозяйственной продукцией. Развивающиеся страны требуют от развитых отмены сельскохозяйственных субсидий, тогда как развитые страны требуют от развивающихся дальнейшего открытия своих рынков. Обе стороны не желают уступать друг другу, в итоге переговоры зашли в тупик.

В-третьих, США пытаются изменить правила ВТО, поскольку считают, что нынешние правила им не подходят. Например, в последние два года США блокируют дополнительные выборы судей Апелляционного органа ВТО. В результате после 10 декабря этого года Апелляционный суд приостановит свою деятельность, потому что число действующих судей не позволяет обеспечить кворум, необходимый для рассмотрения дел. Намерение США очевидно -- заменить работу Апелляционного органа решениями арбитража. В отличие от решений Апелляционного органа, решения арбитража не являются обязательными, их исполнение полностью зависит от воли сторон. Обладая большой мощью, США всегда смогут одерживать верх в двухсторонних переговорах, поэтому в торговых спорах не будет победителя.

Miroslav Jovanovic

I agree with this conclusion. However, I would add that the West, especially the US, preached and profited from the liberal trade regime after the Second World War. But that was the period during which this liberal trade regime applied only to half of the globe. During that time, Latin American countries had inward-looking economic policies, while most of the rest of the world had state-run economies, as those countries had socialist and communist regimes. These countries were not serious economic rivals to the Western world. Now, they are. The “liberal” West worries, as it is not any more the one that calls the economic and commercial tune. Like many ideals, free trade is more attractive when you don't really have to live by it.

Mina Mashayekhi

Single undertaking, consensus-based decision making, vague way of defining rules and provisions, constructive ambiguity, enormous diversity, and a large number of members do render trade negotiations more difficult and complex. These, however, were not the main reasons for the stalemate. These factors also led to progress in negotiations, democratic system of decision making, and universality of the organization.

The major factors that led to the stalemate in the multilateral negotiations were related to the design of an expanded and unrealistic mandate of the Doha Round, instead of focusing on the core built-in agenda of agriculture and services, and the lack of will to deliver on the Doha Development Round by correcting the imbalances in the Marrakesh Agreements and lack of implementation of the results of the Uruguay Round, particularly those in favor of developing countries. The sequencing and the time lines of the negotiations were not respected, correcting imbalances and strengthening SDT first and then dealing with the remaining market access and rules issues. Moreover, the key built-in Agenda of Agriculture and Services was not given priority attention. Those benefiting the most from the trading system were unwilling to make the necessary compromises and share the benefits more fairly and equitably.

There is an increasing trend towards unilateralism and protectionist measures recorded by WTO and Research by Global Trade Alert [Evenett , Fritz, 2019], which amount to 877 in 2019, close to 900 recorded in the same period last year, which increased from an average of 514 protectionist measures in the previous five years. There is also the largest fall in liberalizing measures since 2009 -- only 270 which is down from 352 in the same period last year. For example, China only took 35 pro-trade measures last year and 25 measures in 2019. There are also big declines in pro-liberalization measures by Brazil, from 50 to 30, India from 29 to 15, and Indonesia from 32 to one. Local content measures are also on the rise, e. g. in China, Indonesia, and Russia. National security concerns and measures particularly investment screening and countries being designated as strategic competitors (EU and US) regarding China. This trend has worsened as reported in the WTO, OECD and UNCTAD G20 joint report.

China has been a miracle and a game changer in three decades, rising to be the number one exporter and importer. This has had a deep impact on all other countries. China needs to share the benefits of the trading system and make comprises. Concerns regarding subsidies, state-owned enterprises (SOEs), TRIPS implementation, TRIMS and local content measures, and China 2025 and digital economy have put a strain on the system and world economy.

