Americans Are Preparing a Replacement for the WTO
Political analyst Timofey Bordachev on why the United States is pushing Europe to enter into a Transatlantic Partnership.
The Transatlantic Partnership that U.S. President Barack Obama recalled to the German public during his visit to Hanover is a large-scale and very ambitious project to formally unite the largest trade and economic partners in the world. Already, the European Union and the United States are each other’s most important foreign economic partners. If they succeeded at creating some sort of an economic block, they would undoubtedly have the opportunity for world domination.
In the long-term, the purpose of a Transatlantic Trade and Investment Partnership is to essentially create a common market for trade and investment between the European Union and the United States. However, for the European Union, this project is above all a serious challenge because many regulatory practices are fundamentally different in the Old and New World.
American regulation is far more liberal than the European, and being open to the United States will require that European countries, first of all, significantly limit social rights, mitigate their ecological legislation, use genetically modified products, etc.
For Europe, this will be a very complex step. And the majority of European politicians are not ready for it now. It is likely that the sides will be able to reach agreement after all on a certain framework vision for this partnership in the course of Obama’s presidential term, but these will merely be the most preliminary and general statements.
On the other hand, it can be asserted that the next American president will continue working towards this end, since the Transatlantic Partnership, just as the Trans-Pacific Partnership that is already being actively implemented by the United States, is effectively part of a long-term strategy to displace the World Trade Organization.
The previous framework was very simple. There was the WTO, which was created by Western countries. But when the standoff between the two systems was over, the WTO became a universal organization which almost all countries joined, including China, Russia and India. The WTO became too democratic, undermining the United States’ ability to control the global economy through it.
Having determined that, in modern conditions, the WTO may no longer be a sufficiently effective instrument, Americans are trying to establish parallel institutions.
At present, the United States is essentially playing to win and creating new formats that will displace the WTO, supplant it and establish new rules. These formats should further help the Americans fulfill their role of leading the world and earn money from it.
Those who remain in the WTO, but do not join the Transatlantic or Trans-Pacific Partnership, will have to make a choice. Either go into the opposition and create their own institutions, triggering accusations that they’re destroying the WTO, or bow down to our American partners and join organizations created without their participation.
Above all, this applies to China. China is the main target in this project because it was Beijing leadership specifically that, after entering the WTO and, in recent years, within the framework of G-20, began to increasingly demand that its interests and economic power be taken into consideration during the decision-making process. The secondary target is Russia. Thereafter, India.
But we can neutralize the attack and not give the competitors a chance to outmaneuver us. To accomplish this, our countries need to start negotiating with each other. They need to create genuinely integrated formats and formats for enhanced international partnership in Eurasia, seriously develop the economic component of the Shanghai Partnership Organization and work towards merging the European integration project with the new Silk Road.
The choice is simple: either begin to act or wait for some time and then bow down to the Americans.
The author is the director of the Centre for Interdisciplinary European and International Studies of the department of World Economy and International Affairs at the National Research University Higher School of Economics.