By Kenton X. Chance
KINGSTOWN, St. Vincent, Jun 17, CMC – The Director General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, said Tuesday that the global community is facing very challenging times concerning trade and that this is probably the most disruptive period in global trade since the 1930s.
But regional countries, like Dominica and Antigua and Barbuda, have warned that unless the rules of engagement are observed, “these institutions will not work for us.
“In the first place. There is no real benefit to us because of the structure of our economies. But if we are to play a part and to ensure that there is fairness around the world, we will not achieve the desired objectives of the WTO.
Director General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala (CMC Photo)
“So I appreciate very much the leadership and the commitment of our dear Secretary General, and I believe that with her election to the post and what she’s able to do thus far, it has brought some level of confidence in us, but that has also been tempered by the reality,” Dominica’s Prime Minister Roosevelt Skerrit said.
Antigua and Barbuda’s Foreign Affairs, Immigration and Trade Minister, E.P. Chet Greene, said that while the Caribbean remains a peaceful corner of the world given the wars taking place in Ukraine, Gaza, Israel and Iran, among other regions, “our danger is… (the) slow suffocation of our economies and the attendant stagnation of our societies.
“The forces that are shaping today’s world have no patience with small island developing states and our vulnerabilities are not acknowledged, not to mention that our situation elicits no special consideration, Greene said, noting that “many of the major institutions that used to underpin the international order are no longer equal to the challenges that confront them”.
Addressing the Seventh Meeting of the Organisation of Eastern Caribbean States (OECS) Assembly, Okonjo-Iweala said the decision by the United States to impose a tariff on countries, including those in the Caribbean, could result in a contraction of global trade by about 0.2 per cent.
“And this is a huge turnaround from the 2.7 per cent growth in global merchandise trade that we had projected for this year,’ she said, telling government and opposition legislators from the sub-region that the uncertainty created by the whole situation, could result in a ‘contraction of about 1.5 per cent which is a huge dent on global trade growth”.
United States President Donald Trump has implemented the trade tariffs in a move economists and other traders say is designed to dismantle much of the architecture of the global economy and trigger broader trade wars.
Okonjo-Iweala said that the WTO has been modelling every single change, with the uncertainty between the US and China bringing about a huge amount of uncertainty again into the global trading system.
“But we are so glad they had the meeting in Geneva, the one in London and …when we add the impact of the China-US de-escalation, we have a turnaround of global merchandise trade growth to 0.3 per cent, but then if we add the 50 per cent steel and aluminium tariffs that were recently brought in, and the impact of a possible 50 per cent tariff on the European Union, we go back to a contraction of 0.5 per cent”.
The WTO Director General said that for the OECS countries, their economies are service economies, “and therefore, mainly, are not as impacted by these tariffs as they could have been.
“But services don’t escape, because anything that happens to global goods trade has some impact on services, but maybe not as much as one would expect,” she said.
Okonjo-Iweala said in her discussions with the United States representatives including Ambassador Jamieson Greer, and Howard Lutnick, the Secretary of Commerce, the reasons they gave for going unilateral, “I thought that the approach of unilateralism to solve the problem was probably not the best one to take” and that a “more cooperative approach…would have given us a better answer for all WTO members all round”.
She said article 28 of the General Agreement on Tariffs and Trade (GATT) enables a member who is no longer pleased with the situation of the tariffs to come back and say to other members, “we want to relook at this.
“But they’ve chosen to go the unilateral way. They have some valid criticisms, and we must ask ourselves, how did we get there? I think what we do about it has a lot to do with this question.
“First, WTO members should recognise that the trade of the United States is 13 per cent of world trade. So 87 per cent of world trade is among other members. And they should continue to trade among themselves on WTO terms, the most-favoured-nation tariff terms.
Dominica’s Prime Minister Roosevelt Skerrit at the meeting (CMC Photo)
“And one of the things that other WTO members can do about the situation is to come together. Come together to say we will continue to respect the system. We will continue to do our trade on most-favoured-nation terms to strengthen the system.”
She acknowledged that small island economies can be very vulnerable, and they need the stability and predictability of the system.
“So, making your voices heard on the importance of that stability and predictability is very important, and that’s one action you can take in banding with other members to make sure that your voices are heard on this issue.”
Okonjo-Iweala said the OECS countries will have an occasion to do that at the 14th ministerial meeting of the WTO in March next year, “so that we can safeguard the system”.
She said OECS countries must also ask themselves, “as uncomfortable as it may be,” whether there are any things the US says it is doing by these unilateral actions because it wanted some reforms at the WTO, and other members were not forthcoming to support those reforms.
“They’ve made criticisms of unfair trade practices, on level playing field issues, use of subsidies in ways that are not fair to others, against certain other members, like China. China itself has made criticisms of the system about those who have agricultural subsidies.”
She said developing countries such as the OECS have also been critical of the system because it hasn’t delivered as much for them.
“So all these are criticisms members have, and if these criticisms are the reasons why the US decided to take unilateral action, well maybe we should turn this very uncomfortable situation into an opportunity, this crisis into an opportunity to say, what action can we take as members to reform the organization and make it fit for purpose and fit for the 21st Century.”
She said she believes that some of these reforms need to be very deep.
