IIT Monthly Newsletter - March 2021

A message from IIT Executive Director - Professor Peter Draper 

Recently India and South Africa released a joint (restricted) paper to the WTO’s General Council in which they challenge the legality of certain “Joint Statement Initiatives” (or plurilateral agreements) being pursued by discrete groupings of WTO members. 

Since JSIs are now the favoured instrument of a range of developed and developing countries for advancing WTO commitments and updating the organization, including Australia, the leaked paper has led to much debate amongst WTO-watchers and Geneva delegates. But what are plurilaterals, and can they achieve what their promoters intend? IIT’s Naoise McDonagh sets out some contours of the debate in our first piece, and argues in their favour

It is clear that the WTO’s incoming Director General, Dr Ngozi Nkonjo-Iweala, will have her hands full. In our second piece Professor Andreas Freytag provides a thoughtful preview of the high level issues she will need to confront head on. We also canvassed some of these issues in a recent webinar we hosted. From my personal experience with her, I believe she has the capacity and force of character to shake things up. Furthermore, not being a trade wonk could be a distinct advantage, since she can ask the “naïve” questions that need to be asked, and hopefully demolish some conventional wisdoms in the process. Who knows, that may just shake some Geneva delegations out of their trenches and even lead them to grant the WTO Secretariat some rights of initiative, as Professor Freytag provocatively suggests. Wouldn’t that be something?

One of the key issues Dr Ngozi will have to deal with concerns industrial subsidies reform. Many assumptions about China, and the alleged inefficacies of WTO rules to contain Chinese state capitalism in particular, swirl around this issue. In our third piece Professors Weihuan Zhou and Mandy Zheng confront these head on, arguing that not only are WTO rules adequate but that China is more constrained than other members owing to its unique accession commitments. They also offer practical suggestions for how WTO members could nonetheless approach the issue of WTO reform, without targeting China per se.

Finally, China’s industrial subsidies feature centrally in the recently released EU trade policy, and in particular it’s notion of pursuing “Open Strategic Autonomy”. As Weinian Hu argues in our final piece, the EU is pursuing a delicate, issue-by-issue balancing act between holding to its values and pursuing its economic interests. This holds important lessons for other countries looking to engage with the increasingly assertive Chinese state, not least Australia which has recently been on the receiving end of Chinese coercive trade diplomacy.

READ MARCH NEWSLETTER