Podcast Transcript — Why the WTO Is Struggling to Adapt
The Association of Foreign Press Correspondents (AFPC-USA) hosted a podcast, in partnership with the Hinrich Foundation, titled, “Why the WTO Is Struggling to Adapt.”
Our guest was Keith Rockwell, Senior Research Fellow at the Hinrich Foundation and former longtime spokesman for the World Trade Organization (WTO), about the mounting crisis facing the global trading system. Drawing on his new white paper, “In dire distress: Modest reforms won’t save the WTO,” Rockwell argues that the institution is at an existential turning point, with core principles such as “most-favoured-nation” (MFN) treatment and consensus decision-making increasingly under strain. The conversation comes as WTO members gather in Cameroon for the organization’s 14th Ministerial Conference (MC14), a meeting where expectations for major breakthroughs are low. Rockwell explains why incremental reforms may not be enough to revive a system rooted in decades-old rules and what that could mean for the future of global trade governance.
The podcast episode was hosted by Roseanne Gerin, an assistant editor at the newsletter International Trade Today, who has worked in journalism for more than 25 years.
This podcast episode was produced in partnership with the Hinrich Foundation. AFPC-USA is solely responsible for the content of this episode. The learning takeaways for this discussion can be found HERE.
Roseanne Gerin: Welcome to the Foreign Press Podcast, an educational program from the Association of Foreign Press Correspondents in the USA, in partnership with the Hinrich Foundation, an Asia-based philanthropic organization dedicated to advancing mutually beneficial and sustainable global trade. AFPC-USA is solely responsible for the content of this episode.
I'm Roseanne Gerin, an assistant editor at International Trade Today.
Today we're joined by Keith Rockwell, Senior Research Fellow at the Hinrich Foundation and former director of the World Trade Organization's (WTO) Media and External Relations Division, where he served as spokesman for more than 25 years. Keith is the author of a new white paper titled “In dire distress: Modest reforms won't save the WTO.” In it, he argues that the WTO is facing an existential moment, one in which longstanding principles like “most-favoured-nation” (MFN) treatment and consensus decision-making are being openly questioned. He writes that trying to resuscitate a system with 80-year-old roots through technical fixes and obsolete negotiating methods is a slow boat to nowhere.
And this conversation comes at a particularly important moment, as the WTO's 14th Ministerial Conference takes place this week in Cameroon, a meeting where expectations for breakthroughs are strikingly low. Keith, welcome to the program.
Keith Rockwell: Thank you, Roseanne. It's a pleasure to be back with you guys.
Roseanne Gerin: Your paper opens with a stark assessment that modest reforms can't save the WTO. What convinced you that the institution has reached such a critical point?
Keith Rockwell: Well, this has been some time in the making. It didn't just happen overnight. We've seen evidence of this dating back really quite some time. I think when we had governments begin to block the agendas of meetings from being approved — a standard clerical procedure — because they didn't like things that were on the agenda, that was a huge red flag. And that began to happen in 2013 to 2016. A lot of this happened. And that's what gave rise to the plurilateral approach, which I know we'll talk about later. But I would say this has been the case. It was in the very beginning, the WTO was seen as this all-powerful, monolithic entity that would be involved in every aspect of our lives, which was never the case, but people saw it in that light. And so that led to a lot of very negative and, I would argue, even paranoid responses to what was going on, and that made it more difficult to move the organization in a productive direction.
Roseanne Gerin: You write that WTO members have been unable even to agree on what reform means. Why has defining reform become so politically fraught?
Keith Rockwell: Trade is political. That's what it comes down to. If you look at it, for example, from the point of view of development, many developing countries think that the WTO can best help them by exempting them — these countries — from all of the WTO rules into perpetuity. And if that's the case, then it makes one wonder what the point of belonging to the WTO is. If you look at the question of consensus, for example, you can see why all the members believe that you need to preserve consensus, because you can protect your rights. But when consensus is used as a means of blocking negotiations to which you are not even participating, it becomes a distortion of what it was intended to be. So there needs to be some form of modification. They're never going to do away with consensus whole hog, but there needs to be some way of using it in a way that does not create problems of the like of which we've just been seeing.