Most importantly, the multilateral trading system is an important pillar of the partnership for development, as stipulated in Sustainable Development Goals (SDG), and plays a key role in the achievement of specific SDGs, e. g. access to essential and infrastructural services such as health education, telecommunication and finance, graduation of least developed countries (LDC) through trade growth and preferential treatments, and elimination of harmful fisheries subsidies. Given the stalemate in the trade negotiations, the objectives of various goals, e. g. fisheries subsidies, will not be achieved by their target date. Goal 14 is dedicated exclusively to the conservation and sustainable use of the oceans, seas and marine resources. Target 6 of the Goal provides for the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and overfishing and for elimination by 2020 of subsidies that contribute to illegal, unreported and unregulated fishing, recognizing appropriate and effective special and differential treatment for developing countries and least developed countries within the WTO context.

Jean-Marie Paugam

I would agree that, yes, the key elements that have been mentioned (single undertaking, consensus, diversity...) have greatly contributed to the success of the GATT, up to the creation of the WTO. Yet, one must not forget that the system has undergone massive structural changes since the GATT.

The GATT was de facto a western club during the Cold War, gathering similar market-oriented economies. Some developing countries were already there, but most of them were very small traders and their interest concentrated on commodities export. This situation is well over since globalization and the WTO: a vast majority of members are now developing countries; within the WTO there now co-exist very different economic models (non-market economies, transition economies, newly industrialized...), along with China as one-of-a-kind.

GATT mostly dealt with industrial tariffs, which made it pretty easy to exchange equivalent trade concessions: I give you auto parts, you give me chemical products, etc. This is pretty simple. The extension to agriculture and services totally changed the game, in terms of political economy of the traded sectors and in terms of measuring the value of reciprocal concessions.

Lastly, the Uruguay Round added to the basket a lot of new rules: every country now has to balance exchanges of commitments on rules and disciplines against market access concessions. For example, how do you square this: I give you market access to services of pharmaceutical distribution, if you accept some new disciplines under the technical barriers to trade agreement or the protection of geographical indications in the intellectual property agreement (TRIPS)? In that sense I think that the first blatant lesson from the failure of the DDA is that it is almost impossible to trade rules against market access, especially if you want to do that between 164 members, out of which % claim to be developing countries.

So where do we go from here? How to move forward?

First, forget about sacrosanct consensus, allow plurilateral initiatives: that is, let those who want to move forward move forward, and let the others do so at their own pace. We Europeans are used to this through what we call “strengthened cooperation”, which unites smaller groupings than the 28 countries (the Euro zone or the Schengen agreement on visas). And plurilateral initiatives already existed under the GATT: in fact, all the rules (codes) negotiated under the Tokyo Round were initially plurilateral.

Second, allow for differentiation of the developing countries within the WTO. It has become morally, legally, economically unacceptable that developing countries would claim to be treated under a “one size fits all” special and differential treatment. This debate lies at the heart of what the EU and the US have initiated under the label of WTO Reform.

Алексей Павлович Портанский

Несомненно, система ГАТТ/ВТО со временем стала жертвой своего собственного успеха. Действительно, механизм принятия решений путем консенсуса, принцип «единого пакета» обеспечили надежность правовой базы и эффективность механизма по разрешению споров, придав ВТО в этом плане уникальный характер (ни один другой универсальный институт в мире не располагает подобным механизмом). Однако глубокий кризис переговоров Дохийского раунда, замедление важнейшей функции ВТО генерирования правил заставил искать выход из создавшегося положения. Подписание в 2013 г. многостороннего соглашения об упрощении процедур торговли (TFA) и его вступление в силу в 2017 г. дало основание говорить о начавшемся де-факто постепенном отходе от принципа единого пакета. Можно предположить, что с развитием разного рода плюрилатеральных инициатив дальнейший отход от этого принципа продолжится.

Что касается механизма консенсуса, то, вероятно, в рамках предстоящего реформирования ВТО он также будет предметом изменения. Скорее всего, придется преобразовывать механизм консенсуса в тот или иной вариант голосования.

Maarten Smeets

Clearly, the rapid increase of WTO membership itself is a testimony to the success of the multilateral trading system. At the same time, under the consensus rule for decision making, combined with the with the widely different levels of economic development and hence objectives and priorities of the membership, it becomes more challenging to achieve results. One should remember that at the start of the DDA, many developing countries (DCs) were still digesting the outcome of the Uruguay Round, which they had signed off to, without fully grasping the economic and policy implications. Therefore, at first, they reluctantly engaged in the negotiations, perhaps driven by the fact that the DDA was to be a development round.

