New Asian-led venture to revive the WTO

The foremost network of business groups from the Asia Pacific has commissioned renowned macroeconomist Dr Andrew Stoeckel to author a study on resurrecting the world trading system.

The Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI),  a network of national chambers from 27 economies across Asia and the Western Pacific, will deliver an evidence-based argument and plan for reforming the World Trade Organisation (WTO) as well as the relationships with the major global intergovernmental institutions,  following the completion of the study mid this year.

As a founding member of CACCI, The Australian Chamber of Commerce & Industry (ACCI) will be managing the project with Dr Stoeckel on behalf of the network.

The WTO (together with its predecessor GATT) has been in situ since the end of the Second World War, regulating trade, global relations and resolving disputes on the movement of goods and services.

However, the current global market environment has made trade liberalisation less of a priority among many countries, threatening the sustainability of the WTO.

The newly commissioned research is a flagship project for CACCI and will provide insight for the entire global trading community. The results will be released in mid-2021 in time for consideration by the next WTO Ministerial Council.

Quotes attributable to CACCI’s regional business leaders: 

CACCI President Samir Modi (India) said:  “It is an opportune time to examine how the world trading system has deteriorated to its current state, and what can be done to remedy the situation.

“Many countries are more concerned with national security and economic self-interests, leading to a rise in nationalism and protectionism regionally and globally. And, given the growing trend to pursue bilateral economic relationships among many countries, the prevailing circumstances are expected to have further adverse impact on multilateral relationships.

“CACCI, with its initiative to conduct the study ‘Resurrecting the World Trading System’, hopes to focus efforts to the right questions and processes to achieve this important objective.”

CACCI Advisory Board Chair and CACCI President Emeritus Ken Court (Australia) said in a time of rapid communications and decision-making, the resolution of international trade disputes needed to be simplified.

“Most CACCI member nations are medium or small players with much at stake in a global multilateral system – they depend on stable and predictable rules governing international trade and investment.

“A clear mechanism enabling prompt decision-making will not only assist business but also lead to more open dialogue between nations,” Mr Court said.

CACCI Policy Advocacy Working Group Chair and Australian Chamber of Commerce & Industry Trade Diretor Bryan Clark (Australia) said the WTO’s importance “had been forgotten amidst the pursuit of free trade agreements.

“One of key reasons for establishing the global rules-based trading system was to avoid a repeat of the destructive trade tensions experienced before World War II.

“But rising protectionism, the proliferation of FTAs, trade sanctions and the failure of the dispute settlement body, coupled with rising uncertainty with lower investment spells great trouble for the world.

“We desperately need this study to address current shortcomings in the system and recommend a path back for the WTO, which is why securing an economist of Dr Stoeckel’s expertise is a boon for the confederation.”

CACCI Advisory Board member Jemal Inaishvili (Georgia) said the promotion of free trade in the region had faced “a lot of challenges in the past”.

“We have seen tensions in trade relations between world and regional leaders, which were not helpful for economic growth.

“Last year we witnessed enormous disruptions caused by the COVID pandemic, and the difficult situation will certainly continue in 2021. We all are hopeful that by the end of the summer the situation will start to gradually improve.

“All this makes the development of international trading system based on promotion of free trade even more relevant and the above-mentioned study will only contribute to achieving our goals.

CACCI Vice President Peter McMullin (Australia) said the CACCI trade study is a “vital piece of leadership at this critical stage in our collective history”.

“The world trading system is in disarray and needs a reset. The study will diagnose the problem and suggest possible and practical solutions. The CACCI Steering Committee will provide the necessary oversight of the study and ensure that it remains focussed on the task at hand.

“Doing nothing is not an option for any of our valued members. We owe it to the rich and productive history of CACCI to embrace this study.

“As trade is foundational to the economic recovery, I think it is in all our interests to seek to advocate that recommendations from the study are adopted by the broader business community and its many organisations.

CACCI Vice President M. Rifat Hisarciklioglu (Turkey) said greater cooperation at the WTO “can defuse trade tensions and provide greater certainty for international trade.”

“Trade is the engine of economic growth and catalyser of peace, prosperity and security. The world economy needs less unilateralism and more multilateralism.

CACCI Vice President Pedram Soltani (Iran) said protectionism “had never been so threatening” to globalisation since the inception of the WTO.

“Asia, the driving force of the global trade growth in the 21st century, has to be more sensitive to such threats. CACCI, as a continent-wide organisation for the private sector, has correctly and timely felt the exigence of paying attention to the headwinds of the World Trading System,” Dr Soltani said.

“The future of the world trade should be more protected by those players who have a higher stake in shaping it.”

CACCI Vice President Sheikh Fazle Fahim (Bangladesh) said developing economies needed sustainable, equitable rules to achieve development goals and grow new industries with ease of market access.

“Developing economies find it difficult to expand their own emerging industries, as multinational companies have competitive advantage in the current global business environment. So, it is imperative promising economies are able to establish and maintain interconnectivity and collaboration among potential trade partners.

“Therefore, the need for a study that explores all these new challenges, gaps, and inconsistencies and finds an inclusive solution for world trade to become an effective system again that leaves no one behind, is paramount.”