Roseanne Gerin: The report traces the roots of today's dysfunction back to the rules drafted in 1947 under the original GATT [General Agreement on Tariffs and Trade] system, a framework built for 23 like-minded countries operating through informal club-style diplomacy and consensus by practice. Which elements of that GATT-era design from the reliance on consensus to the assumptions about state behavior are most incompatible with today's geopolitical and economic realities?
Keith Rockwell
Keith Rockwell: Well, I would argue, actually, that the more hardline and difficult issues emerged when the WTO came into being, and we saw the guardian of the multilateral system going from being a diplomatic organization to being a legally binding organization. Ironically, it was the US that pushed the hardest for this, but it changed things. It changed the very nature of the discussion. It made things much more hardline. You couldn't fudge things as easily, and it led to quite a lot of effort to try and legislate through the judiciary, as it were, by bringing cases to achieve objectives that couldn't be achieved at the negotiating table.
I think Article 21, the exception for national security, was always written in a way which was, I would say, not so easy to clearly define. And it was done that way. This ambiguity is something that has been a hallmark of WTO negotiations. By having an ambiguous outcome, both sides can claim that they got what they wanted, but this creates a situation in which, whatever happens in a national security situation, the organization itself loses. The WTO cannot be seen to be telling a superpower like the US what is in its national interests. By the same token, if the US uses this in a shambolic way and says, “Oh, I'm sorry, but paperclips are something that our national security hinges on,” then you have a situation in which you can open up a hole in the rulebook through which [one] could drive a truck. So finding the right balance there is not easy, and it was done that way deliberately. Now, if it's an organization of diplomats, trying to find a solution is a lot easier than if it's an organization of lawyers. Sorry to say that, but it's true.
Roseanne Gerin: Before we widen the lens to the geopolitical forces shaping the WTO, I want to pause on the moment we're in right now. Your paper makes clear that the lead-up to the WTO's 14th Ministerial Conference, also known as MC14, the organization's highest-level decision-making meeting, exposed just how deep the institutional paralysis runs. So let's talk about this ministerial in Cameroon and what it can realistically deliver. Based on your analysis, why have expectations for MC14 been so low?
Keith Rockwell: Well, let's separate the question of reform from other elements of the agenda. Petter Ølberg, the special envoy dealing with the whole question of reform, said back in July, we're not going to get breakthroughs in Yaoundé on reform. These issues we've just talked about — special and differential treatment for developing countries, consensus, [and] national security — these are huge political issues. They're not going to be sorted out in Yaoundé, and everyone knows this. That's not going to happen. So what can happen? Well, one thing to keep an eye on is the question of electronic commerce. There have been negotiations now including 72 members to create global rules for digital trade. That has been agreed among the 72, going back a year now. And the question is what to do with this particular text. They want to try and insert it into the WTO architecture through something called Annex IV, which is a very geeky way of describing how that would work. But in order to do that, you need consensus, and India will not agree to this. South Africa has also been blocking this. A similar situation has happened with an agreement involving 128 countries on Investment Facilitation for Development. Now, there has been some talk that members may try and put this into the rulebook in a different way, simply implement it on their own, and say to the others who oppose, "Try and stop us." Now, what the ramifications of that would be are unclear; it would be unprecedented. But that's something very interesting, such is the frustration to have countries like India and South Africa blocking these agreements from being incorporated into the rulebook, even though they would not apply to them.
So another element of e-commerce is something that's been in place since 1998, when the members agreed on a moratorium on duties on the transmission of e-commerce. E-commerce transmissions would not be hit with duties. That's been the case for almost 30 years now. And there has been a push by some countries to try and remove this. The US has leaned hard on countries like Malaysia and Indonesia in their bilateral agreements and said, "You need to avoid trying to block this. Otherwise, the bilateral agreement we have is null and void." Whether that succeeds — the US would like to see this made permanent — whether that would be agreed, I think, is a long shot. Some people have said maybe six years — that's something that could be done. And then the last thing, these plurilaterals, and the e-commerce moratorium, if those things were somehow agreed, that would be important and it would be a sign that this organization can deliver, albeit in a somewhat modest fashion.
