Trade versus traffic
Donald Trump might have had Jersualem on his radar far more than Buenos Aires in recent days but the New England economist Dr Hale is not inclined to ignore the World Trade Organisation (WTO) summit so easily. He writes:
“I’m looking for ways to give the WTO summit a good press or indeed any press at all, can you help here? For a start my own government does not help, sending its obscure Trade Representative Robert Lightizer to rubbish the WTO for giving China an easy ride by masquerading as a developing nation. I feel ashamed of my country’s neo-protectionismafteritsSmoot-Hawley tariffs of 1930 helped to destroy twothirds of world trade in just three years, leading to the even greater havoc of World War II followed by the genesis of the WTO with the General Agreement on Tariffs and Trade in 1947. Nor did your end help. Immediately beforehand Argentina had its own particular way of marking the Pearl Harbor anniversary with this judicial bid to send the previous president to jail over her extremely silly treaty with Iran which even Tehran’s parliament could not be bothered to ratify. And then President Mauricio Macri painted himself into a corner by pinning the summit’s success to being the venue where the European Union-Mercosur agreement was concluded, an impossibly long shot. I could go on but over to you.” My reply: “I agree with you over the need for more serious press for a global conclave which all too many people are going to remember as a traffic nightmare – as Oscar Wilde said, if there’s one thing worse than being talked about, it’s not being talked about. Perhaps the Macri government was being over-anxious in barring those 64 international activists – half of them were not only harmless but even necessary to express the case against globalisation, which needs to be more inclusive, while the other half might have livened things up a bit (without going as far as the battle of Seattle in 1999). I could add to your list of competing local distractions – the so-called pension reform (although in fact Argentina’s nine million pensioners account for just over half the 17 million benefits subjected to this updating mechanism) and the second anniversary of Macri’s inauguration last Sunday. As for the Iran treaty, this is not our subject today but if you want to follow it up, I’ll give you two key names – abroad, the late Venezuelan president Hugo Chávez and at home, Senator Miguel Angel Pichetto.
“As for Macri’s dreams of signing the EUMercosur agreement here, he was overrating his own country’s importance – in European eyes, Mercosur is synonymous with Brazil (almost 80 percent of the bloc’s population excluding suspended Venezuela) and if there was any prospect of signing it this month, it was always going to happen during the Mercosur summit starting next Thursday in Brazil, in any case a more suitable venue for this bi-regional agreement than the global WTO event. At no point has Brazil lined up behind Macri’s fast track. French Ambassador Pierre-Henri Guignard tried to warn the government against this premature move beforehand in pointing out that any agreement would need to satisfy not only the negotiators but also Europe’s parliaments ratifying the deal. France is traditionally an EU hardliner over farming but the Ireland supplying Brussels with its Agriculture and Rural Development Commissioner Phil Hogan does not lag far behind – Irish Foods has been one of the success stories of post-bubble Eire. In any case there were too many loose ends – almost 10 percent of goods and services still unresolved, patent issues (especially for laboratories), purveyance and the socalled geographic indications (champagne, Parmesan cheese, etc., 100 or so in all) among others – which will need at least a year to tie up, despite the ‘historic advances’ announced on Wednesday. “With hindsight, could the 11th WTO Ministerial Conference (the first in South America) have sought a more realistic claim to fame? Argentina punches below its weight in world trade – only 0.3 percent of the planet’s exports with imports rising faster while accounting for 0.8 percent of global output (trade volume is around 23 percent of gross domestic product, as against almost 60 percent in the world at large). If the previous WTO summit in Nairobi (2015) could offer the world’s biggest unexplored potential in Africa while Bali (2013) lay close to the heart of international trade with all the promise of a pre-Trump Trans-Pacific Partnership (TPP), what might have been Argentina’s sellingpoints in a summit virtually shunned by Washington and swimming against a protectionist tide? Hard to say but Argentina’s extensive South Atlantic seaboard made fisheries an interesting niche while software might have been another (Enabling Ecommerce) – Alibaba’s Jack Ma (an anti-regulatory voice from a Communist country boasting about selling billions of dollars daily online) was certainly conspicuous among overseas participants. Macri could also have revived his earlier enthusiasm for the Pacific Alliance as a Plan B. Not to mention working on a broader multilateral agenda for a changing world, especially when chaired by a woman who only last year had been aspiring to head the planet or at least the United Nations, former foreign minister Susana Malcorra. “One surprising aspect of the summit was the limited interestshownbytheprivatesector.Somebusinessmen might have assumed that this ministerial huddle was primarily intergovernmental – the preponderance of the domestic market here and a business tradition more geared to state contacts than entrepreneurial skills both conspire against an interest in international trade. Yet the illusion of an imminent EUMercosur agreement might have been putting the wrong foot forward, viewed as Macri upping the pressure on business to become competitive – even if Mercosur’s extreme protection of its industry is to be phased out over 10-15 years under the agreement (more gradualism). Yettoconcludeonapositivenote,neither this conference nor the WTO should be judged a failure just because Macri raised the bar too high with the EU agreement or even because of a general failure to put amultipolarworldononepage.TheWTO might not cover the entire planet with 164 countries out of a total 200-odd, and nor are all these members fully on board, but there is definite progress when measured against the original GATT objectives in 1947, even since the WTO’s creation in 1995 – its secretary-general Roberto Azevedo calculates that only five percent of world trade suffered restrictions in the wake of the challenge posed to globalisation by the 2008-9 financial meltdown as against two-thirds in the Great Depression. Just passing on the torch can be an achievement.”
With hindsight, could the 11th WTO Ministerial Conference (the first in South America) have sought a more realistic claim to fame? What might have been Argentina’s selling-points in a summit virtually shunned by Washington and swimming against a protectionist tide?