Beyond Bali: prospects for multi- and plurilateral trade negotiations by György Csáki Szent István University, Gödöllő - HUNGARY WORLD CONGRESS OF COMPARATIVE ECONOMICS, Rome, 25-27 June, 2015 1
1. World trade tendencies and the operation of WTO world trade has increased permanently and dynamically since 1950; dynamics became especially spectacular since the very early 1990s; trade in services has been a dynamising and compensatory factor of trade dynamics since the early 1980s, the recession in 2001 caused a slight setback in world trade but the global recession of 2009 caused the most dramatic decline in global trade since 1950 2
World trade in merchandise, export, 1950 2013, million US dollar, current prices & current exchange rates (UNCTAD) 20 000 000 18 000 000 16 000 000 14 000 000 12 000 000 2009 10 000 000 8 000 000 6 000 000 4 000 000 2001 2 000 000 0 1950 1960 1970 1980 1990 2000 2010 3
World trade in services, exports, 1950 2013, million US dollars, on current prices and exchange rates (UNCTAD) 5 000 000 4 500 000 4 000 000 3 500 000 2009 3 000 000 2 500 000 2 000 000 1 500 000 2001 1 000 000 500 000 0 1980 1990 2000 2010 4
Exports and imports of goods and services, 1980-2013, million US dollar, current prices & current exchange rates (UNCTAD) 25 000 000 20 000 000 15 000 000 2009 10 000 000 2001 5 000 000 0 1980 1990 2000 2010 5
Although world trade is more liberalised than ever, more countries than ever (161) participate in global trade negotiations, since China (2001) and Russia (2012) joined WTO, all the major players participate in global trade negotiations, the two-decade history of WTO, i.e. the recent two decades of multilateral trade negotiations have not been a success story at all 6
in 1999, the Ministerial Conference, in Seattle was a ridiculous failure, although the Doha Round was launched in late 2001, the Doha Working Program was accepted in 2004 and the Doha Round was officially suspended in Summer 2006, The informal Ministerial Meeting in July 2008, in Geneva was enable to drag out multilateral/global trade negotiations from its troubles, Ministerial Declaration adopted at the 9 th Ministerial Conference, in Bali, in December 2013 Bali package - is not an indisputable achievement 7
Bali 2013: We reaffirm our commitment to the WTO as the pre-eminent global forum for trade, including negotiating and implementing trade rules, settling disputes and supporting development through the integration of developing countries into the global trading system. In this regard, we reaffirm our commitment to the Doha Development Agenda, as well as to the regular work of the WTO. (III. 1.9.) We take note of the progress that has been made towards carrying out the Doha Work Programme, including the decisions we have taken on the Bali Package during this Ministerial Conference. These decisions are an important stepping stone towards the completion of the Doha Round. We reaffirm our commitment to the development objectives set out in the Doha Declaration (III. 1.10.) 8
Bali: nice commitments in general --- Few concrete steps forward but the Bali package gave impetus to other trade negotiations --- plurilateral trade negotiations mega-regional trade deals 9
2. Plurilateral trade negotiations TPP = Trans-Pacific Partnership RCEP = Regional Comprehensive Economic Partnership TTIP = Transatlantic Trade and Investment Partnership ( mega-regional trade talks ) + TSA = Trade in Services Agreement 10
TPP 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New-Zealand, Peru, Singapore, USA and Vietnam) Trade, investment, innovations TPP s provisions remain secret TPP will do little for exports since tariffs are already low (except for agriculture!) open questions are non-tariff barriers and dumping country by country problems China & India? 11
RCEP ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Mianmar, the Philippines, Singapore, Thailand and Vietnam) + Australia, China, India, Japan, South-Korea and New- Zealand ASEAN has free trade agreement with all the above 6 countries: the real aim is a unified free trade zone of about 3 billion people, representing 27% of world trade RCEP deals with trade in goods and services 12
forecasted income gain will range between 300-600 bn USD in ten years time Prospects: towards a Free Trade Area of the Asia-Pacific (FTAAP) it is extremely hard to establish a common market among countries with such huge differences in development levels 13
TPP versus RCEP? TPP and RCEP are obviously rivals to each other although RCEP has only more modest purposes central question: US China rivalry will ASEAN s central role persist in regional economic and political cooperation? India has a special position (not involved either in TPP or TTIP) RCEP will be the key issue for both India and the ASEAN countries 14
TTIP US EU: the world s largest bilateral trade turnover (2012: together 2700 bn USD of exports & 4540 bn USD of imports) At the same time, the EU and the US are the two most active clients of the WTO DSB: several dozens of complaints against each other TTIP agenda: trade regulations, technical barriers to trade, rules on food and agricultural products, public procurement and trade, raw materials and energy, trade and sustainable development 15
Forecasted mutual gains (according to CERP): EU USA increased growth & new jobs = 120 bn /year = 90 bn /year 3 rd countries = 100 bn /year since tariffs are fairly low, about 80% of the gains would be generated through the elimination of nontariff barriers 16
at the end of the day the largest free trade agreement of ever: 800 million people, 46% of world trade, 60% of trade in services but impacts on the rest? 17
TISA (= Trade in Services Agreement) 23 WTO-members covering 70% of global trade in services Brazil, ASEAN countries, India and China are not involved so far Forecasted gains: 15,6 bn for EU and 10,4 bn for US how will TISA be related to the WTO framework? 18
3. Plurilateralism against multilateralism? Which plurilateral/megaregional negotiation will be successfully completed? Which one will be completed first? What responsibilities/mandate will WTO retain? Is multilateralism over? Will WTO be anything but a DSB? 19
if only TTIP will be completed: Will developing countries be excluded from this huge unified market? Why WTO at all? How effective can/may it be without India & China How will shared standards affect third countries? Mutual acceptance Harmonisation of standards Conformity assessment the interest of the developing countries: mutual acceptance or softer standard 20
One thing is sure: we must distinguish bilateral plurilateral/mega-regional multilateral/global trade negotiations plurilateral trade negotiations intend to solve those problems that WTO has been unable to solve in the recent two decades! the Bali Ministerial Conference saved WTO from total failure but did not contribute to preserving its central role in trade negotiations 21
WTO is prepared for multilateral negotiations and dispute settlement, but major trade issues in the early 21 st century are connected to the expansion and differentiation of global value chains as well as to electronic trade WTO must find its new role or it will be substituted by plurilateral trade agreements! 22
Thank you for your kind attention, I am looking forward for your questions and comments! 23