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As does its federal counterpart, Mil. R. Evid. 201 authorizes judicial notice of "adjudicative facts" which are defined as "simply the facts of the particular case." See Drafters' [**9] Analysis at A22-4. Domestic law can constitute an adjudicative fact and be eligible for judicial notice if it is a "fact that is of consequence to the determination" of the case.3

[BEGIN FOOTNOTE 3] "Domestic law" includes treaties of the United States; executive agreements between the United States and any State, foreign country or international organization; the laws and regulations of the United States (which includes regulations of the armed forces) or of a State; international law; and the common law. See Drafters' Analysis, Drafter's Analysis, Manual for Courts-Martial, United States, A22-5 (2008 ed.) (hereinafter "Drafters' Analysis"). See United States v. Ayers, 54 M.J. 85, 90 (C.A.A.F. 2000) (a general regulation is a proper subject of judicial notice in a case charging a member with a violation of such a regulation). United States v. Commander, 39 M.J. 972, 977 (A.F.C.M.R. 1994) (panel instructed the military judge had taken judicial notice that anabolic steroids are a Schedule III controlled substance under the Controlled Substances Act of 1970). [END FOOTNOTE 3]

There is, of course, no bar to the Supreme Court adopting a Court of Appeal's reasoning as its own. Yet there is legitimate reason to question whether that was what the Supreme Court intended in 1983. First, as just shown, only the least authoritative of the three sources cited **385 actually supports the word “must,” while the two Supreme Court decisions employ “should.” Second, barely a month later, the Supreme Court—speaking though the same justice—filed another decision which used the “should” formulation from the 1955 Allen decision as quoted in Abbott.20 Third, the 1983 Allen decision involved retirees (and Flournoy the widow of a retiree), who historically receive a heightened degree of judicial protection. (See fn. 19, ante.) Fourth, and most significantly, the “must” formulation has never been reiterated by the Supreme Court, which has instead uniformly employed the “should” *699 language from the 1955 Allen decision. (Olson v. Cory, supra, 27 Cal.3d 532, 541, 178 Cal.Rptr. 568, 636 P.2d 532 [“Although an employee does not obtain any ‘absolute right to fixed or specific benefits ... there [are] strict limitation[s] on the conditions which may modify the pension system in effect during employment.’ [Citation.] Such modifications must be reasonable and any ‘ “changes in a pension plan which result in disadvantage to employees should be accompanied by comparable new advantages” ’ ”]; Legislature v. Eu (1991) 54 Cal.3d 492, 529–530, 286 Cal.Rptr. 283, 816 P.2d 1309 [quoting Olson]; City of Huntington Beach v. Board of Administration (1992) 4 Cal.4th 462, 472, 14 Cal.Rptr.2d 514, 841 P.2d 1034 [“changes in a pension plan which result in disadvantage to employees should be accompanied by comparable new advantages,” citing Allen v. City of Long Beach, supra, 45 Cal.2d 128, 131, 287 P.2d 765].)

It thus appears unlikely that the Supreme Court's use of “must” in the 1983 Allen decision was intended to herald a fundamental doctrinal shift. “Should,” not “must,” remains the court's preferred expression. And “should” does not convey imperative obligation, no more compulsion than “ought.” (Lashley v. Koerber (1945) 26 Cal.2d 83, 90, 156 P.2d 441; see People v. Webb (1986) 186 Cal.App.3d 401, 409, fn. 2, 230 Cal.Rptr. 755 [“the word ‘should’ is advisory only and not mandatory”].) In plain effect, “should” is “a recommendation, not ... a mandate.” (Cuevas v. Superior Court (1976) 58 Cal.App.3d 406, 409, 130 Cal.Rptr. 238.)

Resolve: “To form a purpose; to make a decision; especially, to determine after reflection; as, to resolve on a better course of life.”

