Sunday, April 28, 2019

International Institutions Under Strain (Part 2 - WTO)

FDR and Churchill on Augusta
(This is part two of a three part learning blogs to honor those who gave their lives to defend things worth defending.)
I thought you would like me to tell you something of the voyage I made across the ocean to meet our great friend, the President of the United States. Exactly where we met is secret, but I don’t think I shall be indiscrete if I go as far as to say that it was ‘somewhere in the Atlantic’. 
- Winston Churchill, by Public Radio Broadcast, 24 August 1941 

In August 1941, aboard the U.S.S. Augusta in Placentia Bay, Newfoundland, a plan for international system was chartered between the United States and Great Britain—the Atlantic Charter.

The significance of this charter is its timing; it is agreed upon just before United States entered the Second World War. President Roosevelt had hoped that the Atlantic Charter would help him garner political and popular support for United States’ intervention in WWII. History would favor the story that it was the attack on Pearl Harbor in December that had pushed the United States into the world conflict against the Axis of aggression.

The Atlantic Charter outlined eight “common principles” regarding territorial stabilization, trade liberalization, freedom of the seas, freedom of governing, as well as international labor, economic, and welfare standards—as the end-goal of yet another world conflict. It is not a binding agreement. It is an aspiration (arguably following a Wilsonian-vision for the postwar world)—one that would be characterized by freer exchanges of trade, self-determination, disarmament, and collective security.

Following WWII, the United States, United Kingdom, and allied nations pursued the Atlantic Charter’s ambitions and agreed to establish rules for the postwar international economy; the result of which created the International Monetary Fund and the World Bank, as well as the signing of the General Agreement on Tariffs and Trade (GATT) at an international conference in Geneva in October 1947. The GATT agreement eventually led to the inception of the World Trade Organization (WTO) and its rule-based adjudicative process to allow State actors enforce the agreed upon terms of those great Atlantic aspirations.

What is important about the Atlantic Charter—and its eventual outgrowth in the WTO—is that it is by necessity a lesson from history: about tariffs, trade wars, and economic isolation. After the first world war, the Allies had pursued trade barriers that had led to the ruins of German economy. Churchill had adamantly argued that it is not “in interests of the world [that any] nation should be unprosperous or shut out from the means of making a decent living for itself and its people by industry and enterprise.” The then U.S. Secretary of State Cordell Hull held similar views that economic collaborations are critical to avoiding new world wars.

However, the institutions of world economic collaboration is now under strain as the current political will of the United States takes a domestic-first tariff approach confronting autocracies like North Korea, China and Iran. The Brexit debacle also marks a deterioration of the once courage aspirations of Great Britain. Furthermore, United States’ withdraw from the Trans-Pacific Partnership (TPP) has opened ways for China to build its own multi-lateral agreements and push forward its Belt-and-Road initiatives; albeit it is unclear if these Chinese-led efforts aspire to the ideological perspectives of self-determination and democracy, or are these propaganda efforts to spread China’s “soft power”—whatever that may be.

It should be noted that the Atlantic Charter was never signed. But its substantial influence and its non-binding (voluntary/aspirational) nature perhaps allowed “courageous leadership that looked beyond short-term self-interest” and sought hope in places where economic growth would be of interest for all.

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