Khashoggi crisis spurs trade reflection

The particular brand of “realism” that has determined much of US foreign economic policy since the Second World War has reared its hulking head over the past few weeks.

One reminder was when President Donald Trump threatened to withdraw his country from the World Trade Organisation (WTO).

Another was the way Trump grooved his response to the disappearance and alleged murder of Saudi Arabian journalist Jamal Khashoggi.

I should explain the idea of “grooving”. Imagine the split second before an urbanite approaches an escalator and steps swiftly on to the moving stairs. The urbanite has culturally assimilated the routines of the city.

When Trump was confronted with the disappearance of Khashoggi, his response, now culturally assimilated, was that the missing journalist was not a US citizen and that Saudi Arabia was an important trade partner.

It seemed that Washington’s trade relations were more important than the human rights of a non-US citizen.

We should, probably, wait and see what happens in the coming days and weeks.

Trade agreements between states invariably have implications for the rights of consumers and workers. These agreements are often negotiated without consideration for their impact on the rights to health, education, food, work or water.

Where then, one might ask, is the WTO in all of this? It is, arguably, the most powerful among the organisations of global governance. An estimated 98% of world merchandise trade took place under WTO rules in 2017.

Does the WTO not have the power to intervene when there is a conflict between human rights and trade? One answer lies in the use and application of economic power that extends beyond the simple ability to place something on an agenda. Real power, in this respect, lies in the ability to secure outcomes long before agendas are set, and the US has made sure of this a long time ago.

Archival evidence shows that over half a century of bargaining and negotiations, the US and its allies systematically shaped the legal and institutional basis of the global trade regime that became the WTO in 1995.

Parenthetically, when the legal basis for the WTO, the General Agreement on Tariffs and Trade (GATT), was established in 1948 it was signed by 23 countries, only two of which were from Southern Africa: the self-governing autonomous British dominions of SA and Southern Rhodesia. The WTO has 164 members. Archival records show that from 1948 to 1994 the US and its allies consistently self-selected in leadership or decisionmaking positions. The evidence shows that, by various means of coercion and consent, the US and its allies achieved almost complete institutional capture of the trade regime.

As the Canadian scholar Robert Cox, who died a few weeks ago, once wrote, they have always had their hands on the levers of power and have used this power well. For instance, until very recently the US has had a disproportionate say on WTO membership. For a long time, Washington blocked Russian and Chinese membership, reportedly because of their poor human rights records.

Evidence shows that the global trade regime has always facilitated American foreign economic and diplomatic objectives and promoted “American ideology”.

Earlier in 2018, US trade representative Robert Lighthizer suggested the withdrawal of Chinese membership of the WTO, for purely ideological reasons. China, he said, did not embrace “an open, marketoriented trade regime”.

The US has always been ideological and selective in its application of power.

Separately, Thomas Zeiler, professor of US diplomacy at the University of Colorado, and Alfred Eckes, research professor at Ohio University and a former commissioner and chairperson of the US International Trade Commission, concluded that GATT was always considered to be “a rich man’s club” and “an arrow in the western world’s quiver” in the country’s ideological battles.

The idea that US foreign economic policy ought to necessarily be based on selfinterest (and not so much on human rights priorities) runs deep in the culture of Washington’s external relations.

One of the founders of the “realism” that shapes US foreign economic policy, George Kennan, who is usually heroworshipped the way Henry Kissinger is, made it clear in 1948, when he was director of policy planning at the department of state for foreign affairs. “We have 50% of the world’s wealth, but only 6.3% of its population…. Our real task in the coming period is to devise a pattern of relationships which will allow us to maintain this position of disparity…. We should cease to talk about the raising of standards, human rights and democracy. The less we are hampered by idealistic slogans, the better,” Kennan told fellow policymakers.

Ultimately, then, Trump has done what each of his predecessors has done: place trade before human rights.

TO WE RAISING TALK SHOULD ABOUT OF ... CEASE HUMAN THE

RIGHTS. THE LESS WE

ARE HAMPERED BY

IDEALISTIC SLOGANS,

THE BETTER George Kennan Former US diplomat

● executive Lagardien dean is a of former business and economic sciences at Nelson Mandela University and has worked in the office of the chief economist of the World Bank, as well as the secretariat of the National Planning Commission