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PAC 143 – The WTO Stalled by Multilateralism The Tenth Ministerial Conference, Nairobi, December 15-19, 2015

By Valérie Le Brenne
Translation: Lea Sharkey

Passage au crible n°143

WTOSource: Flickr – World Trade Organization

The WTO’s 10th Ministerial Conference was held in Nairobi, Kenya, from December 15 to 19, 2015. On this occasion, the organisation welcomed a new member, Afghanistan, increasing the number of member States to 163. The meeting culminated in the adoption of six measures on agriculture, cotton and issues related to least-developed countries (LDCs).
Historical background
Theoretical framework

Historical background
The WTO is a relatively new arena amongst international organisations. Created in 1995, the WTO has been established by the Marrakech Agreement that closed up the Uruguay Round Negotiations (1986-1994). This new scene has replaced the GATT (General Agreement on Tariffs and Trade) born in 1948 with the mission to build a global free-trade system through progressive removal of custom barriers. After World War II, victorious powers – with the United States at the helm – agreed on the necessity to avoid any return of protectionism, as of which prevailed during the interwar period. Indeed, protectionism contributed to worsen the economic crisis of 1929 and triggered the outbreak of the conflict. But that project also originates from the will of the American hegemon to stop the vicious financial triad deficit-debt-reparations which detrimental effects had already been criticised by economist John Maynard Keynes, at the signing of the Versailles Treaty. In this regard, the specificity of the United States economic endorsement of the UK in 1942, and especially their long-term debt policy, should be underlined. If Washington considered material support to Europe as a non-refundable war effort, agreements clearly detailed economic and commercial policy settlements that were to be enforced as soon as the war would end (Graz, 1999).
After a few preparatory reunions, the United States launched the Havana Conference in November 1947. The meeting led to the adoption of the GATT agreements four months later, and planned the creation of the WTO. However, under pressure from business circles, the Senate opposed the ratification of the treaty. This blockage led to maintain the GATT, an organisation initially designed to operate only on a short period. Between 1948 and 1994, eight rounds have been held. However, the last round achieved important developments related to domains such as services, textile, intellectual property, while stressing tensions on agricultural questions.
Since its foundation, the WTO has followed an arduous path. After the marked failure of the Seattle Conference in 1999, its members opened a new round in 2001 in Doha. However, tensions between trading powers, disagreements between emerging States and a steady North-South divide stalled the talks in 2006. Moreover, as the 2008 financial crisis fostered protectionist attitudes, no significant step forward has been registered since then. Indeed, this situation advertised the WTO as a paralysed organisation. Simultaneously, this dead-end triggered critics against multilateralism as a regulation instrument.

Theoretical framework
1. The inertia of an international regime. Developed by John G. Ruggie and Stephen Krasner, the notion of regime refers to the “construction of a limited order, restricted to one domain of activity and a few governmental players” (Laroche, 2013). Based on this principle of functional separation, the WTO is a striking example of international regime. Nevertheless, as the multiplicity of interests at stake slows down – and sometimes prevents – any possible agreement, this multilateral chamber shows structural inertia without any prospects of evolution.
2. A revival of bilateral agreements. The crisis experienced by this organisation underlines the limits of this type of cooperation. This leads to a growing number of commercial partnerships being established between regional powers – the Transatlantic and Transpacific Partnerships being two of the most finalised models of these partnerships.