And then the other thing is, can they come out of these discussions on reform with at least a viable pathway forward to continue work next year and beyond? If they can't agree, and they won't, on the substance, maybe they can agree on a process that would enable people to sit down and talk and hopefully in a constructive way. That would be a good outcome if they could get those three or four things.
Roseanne Gerin: Now you mentioned Petter Ølberg, the Norwegian ambassador who's been chairing the WTO reform negotiations, saying that the goal of the MC14 is not to solve every issue, but to identify where ministers can move forward decisively after MC14. Based on your previous response to the question, are there any other areas where ministers can accomplish something in Cameroon?
Keith Rockwell: Well, one thing to keep a close eye on is meetings between EU ministers — European Union ministers — and ministers from the 12-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Those 39 countries together are pretty like-minded about things like digital trade, trade and environment, [and] services trade. They've had exploratory talks. They are meeting in Yaoundé on the sidelines of this meeting. Let's see what they decide. If things go pear-shaped with the ministerial conference, expect to see groupings like this gain momentum and activity they're accelerating.
Roseanne Gerin: Of course, the challenges facing the WTO don't exist in a vacuum. The ministerial is unfolding against the backdrop of geopolitical tension and economic upheaval that you describe in stark terms. I'd like to explore how those external pressures are reshaping the system. You highlight China's state-led economic model as a major stress point for the WTO's rulebook. What specific gaps in WTO rules does China expose?
Keith Rockwell: It's a very good question. I would say the problems with China are twofold. One of them is — and I remember very clearly the day that China was made a member of the WTO. It was in Doha at the 2001 Ministerial Conference. And at that time, there wasn't a single country or delegation that thought this was a bad thing. What happened, of course, was that China's growth — in terms of economic growth, in terms of trade growth, [and] in terms of manufacturing — just exploded. And the country went to the top of the table in terms of trade and in terms of manufacturing much faster than anyone could have predicted.
Now, there's a lot about this which is positive. The Chinese have lifted hundreds of millions of people out of abject poverty. It's the greatest story of developmental policy success in history, but it also led to a huge overload in terms of production — whether it was steel, whether it was solar panels. Now, you look at electric vehicles, it's created a problem of overcapacity that is really putting pressure on everyone. Now, China's model, being what it is, and its success — coupled with this success — this is without any precedent in the WTO. It's difficult to say that this is strictly a question of government subsidies because the Chinese Communist Party is not technically the government, but it runs the country and it runs the economy. And this was highlighted by a case involving the Appellate Body, and the issue was public bodies and what are they? Are they government entities? And if so, how do you define government? And this is something that was, it's kind of a technical legal question, but it exposed the gap in terms of WTO legal coverage with respect to China. So it's something where the Chinese, for example, have insisted that people who want to sell there must invest there, they must invest X number of dollars, [and] they must hire X number of Chinese workers. And you're seeing this model now being replicated elsewhere, including in the EU as part of other industrial policy efforts.
So it's a complicated thing. To a certain extent, the Chinese are victims of their own success, but their system is not something that has been used before. It's not a system that others necessarily would like to replicate because it is pretty draconian. On the other hand, the success that they've had is really quite astonishing.
Roseanne Gerin: You also note that the United States has become an unreliable partner, with the highest US tariffs since the 1930s. How has US economic nationalism reshaped the negotiating environment?
Keith Rockwell: Well, what's very interesting to see is that there was an attempt by the Americans to try and overturn the global trading system through this system that they've put in place. The agreement they struck with the EU in Scotland — they're calling it the Turnberry Round. Well, interestingly, other countries are not following suit. They have all signed up to bilateral trade agreements with the US because the US is obviously a very important trading partner, but none of them are turning around and taking things away from other trading partners that they have. In fact, if you look closely, what you'll see is efforts to increase and deepen the number of trade contacts that they have. The EU has just concluded negotiations with Australia; they've just concluded negotiations with India; [and] they concluded negotiations with Mercosur, which would deepen and broaden their trading relations with those entities. And this is happening elsewhere, too.
