TWN Info Service on WTO and Trade Issues (Oct13/04)
9 October 2013
Third World Network  

Elephants on rampage on road to Bali
Published in SUNS #7669 dated 7 October 2013 

Geneva, 4 Oct (Chakravarthi Raghavan*) - As trade negotiators in Geneva, and trade ministers, senior officials and trade establishments in capitals, focus their minds on the Bali Ministerial Conference, and its so-called "deliverables", they can no longer ignore the "two elephants" on the road ahead - National Security Agency (NSA) spying and the US government ‘shutdown'.

Both of these, individually and more so together as now, indicate the fundamental breakdown of the post-war UN-charter-based international system, which provides legitimacy to the World Trade Organisation (WTO), which despite its early pretensions, is just a part that cannot exist without the overall international system (more on that below).

On 30 September, WTO Director-General Roberto Azevedo, appraised the Trade Negotiations Committee (TNC) of progress in his consultations the previous week with a limited group of countries, on the "Bali deliverables."

These ‘potential deliverables' are said to be a Trade Facilitation Agreement, some elements of agriculture (tariff-rate quotas and their administration, export competition, and ‘public procurement and stockholding' by developing countries for food security to be placed unambiguously in the ‘Green Box'), and the development/LDC issues.

In reporting to the TNC on progress in negotiations on these, Azevedo had underscored the large ground to be covered in 20 working days remaining (before Bali), the need for political engagement of capitals (senior officials and ministers), and of the substance of the letter he was addressing to all trade ministers in this regard (see SUNS #7666 dated 2 October 2013).

On 1 October, he opened the WTO Public Forum, with USTR Michael Froman delivering a keynote speech at the opening (but not staying after the speech to take questions!)

Froman brought a whiff of the current Washington atmospherics, ‘hostage taking' as a way of negotiations that his boss back home was refusing to engage in, merely presenting the US positions (and need for Bali to deliver on Trade Facilitation or the US will walk away from the WTO, and seek other bilateral and plurilateral trade accords).

True, the USTR was not at a negotiating session, though his officials at the negotiations behave no better, as trade diplomats have been privately commenting, with so-called ‘concessions' on the US part, laced with more demands.

After opening the panel, Azevedo was on travel to Indonesia for talks and to attend the Bali APEC meetings, a summit that President Barack Obama won't be attending now, and then to India for meetings there with the Minister for Commerce and Industry, the Trade and Industry groups (FICCI and CII), and the Institute of Foreign Trade.

At all these meetings, he would be exploring the scope for and seeking compromises from India.

With the US standing pat on its positions, the ‘Bali deliverables' of a Trade Facilitation (TF) accord to satisfy the US, appear now to depend on India and other developing countries giving ground by agreeing to an obligatory TF accord and yielding further ground on the "Food Security" issues, merely accepting a temporary ‘peace clause' which, as the US has so far indicated, will be a ‘political' and not ‘legal' commitment, and for no more than 3-5 years, while a permanent solution to the ‘food security' problem is sought to be negotiated.

From India, Mr. Azevedo is returning to Geneva for the General Council meeting on 9 October, before going on to Washington for the Annual Fund-Bank meeting, and the various meetings associated with these events.

Through next week, both in the run-up to those meetings, and other side-meetings for Mr. Azevedo, all focus in Washington though will be on the US "soap opera of sorts" that can become more serious: the government shutdown for lack of a budget and appropriations and the even starker deadline for the US, of the debt limit for borrowings that the US Treasury will face from 17 October.

It is against this background that the disclosures, with something or other still spilling out, about the surveillance activities of the US NSA and the British GCHQ, as well as the US government ‘shut-down' and what these imply for other nations, in terms of agreements with the US, by treaty and otherwise, is to be assessed and taken into account.

The US-NSA and British-GCHQ spying activities and their ramifications, making its way into the media based on the Edward Snowden files made available in June to the Guardian columnist Glenn Greenwald, and through him into several global media outlets, suggest at a minimum a lawless, out-of-control US surveillance apparatus.

The directors and senior officials have been caught repeatedly misleading, if not lying, to Congress and the secret Federal courts and their judges. (For earlier story on NSA, see SUNS #7624 of 11 July 2013, ‘Snowden, NSA and ever changing US Narrative'.)

