Elephants on rampage on the way to Bali

Even as trade diplomats are seeking to remove barriers to a successful outcome for the WTO’s upcoming Ministerial Conference in Bali, the NSA spying scandal and the government shutdown in the US pose potentially a broader threat to the very international system of which the WTO is a part.

by Chakravarthi Raghavan

GENEVA: As trade negotiators in Geneva, and trade ministers, senior officials and trade establishments in capitals focus their minds on this December’s 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 postwar UN-Charter-based international system, which provides legitimacy to the World Trade Organization which, despite its early pretensions, is just a part that cannot exist without the overall international system (more on this 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 an agreement on trade facilitation, some elements of agriculture (tariff-rate quotas and their administration, export competition and “public stockholding” for food security) and the development/least developed country (LDC) issues.

In reporting to the TNC on progress in the negotiations on these, Azevedo underscored the large amount of ground to be covered in the then 20 working days remaining (before Bali), the need for political engagement of capitals (senior officials and ministers) and the substance of the letter he was addressing to all trade ministers in this regard (see TWE No. 554).

On 1 October, he opened the WTO Public Forum, with US Trade Representative (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 negotiation that his boss back home was refusing to engage in – merely presenting the US positions (and the need for Bali to deliver on trade facilitation, failing which the US could walk away from the WTO and seek 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 being laced with more demands.

After opening the Public Forum, Azevedo was to travel to Indonesia for talks and to attend the Asia-Pacific Economic Cooperation (APEC) summit, and then to India for meetings with the Minister of Commerce and Industry, trade and industry groups, 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” appear now to depend on India and other developing countries giving ground by agreeing to an obligatory trade facilitation accord to satisfy the US and yielding further ground on the food security issue – 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, Azevedo would return to Geneva for the WTO General Council meeting on 9 October, before going on to Washington for the IMF-World Bank annual meetings. In the run-up to those meetings, however, all focus in Washington would be on the “soap opera of sorts” that can become more serious: the US 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.

Surveillance and shutdown

It is against this background that the disclosures about the surveillance activities of the US NSA and the British GCHQ (Government Communications Headquarters) as well as the US government shutdown and what these imply for other nations in terms of agreements with the US, are to be assessed.

The NSA and GCHQ spying activities and their ramifications – which have made their 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. (For an earlier story on the NSA, see Chakravarthi Raghavan, “Snowden, NSA and ever-changing US narrative”, South-North Development Monitor (SUNS), No. 7624, 11 July 2013.)

The directors and senior officials have been caught repeatedly misleading, if not lying to, the US Congress and the secret federal courts and their judges. Though under oath to speak “the truth, the whole truth and nothing but the truth”, they have been repeatedly caught acting otherwise, 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.

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 NSA activities at a minimum raise several systemic issues involving basic violations of the UN Charter; unauthorized and blatantly illegal invasions and/or intrusions into national space; WTO agreements, in particular those on intellectual property rights and trade in services; International Telecommunication Union (ITU) accords; the Universal Declaration of Human Rights; and the Vienna diplomatic conventions and codes of behaviour among civilized nations. All this deals a serious blow to the very basics of international law and international public law.

Meanwhile the Washington scene of government shutdown, apart from the domestic political and other problems for the US, also throws into stark relief the dysfunctional governance in the US, bringing up a whole gamut of similar issues and raising questions over the credibility of any negotiations and agreements with the US.

But if some of the posts on some serious weblogs 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 post by Tyler Durden on 3 October on the Zero Hedge website, “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 http://www.zerohedge.com/news/2013-10-03/government-shutdown-36-facts-which-prove-almost-everything-still-running)

The real crunch though could come 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, potentially plunging the US and the rest of the world into severe recession.

The WTO standing apart?

While the US is engaged in these “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 stood apart from basic challenges to the international system.

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

The leadership and the officials identified themselves with the Bretton Woods twins, viz. the International Monetary Fund (IMF) and the World Bank, though both had by then 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 nothing.)

Nevertheless, the WTO and its officials preened themselves in the Bretton Woods aura, hoping by that they would get an 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 which 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 postwar order, and somehow more legitimate than the United Nations.

Towards this end, in 1998, 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 50th anniversary celebration of the beginnings of the GATT.

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

Speaking on behalf of the UN then, then UNCTAD Secretary-General Rubens Ricupero, another distinguished Brazilian, 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.

Violations of international law

The US “surveillance state” raises several issues regarding international law and systemic violations that can be teased out. Their elaboration and analysis of their implications would be beyond the scope of this article.

To begin with, the UN Charter, proclaimed in 1945 in the name of “We the peoples 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 the obligations assumed … in accordance with the present Charter”. This also means the obligation to carry out in good faith (which means in letter and spirit) the 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 UN General Assembly, and declarations of the General Assembly carry the declaratory weight of the state of international law.

There are also articles and provisions of the Charter on areas 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 and infiltrate the computers and networks of some of the UN missions, including those of Brazil, India and the EU.

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 the 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 UN General Assembly and its bodies.

Such actions 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 before the International Court of Justice.

Then there is the ITU telecommunication treaty. The argument that the treaty does not cover the Internet is quite farcical, since telecommunication has been defined as including data transmission as well.

In so far as the NSA has broken into the networks of 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 whistleblowers are accused of), and may involve violation of the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

It is also violative of the UN human rights conventions and declaration. The provisions on an individual’s privacy define privacy as a human right and envisage violation of privacy only under conditions of “probable cause” and as “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 the US executive – which negotiates and enters into agreements, getting them ratified by the Senate or other appropriate organs – can be depended upon 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 to allow implementation of a law adopted by it.

If not reversed, and once-for-all functionality restored, all these are portents of a deeper anarchy, far from the assumptions of the New Order envisaged in the postwar multilateral systems underpinned by the UN Charter. (SUNS7669)   

Third World Economics, Issue No. 555, 16-31 Oct 2013, pp2-4, 16