After maintaining a rather low profile for 23 years, China seems to be asserting its influence at the WTO’s 13th Ministerial Conference (MC13), set to commence on 26 February in Abu Dhabi, said people familiar with the development.
Upon its access to the World Trade Organization at its fourth ministerial conference in Doha, Qatar, in 2001, China initially assumed a cautious stance.
Despite its burgeoning economic power, China seemed reluctant to challenge the dominance of the trans-Atlantic giants – the United States and the European Union – in shaping the trajectory of global trade, as noted by those acquainted with China’s role.
Even at the WTO’s fifth ministerial conference in Cancun, Mexico, in 2003, China stood by the sidelines when several major issues on agriculture, particularly cotton, dominated the proceedings.
China aligned with the interests of the developing country coalitions like the G20, the G33, and other groups.
According to several people, China was first called to the “green room” meetings of the US, the EU, Brazil, India, and Australia, starting from the failed 2008 agriculture modalities meetings in Geneva.
Later, at the crucial “green room” meeting at the WTO’s 10th ministerial conference (MC10) in Nairobi, Kenya, in December 2015, only five countries – the US, the EU, India, China, and Brazil – were invited, where the Doha round was seemingly terminated by the US despite opposition from China, said people familiar with the negotiations.
EMERGENCE OF CHINA
It was during the period from 2001-2015 that China emerged as a major global power and a dominant rival to Washington.
Once the Trump administration declared a trade war, starting with the tariffs imposed on an additional $200 billion worth of Chinese imports on 10 July 2018, which are being continued by the current Biden administration, there has been a perceptible and assertive turn in the Sino-US trade relations.
In his book “Destined for War”, Harvard academic Graham Allison said somewhat presciently that the tensions will rise inexorably between a ruling military power like the US and the rising power China, which could have far-reaching consequences.
Likening the US-China tensions in all areas to the “Thucydides Trap”, a term that refers to the ancient Greek historian whose magnum opus is on the Peloponnesian War in the 5th century BC, Allison suggested that a war between the two is almost imminent.
With the Biden administration seemingly intensifying a semiconductor and green technology trade war with China over alleged subsidies and also establishing alternative supply chains where China is excluded, the rising geo-political and geo-economic tensions appear to have unsettled the multilateral trading system.
CLASH OF NARRATIVE
With the Biden administration having almost done away with the efficiency-based race-to-the-bottom globalization model and seemingly embarked on a new paradigm of worker-centric trade policies, things seem to have become pretty fluid at this juncture, said people familiar with the development.
In advancing the “re-globalization” narrative, the World Trade Organization’s Director-General Ms Ngozi Okonjo-Iweala, and China appear to be on the same page.
“From the re-globalization standpoint that we are talking about, I think that if there is any instrument to attract investments, we should try to encourage them,” Ms Okonjo-Iweala said, in support of the controversial plurilateral agreement on Investment Facilitation for Development.
There appears to be an unusual convergence in the views expressed by China at the special General Council meeting in February on how the WTO must become fit for the 21st century and the DG’s mention of “re-globalization” and why an agreement on Investment Facilitation for Development (IFD) must be concluded at MC13, said people, who asked not to be quoted.
Her pointed remarks against India and South Africa for their opposition to the IFD agreement on procedural and systemic grounds seem to have reinforced the general perception that the DG and China are working closely, said a trade envoy who asked not to be quoted.
Despite the heavy trade sanctions and the fragmentation of the global trading system, China has been consistently championing the cause of globalization to advance its trade interests.
Notwithstanding the trade tensions with the US globally, it is somewhat intriguing that China and the US are on board in the run-up to MC13, which officially commences on 26 February.
For example, while the US has stayed away from joining the IFD initiative, Washington seems ready to see the passage of the controversial IFD agreement at Abu Dhabi even in the face of opposition from India and South Africa.
TRUST, COOPERATION, COMPROMISE
In a way, 23 years after joining the WTO, China appears to have emerged as a leader with a determination to bring “meaningful” results at Abu Dhabi.
China has painted a rather upbeat picture that things can be accomplished at MC13 if countries embraced “trust, cooperation, and compromise” to arrive at “meaningful outcomes”. It underscored the need for “institutional reform”, a euphemism for addressing the new issues of the 21st century, and changing the current negotiating function of the WTO based on consensus-based decision-making, which is being vehemently opposed by India and South Africa.
It urged members to find “a proper solution to the appeal/review issue, the most important element and gateway issue in DS [dispute settlement] reform,” underscoring the need for “a fully and well-functioning DSS [dispute settlement system] as soon as possible.”
On this issue, China and the US seem to be at loggerheads. “On the draft Abu Dhabi Ministerial Declaration, I share the view that the Ministerial Declaration should be high-level, political, and forward-looking. We should strive to agree on the most important political messages, that is how to make the WTO work better at its 30th anniversary, and send the message collectively to the outside world, without bogging down in disagreement over details,” a top Chinese diplomat said. +