Though taking oath to speak "the truth, the whole truth and nothing but the truth", they have been repeatedly caught to be acting contrary, but have not been called to account or paid any penalty for it. Given their publicly known conduct so far, it is not certain that they are telling the whole truth even to the US President and White House.

Even if other countries are not publicly feuding with the US over this, and perhaps sub rosa their own security apparatuses are secretly collaborating in this global ‘surveillance' state, and ignoring the obvious security interests of other countries, the US-NSA activities at a minimum raise several systemic issues involving basic violations of the UN Charter; "unauthorised" and blatantly illegal invasions and/or intrusions into national space; WTO agreements, in particular the TRIPS and GATS; ITU communications accords; the Universal Human Rights Declaration and conventions; and the Vienna diplomatic conventions and codes of behaviour among civilized nations, dealing a serious blow to the very basics of international law and international public law.

The Washington scene of government shutdown, apart from the domestic political and other problems for the US, also bring out in all its starkness the dysfunctional governance in the US, raise a whole gamut of similar issues, and the credibility of any negotiations and agreements with the US.

But if some of the posts at some serious web-logs are to be believed, the shutdown itself is ‘farcical' and such a ‘non-event' that even referring to it as a "partial government shutdown" would really be overstating what is actually happening.

According to one blog-post by Tyler Durden on 3 October at zerohedge, "63 percent of all federal workers are still working, and 85 percent of all government activities are still being funded during this ‘shutdown'".

Over the years, the post says, the definition of "essential personnel" has expanded so much that almost everyone is considered "essential" at this point.

(see still-running)

The real crunch though could come within a week, on or after 17 October, the date the US Treasury has advised Congress, when absent Congressional action to raise the debt limit for borrowings, government funds will run out and the US will default, plunging the US and the rest of the world into severe recession.

According to the latest media reports, the Speaker of the House of Representatives (which is refusing to adopt a clean ‘continuing resolution', without any riders attached on health care or any other, authorising temporary spending till mid-November, pending negotiations and adoption of a budget by then), has told his party-men that he would not allow a ‘default', and would raise the ceiling, if needed, with democratic votes in the House.

While the US is engaged in this ‘domestic battles and discourse', governments in the rest of the world, understanding much better the contours of the impending crisis, are refraining from any public comments.

The WTO and its trade representatives may ignore it or keep silent for the same reasons, but they should not for a moment think they are apart from the basic challenges to the international system.

Soon after Marrakesh, and the entry into force of the WTO in 1995, its leadership and trade officials, as well as the members, really believed they were apart, and declined to be part of the UN system.

The leadership and the officials identified themselves with the Bretton Woods twins, though both by then had lost their legitimacy after the 1971 repudiation by the US (under President Richard Nixon) of its obligations and the ‘dollar-gold-convertibility-at-$35-an-ounce."

The 1973 Jamaica agreement on amending the IMF charter was merely a patch-up that resolved northing.

Nevertheless, the WTO and its officials preened themselves in the Bretton Woods aura, hoping by that they would get equivalent rise in emoluments. But soon, the US and others put them wise.

The WTO, whose treaty was so drafted that there was no 'continuity', in terms of international law, with its predecessor, the General Agreement on Tariffs and Trade (GATT 1947), and had refused to be part of the UN system (as mandated on its members by the UN Charter which binds them all), has still been trying to pretend it is a continuity and part of the post-War Order, and somehow more legitimate than the United Nations.

Towards this end, in 1997, the WTO sought to claim international legitimacy and lineage from the 1947 Havana Charter and the General Agreement brought into force then, by holding a 50-year celebration of the beginnings of the GATT.

This celebratory meeting held inside the UN complex in Geneva did not invite the UN Secretary-General even for the opening ceremonies. However, at the last moment, learning that developing countries would show their displeasure in the meeting, it invited UNCTAD, a UNGA (UN General Assembly) organ and WTO observer to speak.

Speaking on behalf of the UN then, another distinguished Brazilian, then UNCTAD Secretary-General Rubens Ricupero, sharply reminded WTO members, "The United Nations is not just one among many observers: it is the major source of legitimacy in the international system, and the cornerstone of the system of international organizations."

