WTO and trade rules - some thoughts

 On the crisis of the WTO and future of world trade, some notes:

Pascal Lamy, the former DG of the WTO, has this to say in this video talk on what holds for future world trade, including the need for the big tech companies to pay adequate taxes. The Economist has an interesting piece on the contrasting style of the US and EU on how they approach big tech, anti-trust and regulation. While the US relies on existing rules and litigation, the EU is going ahead with new regulatory interfaces.

Farah Stockman has called it a mid-life crisis for the WTO comparing the WTO to a drunk in a bar waiting to be picked up, in this opinion in the the New York Times!

Jared Bernstein and Lori Wallach list out the priorities of the WTO in this undated piece. What should those new rules be? WIll there be agreement to take up the new road for new rules? Amongst their priorities is new rules for currency manipulation at the WTO.

The fact that our current crop of trade negotiators tells us that the inclusion of actionable rules against currency manipulation is impossible should be taken not at face value, but as a clear sign that the present negotiating system is broken. If the current “highway crew” is unable to build a road that facilitates this critical change, we need a new crew. The International Monetary Fund’s definition of currency manipulation, accepted by countries worldwide, provides important elements of a blueprint for this critical measure.

An interesting point on the process of trade negotiation and transparency is made by the above authors:

Rather than tinkering with the advisory system’s composition, we should eliminate it entirely. If proposed U.S. texts and draft texts from negotiations are made publicly available, the main official advantage of the committee system – access to that information – would disappear. Absent the committee structure, U.S. positions on trade deals can be formulated the way other U.S. federal regulation are: through the on-the-record public process established under the Administrative Procedure Act to formulate positions, obtain comment on draft texts throughout negotiations, and seek comment on proposed final texts. 

We must also enact strict conflict of interest rules such that those representing an industry with an interest in negotiations are barred from serving as negotiators for at least five years after leaving their companies. Likewise, public officials should be barred from representing an industry with an interest in negotiations for a similar time period after serving as a negotiator.

Trade negotiation and stakeholder engagement leaves a lot to be desired across the globe. How we structure it and what emanates as trade priorities will determine the type of trade rules we have.