Signs of a change of mindset by developing countries were first seen in the eighties, with many of them starting to engage in trade negotiations, opening their markets, and taking upon themselves commitments and obligations that were new to many of them. Many developing countries had managed to reach higher levels of development through more open and liberal policies, instead of relying on inward looking policies, including import substitution. It should not come as a surprise then that many of those countries were initially reluctant to assume new and more obligations, as they hadn't fully absorbed the “older” commitments and obligations. Hence, members find themselves in a situation where some, mainly the more developed countries, want to accelerate the pace of discussions and actively engage in negotiations on more topical trade issues relevant for today's patterns of trade (investment facilitation, e-commerce, digital trade, MSMEs etc.), whereas others are more interested in focusing on more traditional topics relating to tariffs for goods and agricultural products, before engaging in new areas, where they cannot fully grasp the policy implications. Here there is a significant role to be played by the WTO Secretariat in capacity building, educating beneficiaries of the rules, and assisting them to better understand the issues that are on the table. Also, I see a clear and potentially powerful role for WCP (Chairs), in a way, “educating” the policy makers, through economic analysis and providing policy advice.

The question is how to find the right balance between those who want to go faster and those who are not ready for switching to the next gear. The system must remain inclusive, and the consensus-based approach should foresee room to satisfy all members with different levels of ambition. This is a challenge and the crack became apparent in Nairobi in 2015, where Ministers clearly put their cards on the table, as reflected in the Ministerial Declaration, where it is made obvious that there are divergent approaches to the trade negotiations and a desire to move forward along different paths. At a next stage, a modus vivendi was found in Buenos Aires, where members agreed to move forward on some of the “new” issues, which led to the creation of various “friends” groups looking at the various issues, such as investment facilitation, e-commerce etc. Interestingly, some of these groups have a large number of countries actively engaging and participating in the debates, including DCs, such as Friends of Investment Facilitation for Development (FIFD) which have nearly 80 participants, as many of them see a direct potential and economic interest in the debates.

Question 3

From the point of view of some experts, one of the roughly decade-long trends in public attitudes toward the international trading system is the widely shared loss of trust in trade liberalization. That results from the perception of trade as a non-inclusive process, either leaving too large a share of people all around the globe without any benefits, or even making them worse off. In turn, international trade negotiations allegedly tend to focus rather on the stakes and concerns of businesses and multinational companies, than on priorities and interests of people [Bloomberg]. Two components of the respective question: a) would you agree; b) is that a real problem for the WTO?

Сюэлин Гуань

Я согласна с этой точкой зрения. Наиболее острая проблема, с которой сталкивается нынешняя международная торговая система, -- это отсутствие учета торговых интересов и различных моделей развития развивающихся стран. На самом деле, авторитет ВТО во многом обусловлен ее способностью учитывать интересы всех стран-участниц, в противном случае привлекательность организации и ее правил снизятся. Если многосторонней торговой системе не хватает инклюзивно-сти и она не может реагировать на новые вызовы в сфере международной торговли и учитывать торговые интересы, то серьезный кризис неизбежен.

Самое главное, на наш взгляд, -- это то, что ВТО не может обеспечить развивающимся странам торговых выгод в условиях экономической глобализации. С 1990-х гг. многие развивающиеся страны стали активными участниками международного разделения труда, включились в глобальные производственно-сбытовые цепочки, существенно либерализовали внешнюю торговлю и инвестиционный режим. Глобализация привела к росту их внешней торговли. Согласно статистическим данным, в 1995 г. доля развивающихся стран в торговле товарами составляла всего 27 %, а к 2015 г. она увеличилась до 49 %.