“We have issues, as I said, about some of our rules that may not be fit for purpose, to make sure that members are open, transparent, and fair with each other, and declare their trade policies and practices in a way that other members can gauge and see.
“We need to look at our negotiations function to make sure that we can use all instruments at our disposal, be it the multilateral instrument or the plurilateral we need to look at our dispute settlement system that is still working, but not working as well, because the appellate body has been hubbled for some years now, and say, ‘How do we bring all these things together into a deep reform?’”.
Dominica’s Prime Minister, Roosevelt Skerrit, said While the Director General has been able to ‘carve out a special sitting for us within the WTO…the reality is that while we have moved to this multilateral system, the new world order is moving towards a unilateral system.
“We can be as articulate as we can be or should be. But the reality is that’s all we can do. We have a case that is more than 15 years old involving Antigua and Barbuda. It went through the process as enshrined in the WTO, but nothing has happened,” Skerrit said.
He said that the United Nations is also talking about reform and that while times have changed, “it has not changed at all.
“And unfortunately, the WTO has followed in that path; it was created to address some issues in the world. The objectives were noble, and there was extensive consultation. But the reality is, it is not functioning for people like us and this is why you will see, Madam Secretary General, that there is not much involvement on the part of countries like ours, and not only in the OECS, but globally, in the deliberations at the WTO, to the extent to which we should be.”
Skerrit said that if you are knocking on a door and it’s not going to be opened, “then your question is, do you continue expending your energy seeking to knock the door down.
“So, and for somebody like myself, who’s been around for some time, one can understand my constellation, because I have seen the world changed dramatically over the last 20, 25 years.
“The world is a more difficult place for countries like ours, and I believe that not to pre-empt the bills that are before us, but I believe these are the kind of things that we need to be looking at for us to see how we can keep more of the money that we have generated within our economies to remain in the union.
“But I believe that the OECS is at a juncture where more pragmatic and urgent decisions need to be taken. I think the lecturing and the bantering of words will not help us. This is a time for action on our part, and I believe that we need to look within ourselves for our survival.
“And so I believe where we and the WTO are concerned, that is to say, the OECS. I think the OECS needs to have a serious conversation. And the reality is, I mean, with all of these international organisations, I mean, is there a need for us to be members?
“I mean, the sheer cost of going to these conferences, you know, plane tickets, a hotel, and per diem and so on. I mean, what’s the resultant benefit? And so I believe that the OECS needs to have — I think has to be a collective action. It can’t be an individual action. It has to be a collective discussion and collective action on this and to determine what is our role in this,” Skerrit said.
“We have to close ranks. If we don’t close ranks, you’ll have a challenge. And so I want to say to my dear sister, whom I have the highest personal and professional respect and admiration for, and who I voted for, Dominica voted, and we will continue to support her in her efforts towards seeking to make those changes.
“I’m saying that the structure has to be reviewed, the governance model has to be reviewed. How do you implement the decisions of the WTO and ensure that everyone respects them and everyone fulfils their obligations?
Antigua and Barbuda’s Foreign Affairs, Immigration, and Trade Minister, E.P. Chet Greene (CMC Photo)
“And unless that happens, you’re going to have a challenge. We are feeling a bit marginalised, for one to a better word, and for the G7 I’ve said to them, bilaterally and otherwise, that they have a crucial role to play, because that’s where the decisions are made,” Skerrit said.
Greene told the OECS Assembly that many of the major international institutions are in a state of decline and are collapsing, and so many others are now openly marked by rogue states that grind international law and equity under the jackboots.
“The point I’m making here, Madam Speaker, is that no one is coming to our rescue, and therefore we must rescue ourselves. Rescue ourselves from the hurricane of economic conflict that is now bearing down on us.”
He said that the OECS countries are grouped with other countries as small and vulnerable economies, and some of these countries have populations in excess of 25 million.
“It almost makes a joke of our presence. The consensus that is built at the WTO often does not extend out far enough to take into consideration the peculiar situation of micro states such as ours,’ Greene said, adding, “in large measure, the WTO has become a theatre for the playing out of conflict long in the making between great powers.
“We in the Caribbean and the OECS run the risk of being collateral damage in the economic and trade war that is waging everywhere alongside the shooting, but with all of its imperfections, the WTO is still our best hope, best hope for countries of the OECS to have a stable and secure system under which to conduct international trade.”
Greene said that he would not delve into the Antigua case, in which St. John’s successfully challenged the United States at the WTO regarding cross-border online gambling.
While Antigua won the right to retaliate by suspending US intellectual property rights, the US has not fully complied with the WTO’s rulings, and the dispute remains
Green said that despite that, the Caribbean country continues to advocate for a reconstruction of the WTO, respectful of modern realities.
“Already, 75 per cent of world trade takes place under WTO rules, and we need to keep it this way. We need to modify and modernise our WTO rulebook. We do not advocate at this stage to throw it out.
“At the heart of the rule book lies the WTO dispute settlement system. Already we have heard is partially paralysed. For Antigua and Barbuda, we see that, being fully paralysed, the system cries out for reform and would render it fit for purpose in a modern world.
“We want a system that can protect the weak against the strong, that will be fair in its application of the rules, and that can reach just and equitable decisions quickly and efficiently. If the WTO reform looks like this, count us in. We will support it,” Greene said.
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