And I mentioned, of course, this broad 39-country discussion involving the TPP and the EU. So rather than pulling up the drawbridge and saying, "We're going to try and decrease our trade," other countries are saying, "Let's take down barriers and make it easier to trade amongst ourselves." So I would say that with respect to the US, obviously things have changed. There's an obvious need for governments to look very closely at their supply chains, to look very closely at their trading relationships to ensure that they are sustainable and that they are rigorous. Because when you have a situation like we've had here where the ... And I mean, imagine, if you will, a situation in which you get hit with these “Liberation Day” tariffs, which might have been 40% or 50%, and then you do a trade deal and it's down to 15%. And then the Supreme Court strikes down the “Liberation Day” tariffs, which, of course, the Constitution seemed very clear [on]. I'm not a lawyer, but if you read Article 1.8, it seems pretty clear that the Congress has this responsibility. If you are a trading partner of the US and you see all of this, what are you to decide? I mean, if you're a company trying to trade with partners in the US, how can you do that? The uncertainty is really debilitating. So it's had an impact in terms of people's relations with the US. More broadly, what's interesting about this is that there's been surprisingly little change and the change that has taken place has been in the direction of greater trade openness.
Roseanne Gerin: Now, you write that many governments no longer expect the US to return to the pro-globalization posture of the Clinton-Obama years. How has this realization changed the behavior of other WTO members?
Keith Rockwell: Well, I think it's interesting to look back at the Biden administration. I think many people assumed that when Joe Biden won the election in 2020, the US would return to the same kinds of trading patterns that it had had before, but it didn't. President Biden kept in place many of the restrictions that Trump had applied in his first term. This is true with regard to China and with regard to the EU and many other trading partners. And at the WTO, the US response was benign neglect. And I'm being charitable when I say it that way. They basically pulled the legs out from under the digital trade negotiations, having been the principle demandeur for these talks from the outset, which, of course, is confusing to trading partners. And then when Trump was re-elected, I think people were bracing themselves for what they had seen the first time around. I don't think they fully anticipated what they got, and people are looking to try and find ways to move forward.
Moving forward without the United States is tricky, particularly in the WTO context. But I think what's interesting to see is that the US, it's clear, does see value in the WTO. They have pulled out of 66 other international organizations. There was a time when it seemed like they weren't going to pay their dues, but they've paid their dues. They've sent a highly qualified person here, Joseph Barloon, as ambassador, and they've sent a very, very prominent person, [Jennifer] “DJ” Nordquist, to be the Deputy Director-General of the [WTO] Secretariat here in Geneva. So they have shown commitment. People may not like what it is they have to say, but to a certain extent, they're more engaged than the Biden administration.
Roseanne Gerin: So given this landscape, it's not surprising that some of the ideas now circulating in Geneva would have been unthinkable even a decade ago. Your report lays out several proposals that would fundamentally alter how the trading system works. So let's walk through some of those. First, the “most-favoured-nation” principle — the WTO rule requiring members to extend any tariff or market access advantage they grant to one country to all others — has been a bedrock of the trading system since 1947. Why is MFN now under such intense scrutiny in both Washington and Brussels, and why do they increasingly view it as a straitjacket that enables other countries to free ride on their market-opening efforts?
Keith Rockwell: In one word, China. Now, China, when they entered the WTO, entered on terms that for a developing country, which China undoubtedly was in 2001, these average tariff rates were very low, 9% for industrial goods, 15% for agricultural goods. This compares to what India, Brazil, and others have had. It's much, much, much, much lower. And they have, in fact, in practice, brought those rates down. Having said that, it looks to the US and to the Europeans — if you've got the second-largest economy in the world, an economy that has the world's largest army, [and] is the world's greatest production powerhouse — for them to have a tariff advantage seems a little bit awkward, to say the least. So that is a major reason for this.
