Exceptional breakthroughs at the WTO Bali conference
- By Yang Panpan & Wang Yaqi
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E-mail China.org.cn, January 10, 2014
To achieve this goal, the United States is following a two-pronged strategy. On the one hand, it is actively leading trade negotiations including the TPP, TTIP and PSA, displaying openness in its rule-making process to encourage more countries to participate. On the other hand, it is actively looking to establish a comprehensive platform to promote the new U.S.-dominated global trade and investment rules. The WTO is a good choice, as it represents more than 160 member countries. The Doha Round deadlock has made the United States realize the difficulty in establishing a global trade and investment template without enough allies to support it.
Based on efforts in previous years, the U.S. has won enough allies to support its rules. The TPP, TTIP and PSA are all mega-regional agreements. The TPP has 12 member countries, making up about 40 percent of global GDP. The TTIP covers 28 EU countries and the U.S, which account for about 50 percent of global GDP. The PSA has 49 countries participating in its negotiations, accounting for more than 80 percent of global GDP. Based on these three platforms, the United States has revived the WTO, to help to establish its global trade and investment framework.
A frustrating fact in the burgeoning new trade rule negotiations is that most emerging economies are not able to get a piece of the big pie. For now, most of the developing countries in G20 are excluded from the TPP and TTIP. As for the emerging economies, only China, Mexico and Turkey are included in the PSA negotiations. The TPP is sparking concern that ASEAN might disintegrate due to its complicated relationship with the RCEP (Regional Comprehensive Economic Partnership). Developing countries are battling with new trade rule negotiations and internal divisions, and are rethinking their strategies, as trade and investment rules evolve. As the beneficiaries of the WTO rules, developing countries are willing to get back on track.
Although they have different starting points, both developed countries and developing countries have decided to return to the WTO platform, as the new U.S.-dominated global trade and investment rules have started to appear. The Bali Trade Agreement may be regarded as the consensus between the two parties. However, developed countries and developing countries are still strange bed-fellows. A new era for the global trade system is coming into place. This system is a hybrid one, with both a low-standard trade framework represented by the WTO and a high-standard trade framework dominated by the United States.
China can benefit from this hybrid system by adopting different strategies. China has long been a beneficiary of global trade under the WTO rules. China should therefore prevent the WTO from being marginalized. China now is actively participating in the formation of the high level agreement of the U.S.-dominated rules. It should fully participate in important trade negotiations to increase its voice. This will also help to boost domestic reform.
Yang Panpan is an assistant research fellow at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences. Wang Yaqi is a PhD candidate at Peking University.
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