Discussed by Law theorists in the interwar period, the concept of international regime has been revived in the 1970’s. In 1975, John Ruggie publishes in the famous American review International Organization an article titled “International Responses to Technology, Concepts and Trends”, in which he defines international regimes as a « collective of common anticipations, rules and regulations, plans, agreements and commitments [..], accepted as such by a group of countries ». However, it is not until the 80’s – and mostly through Stephen Krasner’s work – for the International Relations theorists to transform it into a wide-ranging debate field and engage heated debates between constructivists, liberals and realists. Acknowledging the chaotic structure of the international system, all admit of the States capacity to cooperate in order to implement, in various domains, « governance without a government » (Rosenau & Czempiel, 1992). In fact, « the convergence of anticipations [would] contribute to reduce uncertainties and strengthen collective stability » (Laroche, 2013).
As it aims to implement a global economic order, the WTO appears as a typical example of international regime. As it stands, the WTO forms a case study questioning the validity of a construction elaborated by « practitioners for practitioners » (Laroche, 2013). The question of hegemonic stability must be put forward. Indeed, if the various schools of thoughts concurred on the ability of the States to cooperate on a functional basis, they disagree on the creation, consolidation and survival requirements of these international regimes. Following Robert Gilpin’s thesis (Gilpin, 1981), neorealists considered that this process would only thrive with an hegemon or at least, as Charles Kindleberger showed, if a stabilizer would exercise its leadership (Kindleberger, 1973). Considering the GATT, the role played by the United States during World War II should be underlined – and specifically their ability to enforce a liberal approach on international trade – as it forged a body of rules designed to facilitate the creation of this proto-international regime.
If we may accept the hypothesis that the presence of an hegemon fosters the development of an international regime, this approach does not withstand questions relative to its reinforcement or continuity. It should be highlighted that, if the stalling Doha negotiations makes tangible the current failure of an organisation without any common plan of action (Petiteville, 2004), the first hurdles had been experienced right from 1999 in Seattle. The meeting could not be held as numerous NGO’s came to show their ideological opposition to neoliberalism, accused of deepening inequalities and causing environmental destructions. Let’s remind that the attacks of September 11, 2001 – an event that marked, at least symbolically, the end of the United States dominance over the global arena – did not lead to postpone the Doha meetings. Not only the meetings were maintained but also the new round of negotiation immediately pointed out development as a keynote for the talks. This motto has been more than ever considered as one of the pillars of the fight against global terrorism, spear-headed by the American power. Far from being merely anecdotal, these two elements point out structural limits in international regimes, while moving beyond the debate on hegemonic stability. The complexity that lies behind maintaining and consolidating these areas of discussion is to be attributed to their permeability. In other words, as their creation may be backed by a consensus on the collective interest to cooperate, their continuity and consolidation are threatened by 1) the multiplicity of actors 2) the diversity of interests at stake 3) the permeability between spaces of negotiations 4) the pressure exerted by exogenous forces. As a consequence, the artificiality induced by this hyper specialisation and its corollary, technification, may be weakened by a confrontation with reality, in which politics and economics are deeply rooted.
Currently, all of these pitfalls – competition amongst emerging countries, antagonisms between great commercial powers such as Europe and the United States, ongoing North-South divide specifically related to agricultural questions, opposition from non-governmental players or discrepancy between commercial priorities and environmental issues (Damian & Graz, 2010) – are significant impediments to thriving negotiations within the organisation. It should be underlined that the process is being obstructed by the need to obtain, for each item of the negotiation, approval by all of the members and not only by a majority. Threatened by a triangle of decisional impossibility (Petiteville, 2013) – i.e. the impossibility « for [one hundred and sixty three States] to agree on the basis of a consensus and agenda where « nothing is agreed until everything is agreed », according to the rule of the « single undertaking » – the WTO is considered as a multilateral dead-end organisation. In fact, this signal reduces the confidence in its capacity to regulate globalisation, which reinforces, in return, inertia in this international regime.
As no significant progress is being made, WTO members mark their disloyalty. This appears through bilateral negotiations meant to formalise regional agreements designated as « mega-regional commercial agreements » (ICTSD, 2014). However, even the plethora of coalitions (Cairns, G20, G99,etc.) did not overcome any divisions. Moreover, the 2008 financial crisis bolstered protectionist reactions while attesting of the limits of neoliberal policies (Stiglitz, 2010) which weakened even more the credibility of the organisation. As such, commercial ventures are being observed on a regional basis. This is the case with the TTIP (Transatlantic Trade Investment Partnership) which plans the launch of partnership between the United States and the European Union. Launched in 2013 by Barack Obama and the Union leaders, José Manuel Barroso and Herman Van Rompuy, this project focuses on the creation of a free-trade area, based on the reduction of customs and regulation barriers between the two sides of the Atlantic. However, the text is currently sharply criticised by NGOs, fearing 1) an alignment of European norms on the United States norms that could lead to GMOs on European market. 2) The authority granted to arbitral courts, often criticised for their collusions with global firms. Another initiative of this type, the TTP (Trans-Pacific Trade Partnership) has been officially adopted in Auckland, on February 4, 2016, by twelve countries: Australia, Brunei, Canada, Chili, the United States, Japan, Malaysia, Mexico, New-Zealand, Peru and Singapore. Just like the TTIP, this agreement plans to lower the barriers to trade and investment, especially between the United States and Japan. But as the attention is drawn to these treaties, global transformations in international trade should not be set aside, as such the increasingly important emerging powers. In relation to this, the growing importance of Chinese policies should be underlined as they focus on the consolidation of new economic partnerships with various African countries (Cabestan, 2015). As such, more than 20 agreements have been signed between Beijing and Algeria in a few years, in strategic domains such as industry, agriculture, weapon industry and infrastructures (Benberrah, 2015).
In this context, restructuring the WTO appears to be essential. In fact, if this organisation operates well as an authority by monitoring the commitments taken by its members, but struggles when required to lead the liberalisation of global trade. Each pack of measures approved should not make us forget that, in order to survive, this organisation will have to face major reforms in the negotiations processes that have been in place since the GATT foundation.

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