Keep in mind also that MFN has had holes punched in it over the decades because of bilateral trading arrangements [and] regional trading arrangements, which offer preferential trading terms to those signatories to those deals. And you also have preferential arrangements for many developing countries. So you have a system in which MFN was applied sort of sporadically. But having said that, what has been proposed by the US, particularly — and you can see this — each of these trade agreements that they've signed differs, which, by the way, if you're a US customs official, this must be just a nightmare. I mean, how do you determine rules of origin? It is already very complicated, and when a product coming in from one country is taxed at 25% and another country at 15%, well, you're going to have your work cut out for you, and it's going to slow things down. It is a system that was designed to provide transparency, stability, and predictability, none of which we have right now because of what's going on. This being said, other countries are showing a reluctance to throw this on the scrap heap because they see the advantages of this in terms of efficiency and transparency.
Roseanne Gerin: In your paper, you quote US Ambassador to the WTO, Joseph Barloon, who was formerly the general counsel at the Office of the US Trade Representative. He argues that MFN prevents countries from optimizing their trade relationships. How seriously should we take this critique, and what does it signal about Washington's broader approach to WTO reform?
Keith Rockwell: Well, this is, I would say, the most controversial element of the things that they've raised. The issues of consensus, national security, [and] special and differential treatment for developing countries — there are many other countries that share the US concerns on this. On MFN, even though the trade commissioner from the EU did sort of signal that this was something that he could support, it's not quite the same as the hard line taken by the US. Now, there are a few things to take into consideration here. One of them is that the status of all of these trade agreements — bilateral agreements that have been struck by the US with numerous trading partners — their legal status is dubious. It's the same argument that was made about the “Liberation Day” tariffs. These tariffs were set without any congressional input. There was no consultation with business. The sort of legal procedures that are supposed to be part of creating trade law were never, ever undertaken. And the result is that these agreements, they were all done by executive order, which means that when Trump leaves the White House, what is the status of these deals? And then, there are a number of ways you can approach this, but the US right now, its average tariffs in the WTO have been so low prior to the “Liberation Day.” They were 2.5%, something like that. There's not a whole heck of a lot more that the US can do in terms of cutting its tariffs. And the other countries, India's average tariff on agricultural products is 112%. That's a prohibitive tariff.
So how is the US to try and counter this? Part of it goes back to the negotiations that created the WTO, the Uruguay Round. There were, at that time, really four big trading entities that did all the negotiations: [the] EU, Japan, Canada, and the US. China did not belong. India was not a manufacturing entity. Brazil was an agricultural power. India was about textiles. It wasn't about anything else. And so the US focused largely on two things — boosting trade in services, creating a broader framework, and deepening and widening the protection of intellectual property. It succeeded on both of these fronts, and the US benefits to the tune of more than US$500 billion in terms of its trade surplus and services, and in terms of the royalties and licensing fees it collects from its patents overseas. That's because of the WTO. And if the president doesn't say this, I'll tell you someone who does: the people in Silicon Valley and in Hollywood and on Wall Street — they know how important these international frameworks really are. So that's an important consideration that gets glossed over, I think.
Roseanne Gerin: The WTO's consensus rule — the practice that no decision can be adopted if even a single member formally objects — has long been treated as a core principle of the system. But as your report notes, this approach was designed for a much smaller, more like-minded GATT membership, not today's 166-member WTO. What are the strongest arguments for replacing or modifying the consensus rule?
Keith Rockwell: Paralysis, negotiating paralysis. We've had one or two multilateral agreements since the WTO came into being — the removal of export subsidies for agriculture [and] part of the fisheries negotiations. And by the way, that agreement will disappear in three or four years if they don't conclude the negotiations. It's something that is very, very problematic because if you can't negotiate new rules and update your rulebook, then people are going to start questioning your relevancy, and that's what's happened.
