When, almost 30 years ago, the World Trade Organization (“WTO”) was established, it was seen by the two major entities setting the agenda, namely the USA and the EU, as a key cog in the machine that was going to “level the economic playing field across the globe”. The very inclusion of the word “World” in the title signified a giant qualitative step forward from the then GATT. That huge ambition was driven by geopolitics as seen by the USA and the EU at that time. Several other countries belonging to the OECD, as well as some smaller developed economies elsewhere which accepted that world view, were happy to go along.
The “indicators” buttressing the world view included:
- the fall of the Berlin Wall;
- the 4 Modernizations of Deng Chiao Ping’s New Economic Policy for China;
- the progressive enlargement of the EU itself, an entity where commercial/trade policy was in fact the prime instrument of foreign policy;
- the NAFTA agreement linking USA, Canada and Mexico;
- the end of Apartheid in South Africa;
- the major changes to economic policy in India
This list could be lengthened – but the half dozen points above are more than sufficient to encompass the enormity of the intended scope for change. The agenda for the new WTO was inevitably focused on what the main economic agents (public as well as private) in the core places regarded as crucial for their growth. The relevance and suitability of that agenda for other parts of the world was, by and large, taken as given. Allowances could be made for countries and regions that might not be fully ready for some of the changes proposed, and then enshrined, in the WTO Agreements, but the vision was unmistakable.
The picture today could hardly be more different. And it is the USA and EU which are currently in the forefront of “adjusting their sights”. Why? This century has, to date, shattered the world view those entities then held. Gone is the idea that “peaceful development and international cooperation” would rule the roost. Gone is the notion that democratic systems underpinned by the rule of law would become the governmental norm. Gone is the belief that the Western countries themselves were running a clean and tidy ship – far too much evidence has built up to permit such complacency. The very opening of international markets which the WTO structure has done so much to encourage has, perhaps inevitably, exposed serious gaps in the web. International crime, and the trade which goes with it, has flourished. Macroeconomic policy has experienced enormous difficulty both in controlling tax evasion and in ensuring that benefits of growth are well distributed. And, as if these matters were not enough, the electronic explosion has generated so many fresh problems, as well as so many opportunities, that whole new areas seemingly requiring regulation have sprung up.
So it is that 2022 appears to be a watershed year as regards international law in general, and international trade law in particular. The institutions symbolizing such law have come under attack. Thus the ambit of the International Court of Justice in The Hague (a body never recognized, inter alia, by the USA) is disputed, especially with regard to possible new cases of genocide and war crimes which some may try to bring before it. The WTO has been criticized for everything from the failure to carry through the Doha Round to the problems relating to the Dispute Mechanisms system (even though, of course, an institution is ring fenced by what its major members want). Already back in 2018, a lengthy study written by people genuinely committed to enhancing trade was entitled “Is the WTO fit for Purpose?”. The present disturbing situation is not, then, something which has appeared as lightning out of the blue. The seeds of discontent were planted in many fields quite some time ago.
When epochal upheavals occur, reactions and behavior tend to follow a few general paths. One is to run for cover, which translates into trying to cope while waiting and hoping that much of the storm will pass without leaving too much destruction in its wake. A second is to seek a quick “end” to upheavals, aimed primarily at putting back into place many of the elements that existed previously. A third is to find different ways of cooperating with partners (old and new) within an overall framework that seeks to retain most of the guiding ideas which previously held sway. The paths are not necessarily mutually exclusive, and indeed medium to large countries may often seek to combine these approaches. So it is that in trade today, more or less “like minded” blocs are seeking to weave closer ties, even if recent behavior by some of the parties may have shaken trust.
A strong example of this phenomenon is what is currently happening with North America and the EU. With the Trump presidency, trade relations between the USA and the EU were torn apart. That rupture was reinforced by the diverging geopolitical positions taken by the USA and EU. Right now, the 2 groups are tentatively seeking to come together again, especially by focusing on cooperation in new areas of technology and trade. When it comes to the EU and Canada, however, the story is different. There the “Trumpian Tensions” never shook the partnership (and indeed the EU and Canada do have a Free Trade agreement, albeit one that was tricky to validate). The relations between these parties currently appear so good that, just a few days ago, one EU diplomat is reported to have remarked that, if only there was not so much water in between, Canada could easily become an EU member.
The “like minded” approach will certainly be translated into similarities in trade law terms, and that for at least two reasons. One is that the shared concepts of how a society should operate, politically and economically, mean that the fundamental ideas incorporated into trade law should be similar. The second reason is that the cooperating partners are very likely to have more or less equivalent levels of economic, financial and technological development. This translates into the creation and operation of legal structures, as well as specific treaty arrangements, where not too many exceptions need to be made or special regimes accepted.
The global context sketched here is the one in which Africa, and the AfCFTA, must strive to expand the continent’s trade, and above all its intra-trade. Subsequent articles will seek to delve much deeper into the external and internal circumstances which make our ambition so challenging, and into the ways law might be developed to the continent’s advantage.
Peter O’Brien, Brussels, 7 June 2022