В процессе глобализации транснациональные корпорации развитых странах рассредоточили процесс производства и продаж в общемировом масштабе в целях минимизации производственных издержек, что привело к деиндустриализации данных стран, сокращению в их экономике доли обрабатывающей промышленности. Соответственно, возможности трудоустройства в производственном секторе в развитых странах резко снизились. Наряду с этим, развитые страны во главе с США неожиданно обнаружили, что глобализация не только выгодна владельцам капитала развитых стран, но и способствует повышению общей мощи развивающихся экономик. Многосторонняя торговая система, которую они создавали и поддерживали в течение многих лет, стала «зонтиком» для экономических интересов развивающихся стран. По причине деиндустриализации развитые страны (за исключением Германии и Японии) не смогли в полной мере извлечь выгоды из процесса экономической глобализации, поэтому голоса за реформирование международного торгового порядка исходят в основном от этой группы стран, которые надеются, что их интересы получат эффективную защиту в рамках многосторонней торговой системы.

При ответе на вопрос о том, что торговые переговоры сосредоточены главным образом на интересах многонациональных корпораций, а не простых людей, следует проанализировать природу капитала. Сущность капитала заключается в получении прибавочной стоимости, и капитал может учитывать интересы простых людей и потребителей только после получения сверхприбылей. Со времени основания ВТО правила организации защищали интересы капитала. В процессе глобализации многонациональные корпорации в крупных развитых странах получают чрезмерную прибыль и огромные экономические выгоды, и прибыль в основном создается ими за рубежом. Например, на зарубежные операции американских ТНК приходится половина всей прибыли США. В определенной степени зарубежная экспансия ТНК сокращает занятость в собственной стране. Если правительство страны, в которой располагается материнская компания ТНК, не будет реагировать на данную ситуацию, то это приведет к ущемлению интересов определенных групп, что вызовет недовольство с их стороны. Лучшим подтверждением этому являются оккупация Уолл-стрит в США и движение французских «желтых жилетов».

Если говорить об интересах простых граждан, то ООН в своих документах, начиная с «Целей развития тысячелетия» до «Повестки дня в области устойчивого развития на период до 2030 г.» ставила целью искоренение крайней нищеты во всем мире. Но США и развитые страны не выполнили своих обязательств, хотя декларации были многообещающими. Надежды оказались пустыми, и мы должны исследовать причины их несостоятельности на более глубоком уровне.

Miroslav Jovanovic

I agree. Huge corporations have an upper hand and they tailor public regulation according to their private needs. I can just refer to the Trans-Pacific Partnership (TPP) negotiations and US Senator Ron Wyden, who stated in 2012 that the majority of Congress was being kept in the dark as to the substance of the TPP negotiations, while representatives of US corporations -- like Halliburton, Chevron, PHRMA, Comcast, and the Motion Picture Association of America -- were being consulted and made privy to details of the agreement. More than two months after receiving the proper security credentials, Ron Wyden's staff was still barred from viewing the details of the proposals that US trade representative (USTR) advanced. The problem, no doubt, also concerns the WTO. Does the WTO serve private giant companies or does it serve the people?

Mina Mashayekhi

The trust deficit is a major problem for the credibility and legitimacy of the WTO and the multilateral trading system. Trade liberalization has been pursued without adequate attention to the impact on countries' economic and social frameworks safety nets, deindustrialization, need for diversification, jobs and MSMEs, etc. Trade negotiations have often been undertaken in a non-transparent manner without the involvement of all the key stakeholders, including civil society. There has been a serious backlash as the negative impact of globalization and unsustainable trade liberalization has caused poverty, a rise in unemployment, and inequality within and between countries.

This has led to social unrest and populism, e.g. America First, Brexit, and “Gilet Jaune” in France, as well as backlash towards the elite and multinational companies focused on corporate profits and tax avoidance. Trade agreements need to be fully assessed prior to adoption to ensure they do not have a negative impact on people and the environment. GATS is the only WTO agreement which provides for the assessment of trade in services and liberalization negotiations. Trade liberalization should be accompanied with adequate and operational adjustment support mechanisms, SDT for developing countries, social safety nets and other appropriate supply capacity building and reskilling schemes adequate compensation and assistance for those losing from liberalization. Trade agreements and policies need to be coherent with the social, macroeconomic, and sustainable and inclusive developmental as well other key policies and be achieved through multistakeholder involvement.