So the plurilateral approach which arose from frustration at India and South Africa blocking multilateral discussions on investment, on e-commerce, on small- and medium-sized enterprises, [and] on a whole range of issues — these countries banded together in and after the 2017 Buenos Aires Ministerial Conference and said, "We're going to do this ourselves." And in many cases, it was a majority of WTO members who went forward and said, "This is something that we think needs to be done." And now the question is, how do you incorporate that back into the rules? In some cases, with respect to, for example, domestic regulation in services, a government can simply amend its own schedule, and governments cannot block that. But with respect to the investment and the e-commerce negotiations, as I mentioned, the agreements are done. They're ready to be incorporated, but because of this obstruction on the part of specifically India, but also South Africa, they cannot be incorporated into the WTO rulebook, the WTO architecture. And I think that basically is something which has to change.
Roseanne Gerin: And what would it take to make plurilaterals a viable path forward inside the WTO?
Keith Rockwell: Well, we have had them. We have had them. We have had agreements on information technology products. One in 1996 and another in 2015 that covered hundreds of billions of dollars in trade. And this was, again, amending your own schedule, which cannot really be blocked by others. But if you're talking about rules, as opposed to your tariff schedules, it becomes more problematic. So the question is — and this is going to be very interesting to watch in the next couple of days — what is it that the proponents of e-commerce and investment facilitation are going to propose as a way to get these things into the WTO rulebook? I don't know what the answer to that is, and I don't know what the response will be. The dispute settlement system has been weakened. Would India really bring a case against 128 members or 72 members? Really? Doesn't that look pretty awkward? I don't know. I don't know. I think pushing it and seeing — let's see what happens — is not a bad approach because, frankly, you've negotiated the agreements. They're there. They're ready. They're being kept out by countries that aren't even part of the discussions, and that's just not right.
Roseanne Gerin: All of this raises a bigger question. What happens if the WTO simply can't deliver the reforms members say they need? You outlined several scenarios in which the next generation of trade rules might be written outside the WTO altogether. So I want to explore those possibilities.
In your paper, you highlight the idea, as you mentioned previously, of an EU-CPTPP alignment — essentially a deeper partnership between the European Union and the 12-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership — as a potential new center of gravity for global rulemaking. What makes this proposal attractive to some governments?
Keith Rockwell: These are all successful economies. They are very interested in having an expanded rulebook for trade to cover these areas that have been not extensively explored in the WTO, because of the reasons we've just mentioned. And that includes digital trade, which is, by the way, something that has been negotiated inside the TPP and which the EU has negotiated in its agreements with these TPP countries. So it stands to reason that they would be able to negotiate something in relatively short order. And once you get these countries that are all agreed on a format, it's going to become the de facto global standard. It's awkward to not have the US part of it, but it's like California sets the standard that the rest of the US has to follow, whether people like it or not. And that's what's going to happen here. It's been happening with Brussels. Brussels has been regulating for such a long time — things including on digital trade, including on the environment, including on food safety. And the rest of the world has to accept this if they want to do business with the EU. And so that's what's going to happen. It's not something that everyone has a say in. And you can see the frustration of some in London now, since Brexit, of the notion of accepting EU rules without having a seat at the table. Well, there is a way to have a seat at the table, and it's called the WTO. But if members insist on throwing sand in the gears, well, people are going to find other ways to move forward.
Roseanne Gerin: Pascal Lamy, the former Director-General of the WTO, is skeptical of that EU-CPTPP approach, particularly because it leaves out Africa. How significant is that omission for the future of global trade governance?
Keith Rockwell: Well, Pascal makes a very good point. It's true. Africa is going to be the fastest-growing continent on earth, and it's a force to be reckoned with. To not have Africa part of this kind of discussion is problematic. I mean, you can argue, well, they're not Pacific, but neither is the UK, and they're part of it. So I suspect that if there were countries in Africa that were interested — if this thing takes on a little bit more lift, if it gets off the ground a little more and starts to become a force — if African countries were interested in participating, my guess is that the door would be open to them. Now, many of them might not be. South Africa is the most advanced and sophisticated economy in Africa, and they aren't interested at all. A very good friend of mine from South Africa, a brilliant trade lawyer, once said to me when she was asked why it is that South Africa's not at the table for these discussions, she said, "In my experience, I've often found that if you're not at the table, you're probably on the menu." So maybe there will be a change of heart, and you might see governments — Kenya, Morocco, [and] Ghana — showing interest in this. And I think that people would be very open about that idea if there were interest shown.