Referring to the tumultuous demonstrations outside protesting the celebrations amidst the recession and unemployment at that time, and the barricades preventing entry manned by the Swiss military who had been called in, to protect the UN complex, Ricupero told the WTO celebrants inside: "Trade is certainly not to blame for the failure of the 20th century to solve this burning problem. But, at a time of global trade liberalization, the existence of mass unemployment, job insecurity and acute inequality undoubtedly has had something to do with the malaise -- even backlash in places -- against trade and investment liberalization that we have noted in various quarters. Such preoccupations have shown their face in such diverse fora as the US Congress' debate on 'fast track', the OECD negotiations on a plurilateral investment agreement, and the protests and demonstrations of recent days here in Geneva...

"No one should be fooled by the festive atmosphere of these celebrations... Outside there is anguish and fear, insecurity about jobs and what Thoreau described as a 'life of quiet desperation'. That is also part of the reality as much as the impressive achievements of global liberalization. It is the sacred duty of the United Nations system, the WTO and the Bretton Woods institutions, to create reasons to believe in the future and to give people back sound reasons to hope."

These words can easily be transposed to fit today's circumstances in the 21st century.

The international law and systemic violations and issues that the US ‘Surveillance State', and the dysfunctional governance in Washington, raise several issues that can be teased out. Their elaboration and analysing implications would be beyond the scope of this article.

To begin with, the UN Charter, proclaimed in 1945 in the name of "We the People of the United Nations..." makes clear that the rights and obligations under the Charter supervene any other treaty rights and obligations, both before and after the Charter.

Article 2 of the Charter proclaims the basis of the UN (and of international law), namely, the "sovereign equality" of nations. In Article 2.2, it lays out the basis of international law and obligation of all to "fulfill in good faith obligations assumed in the charter". This also means the obligation to carry out in good faith (which means the letter and spirit) of obligations of treaties voluntarily agreed to.

Though not carrying the same weight as an international treaty, this also implies carrying out in ‘good faith' obligations assumed when a state votes for and accepts a resolution of the UNGA, and Declarations of the UNGA carry the declaratory weight of the state of international law.

There are also articles and provisions of the Charter, such as ‘non-interference in internal affairs,' nations eschewing force or threat of use of force, incursions etc.

The NSA-GCHQ surveillance activities undoubtedly are a violation of the charter and its "non-interference" clause.

The NSA activities have been shown, in the Snowden files, to have involved invasion of UN territory to plant bugs in the video-conferencing facilities, in planting bugs and surveil or infiltrate and copy the computers and networks of some of the UN missions - those of Brazil, India, the EU etc - and in others diplomatic immunities attached to these envoys and their premises.

All these are gross violations of the US headquarters agreement with the UN assuring UN territory is international and beyond US jurisdiction; diplomatic immunity for UN and missions accredited to the UN and their persons and premises; and access without interference in their travels to and from the UN for plenipotentiaries, delegations and envoys and representatives to the UNGA and its bodies.

These and other similar actions reported of diplomatic missions in Washington are a violation of the UN/Vienna diplomatic conventions on: inviolability of person and premises of accredited envoys and their communications with their sovereigns. As such these are issues that each and every country could take up, if necessary before the International Court of Justice.

Then there are the ITU telecommunication treaties (on radio, telephone, telegraph, and now internet). The argument that Telecommunications Treaty does not cover the Internet is quite farcical, since telecommunications has been defined as including data transmission as well.

In so far as the US NSA has broken into business operators, private or public, to spy on their activities, including trade and investment operations, it is "theft" of private property of others (something that Snowden and other ‘whistle-blowers' are accused of), and may involve violation of the WTO's TRIPS agreement.

It is also violative of the UN Human Rights conventions and declaration. The most important of these are the ones for individual's privacy -- defining privacy as a human right and violation of privacy only under conditions that have "probable cause" and should be "proportionate", not a catch-all fishing expedition.

As for the Washington government shutdown, and the dysfunctional US system, this raises the basic question of how far can the US executive which negotiates and enters into agreement, getting them ratified by its Senate or other appropriate organs, can be depended to be able to carry out "in good faith, obligations assumed voluntarily", when the US Congress can set at nought as now (and as has happened in the past too), by refusing to adopt a budget, or allow implementation of law adopted by it.

If not reversed, and once for all functionality restored, all these are portends of a deeper anarchy, far from the assumptions of the New Order envisaged in the post-war multilateral systems underpinned by the UN Charter.

(* Chakravarthi Raghavan is the Editor Emeritus of the SUNS.)