Jean-Marie Paugam

I agree that there is yet a great need to rebalance the WTO Agenda between trade and non-trade concerns, but I do not find argument about multinationals really compelling. It is true that especially in the past, the WTO tended to overlook non-trade concerns, such as health or the environment. One good and famous example was the battle, started in Doha in 2001, between pharmaceutical companies and developing countries over the right to issue mandatory licensing for manufacturing generic drugs to fight epidemics.

On the other hand, one also has to be realistic: trade rules are to be made first for those who do trade, and multinationals are key players in international trade, so it is not indecent to listen to them. Furthermore, on some issues, such as the environment, corporate responsibilities on human rights, or labor standards, there numerous cases where multinational policies are much more advanced now than WTO in discussions.

I agree more with the criticism of trade non-inclusiveness. For me trade economists and the trade negotiating community have been big sinners in overselling the benefits of free trade, without considering its adverse impact. Over the last 30 years they always wanted to see only one side: the aggregated positive effects derived from trade on economic growth. To the point that they completely overlooked some central elements of the trade theory.

First: there has been a great underestimation of the social disruption created by trade. When looking for the causes of job destruction, twenty years ago the mainstream economist's answer was: “trade has almost nothing to do with it, it's all because of technological changes”. You may want to re-read “Globalphobia: Confronting Fear about Trade”, which claims that in essence, trade is only good, and fears are irrational [Burtlesset al., 1998]. What is very surprising here is that the inner essence of David Ricardo's theory about comparative advantages precisely states otherwise: it is in the nature of the specialization process that some sectors are going to lose jobs. Today the WTO economist's argument still goes: “Only 20 % of job destruction is explained by trade”, this is the estimate coming from the WTO secretariat. I do not think that the people who lose their jobs will find much solace in such an argument. To the contrary, it might even be politically counterproductive.

The second great mistake: the trade community has systematically been overlooking the need for specific and sometimes structural compensation for losers. Even when they admitted that trade could cause social damage, the trade people have been always obsessed only by the positive aggregate long term positive effects of trade. In essence: the aggregated effects being always positive, the losers will soon recycle themselves in the economy. But in reality there is absolutely no reason why the benefits from trade would be evenly distributed across territories and communities. To the contrary, one may find many situations where an entire community can be losers (for instance, with the closing of a mill that was providing jobs for half the territory) and a completely different community or territory will be winner. And it is not true to consider that the adversely impacted community is simply going to move to the luckier one and share the benefits. In fact the opposite is true: if you look at it with granular lens, trade creates territorial fragmentation which may imperil national cohesion and feed adverse political reactions.

This is why there is a need for compensation through better designed and sometimes specific social safety nets. And here again, it is surprising to see that liberal economists have deliberately overlooked this point, because this is just an application of what they call a Pareto optimum: a situation where you cannot make anyone better without hurting somebody else's situation (creating a need for compensation). This phenomenon is particularly damaging within the European Union, which has the power to liberalize through trade policy but has absolutely no competences to compensate the losers.

So is this a problem for the WTO? Of course this problem has violently backfired in the face of the WTO when its greatest founding member and leader, the United States of America, has started to bash the WTO and threatened to leave it. I am of the view that a large part of Donald Trump's trade policy constituencies are precisely coming from communities which that been victims of major social disruptions generated by trade.

Алексей Павлович Портанский

Утрата доверия среди части общественного мнения к либерализации торговли -- достаточно распространенное явление во многих странах. Но здесь скорее следует говорить о широком недовольстве среднего класса (особенно его нижнего сегмента) результатами глобализации. Его представители полагают, что плодами глобализации воспользовались в основном ТНК и богатые слои общества. Появившееся недовольство среднего класса впервые выразилось вот в чем: люди ощутили, что их уровень жизни становится ниже уровня жизни их родителей, и данная тенденция рискует продолжиться в ближайшем будущем. Результатом такого недовольства среднего класса стали, в частности, избрание Д. Трампа президентом США и брексит в Британии.