Roseanne Gerin: Before we wrap up, I want to bring this conversation back to our audience. Many of our listeners are foreign correspondents covering US trade policy and global economic governance. Your analysis has real implications for how they report on these issues, so I’d like to turn to that. For journalists covering US trade policy, what aspects of this WTO crisis are most often misunderstood or oversimplified in media coverage?
Keith Rockwell: I think trade in services is very often not mentioned in terms of overall international commerce. Most people in the world, certainly in the US, work in services industries. And it's harder to measure services trade, but those that do this sort of thing are becoming ever more sophisticated. And when you look at the numbers, and when you talk about things like AI-generated trade, you're going to see the numbers for services trade just going through the roof. That's happening already. And intellectual property is another element of that. Intellectual property is often seen as a lightning rod because people look at it in the context of vaccines. And the WTO agreement — the Trade-Related Intellectual Property Agreement — is a careful balance between the rights of governments and the rights of innovators. You don't want to stifle innovation, but by the same token, if it's a health crisis, you got to make sure that the drugs and vaccines people need are available. And to a very large extent, I think this has worked well. The pandemic was an example where people were really questioning this, but for a large period of time, we didn't have the vaccine. So it wasn't an argument really about patent protection; it was about what might emerge. So I think those are two things — services trade and intellectual property — where there's a lot of commerce that goes on.
And another thing that's important about the WTO, which people don't really focus on too much, is the whole issue of the WTO's regular work — the meeting of regular committees, just exchanging information about your trade policy or about new requirements, new regulations, [and] new standards. This is extremely important, and it can only take place in one forum, and that's the WTO. So while the negotiating and dispute-resolution side of things has been very, very adversely affected, other work is going on. And this brings me to another point, which I think is very important, which is the question of transparency and particularly the question of notification. Governments have the obligation to notify the WTO of changes to their trade regime. Less than 50% have done that. And in terms of subsidies last year, less than a third had done this, and that's not sustainable. Governments have the obligation to at least tell their trading partners what the heck they're doing. And it makes it very difficult to negotiate, or to resolve disputes, or to do anything if you're doing it in the dark.
Roseanne Gerin: Your report argues that the old order is not coming back. What should foreign correspondents be watching most closely in the next 12 to 24 months to understand where global trade governance is heading?
Keith Rockwell: Well, I think you should be looking at the — outside the US, the dynamic is [that] countries want to partner up, and they're doing this, and they're going to keep doing this, and it's going to be without the US. So what will be interesting to see is what happens with the midterm elections. What is the Democratic position on trade? When you see longstanding NGOs [non-governmental organizations] that have been anti-trade suddenly standing up and saying, "Whoa, tariffs, they're really bad. They're regressive. They hurt poor people more." Yes, these are arguments that have been made for decades. Now, all of a sudden, because of outrage at what President Trump is doing, people's views are changing. You had three votes — maybe it was even four votes now — in the Senate overturning the Trump tariffs against Mexico, Canada, and the “Liberation Day” tariffs. They didn't go anywhere because in the House, they just were sent to the scrap heap, but it indicates that there is this view that maybe a protectionist trade policy isn't a good idea.
I haven't heard too many candidates on the Democratic side — we don't really know who they are yet — but what are they going to say about trade? What are they going to say about these trade agreements, which, as I say, once Trump leaves, these things are like they've been scratched into the sand in Mar-a-Lago. When the tide comes in, they go away. So what will the next administration, whoever is going to be leading it, decide to do with these trade agreements? They would have a pretty strong negotiating position because they can say, "Look, this is what we have. We'd like to change it. What do you think?" They'd also be in a position to go to the WTO and say, "We need to change things. We're prepared to make some concessions ourselves." I mean, the concessions being made now are to bring tariffs that were 30% down to 15%, provided you don't put tariffs on any of our exports. I mean, congratulations [on] getting people to go along with this, but they're not legally binding, and we'll see what happens when the next crowd comes in. So that's what I would be watching. And I'm trying to think about what to write on this, but at the moment, it's very difficult to know which way the dice will be cast.
Roseanne Gerin: And what advice would you give foreign correspondents trying to explain these complex institutional shifts to audiences who may not follow trade policy closely?
Keith Rockwell: Learn the subject. Learn the subject. Read things that are difficult. Read David Ricardo, read Adam Smith, because there are a lot of things about trade that are counterintuitive. Comparative advantage means that even if I can produce plastic water bottles and pens more cheaply and more efficiently than you, it behooves me to focus on pens because there's more value added there. And then you would make more of these, even though you wouldn't make them as well as I would. That's a hard concept to get people to buy into. Even graduate students at some of the country's best business schools can't quite get their heads around it. And it means a lot because everyone is a consumer — even companies are consumers. So you want to be able to have access to the widest variety of goods and services. And you can do that if your market is open, but you're going to start to see the country has net migration right now — negative net migration. And that means that more people are leaving the country than coming into it. That hasn't happened in 50 years. What does that mean? What does that mean for a whole range of different industries, particularly with respect to trade? So I would devote time trying to come to grips with very complex topics, looking at trade law. I mean, a lot of people have had to really try and learn about trade in a very short space of time because it's there in their face every single day. But go back and look at the Constitution, look at Article 1.8, and see what you think. I mean, like I say, I'm not a lawyer, but it seems pretty clear to me. And having covered congressional trade legislation extensively over the years, I've seen how jealously previous Congresses have guarded their role on trade. And this time around, they've just abandoned it. It's really kind of amazing. So let's see what happens.
Roseanne Gerin: And finally, stepping back from the mechanics and the politics, I want to end on the bigger picture — the future of the multilateral trading system itself. Keith, as you look ahead, what are your parting thoughts on whether the WTO can still be revived and what the world stands to lose if it isn't?
Keith Rockwell: Well, the WTO is a global public good. It is a forum for [the] exchange of information and ideas. It's a forum for resolving disputes and for drafting new rules. It has not been able to carry out those functions, for reasons we've just talked about over the past hour or so. And in order to change that, they're going to have to find new ways of approaching it. I wonder if the trauma that has been visited upon the WTO and its many members and participants will have a positive side to it; i.e., in two or three years’ time, if someone comes forward with an olive branch and says, "Let's try this again.” Let's see how that might come about. Losing it would be very, very unfortunate. It was [Robert] Lighthizer, who was Trump's USTR in his first term, who said, "If the WTO didn't exist, we'd have to invent it." And even the US is saying it's not fit for purpose right now, and I think they would get a lot of agreement on that. They're not trying to destroy it. They have put forward a number of papers on reform. You may or may not agree with what they're saying, but they are proposing things that are different. So it's not just the WTO that's going through this crisis. It's all of the multilateral organizations — all of them. The WTO has been less adversely impacted. Many of the other organizations here in Geneva are laying people off. The city of Geneva, which has depended on the international community, is now seeing that community shrink, and they sort of took it for granted. But like the old Joni Mitchell song lyric, “You don't know what you've got ‘til it's gone,” people are starting to realize, “Wow, we should have thought of this a little bit differently.” And “don't waste a good crisis” is what I always say. So let's see if people can do that. And then times will change, governments will change. I don't expect there to be a whole heck of a lot of change in the remaining two and a half to three years of the Donald Trump administration. I don't expect there to be a big change. Let's see what happens after that.
Roseanne Gerin: Keith Rockwell, thank you for sharing your insights into the WTO's challenges and the bold ideas now being debated about its future. And to our audience, thanks for listening. I'm Roseanne Gerin, and this has been the Foreign Press Podcast, brought to you by the Association of Foreign Press Correspondents in the USA, in partnership with the Hinrich Foundation. AFPC-USA is solely responsible for the content of this episode.