The issues presented in this chapter should be seen as providing a framework for analysing some of the key trade related policies that can maximize the potential contribution of trade to ending poverty. Integrating markets can transform countries’ economies, lifting growth, driving productivity gains, and boosting incomes. These changes were instrumental in the poverty reduction of the last two decades. Keeping markets open and further lowering trade costs, along with policies to address the key constraints the poor face in each country in profiting from the opportunities created by trade, will be essential for ending poverty. Potential gains from reducing trade distortions and trade costs are great. For example, the agricultural sector will continue to play a critical role in lifting people out of poverty, but tariffs in destination markets and distortive subsidies continue to be high, and exporters continue to pay the high costs of poor trade facilitation. A successful conclusion of the Doha Round, regional trade cooperation, and unilateral reforms, as well as the implementation of policies that can effectively reduce trade costs, such as an improved business environment, improved trade facilitation and trade-related infrastructure, are key to creating new economic opportunities. In the countries where the poorest are concentrated, implementation of the reforms set out in this chapter could deepen integration with the global trading system and contribute to stronger connectivity of the extreme poor to international markets, while managing the risks the poor face. The World Bank Group and the WTO cooperate with each other, as well as other multilateral institutions, to promote trade as a means of poverty reduction. The Bank Group is a central partner in the Aid for Trade Initiative. Other key examples of cooperation include the Bank Group’s support for negotiation and implementation of the WTO Trade Facilitation Agreement; both institutions’ roles in the Enhanced Integrated Framework; and their advocacy to ensure that the Basel Committee on Banking Supervision’s new financial sector regulations following the global financial crisis did not impose unintended, negative consequences on the availability of trade finance.204. n implementing the framework for policy analysis and action outlined in this chapter, policymakers should recognise that many poor people in different economic sectors face common challenges. For example, the challenges and constraints presented by the employment of most poor people in the informal economy apply across the services, agriculture and manufacturing sectors. Policy responses that apply across sectors are likely to have more impact than narrower ones. Institutional frameworks or economy-wide constraints — for example those that prevent women from achieving full economic participation — need to be addressed if policies targeted at particular sectors are to achieve their intended goals. At the same time, analyses of the drivers of competitiveness in specific sectors and value chains of importance to the poor remain relevant. Realising the potential created by international production sharing for poverty reduction requires an understanding of linkages between sectors and policy dimensions. By allowing countries to participate more easily in segments of a particular value chain, GVCs offer the possibility of a more fragmented and eclectic development pathway — with opportunities being created for the poor in more ways — than a traditional model based on “progressing” from one sector to another (see Box 1.5). In the same way that GVCs require policymakers to better understand the linkages between trade, investment, skills, infrastructure, and other policies, the linkages between sectors are important in determining GVC participation. The capacity to access quality and affordable services (e.g., logistics) can be a key determinant of GVC-driven investment choices. By understanding the potential for GVC participation and upgrading, policymakers can focus on the different points where benefits for the poor can be increased and address specific barriers that may limit participation of the poor at particular stages of a value chain. A fundamental message that emerges is that in order to have the greatest impact toward ending poverty, trade policy must be made and implemented in conjunction with other areas of policy. The framework set out in this chapter points to clear relationships between poverty dimensions. Addressing the challenges facing small traders, for example, will benefit many women among the extreme poor, and mitigating the trade-related risks facing fragile and conflict states is likely to help the many rural poor in these countries. At a broader level, while economic integration can be pursued in ways that helps maximize the gains and minimize the risks generated through poverty, trade outcomes for the extreme poor are also shaped by the nature of poverty. So, for example, while trade-related policy improvements can play an important role in limiting conflict in fragile states, the ultimate impact on poverty reduction will be limited unless the root causes of conflict are addressed. Or, in countries where deep gender bias persists, there will be limits to the extent to which the benefits of trade can reach the extreme poor, even if trade can help create economic opportunities for women. This underlines the need flagged at the opening of this chapter for more integrated approaches to tackling extreme poverty, based on an understanding of the fundamental drivers of poverty in each country, and the way in which economic integration can work in concert with other areas of policy to improve livelihoods for the extreme poor. The World Bank Group and the WTO both have a strong role in promoting coherence to support multilateral governance of the trading system, and the implementation of trade policies in a way that delivers the greatest possible benefits for the poor. The multilateral trading system has a significant positive effect on the global enabling environment. This supports trade’s contribution to growth and poverty reduction, as well as contributing to countries’ economic performance. An open, predictable, non-discriminatory, rules-based multilateral trading system will continue to be a necessary tool for development and poverty reduction in the future. Success in moving forward effectively on the Doha agenda will create new economic opportunities, boost business confidence and revive the support for multilateral cooperation aimed at reinforcing the stability of the world economy. As well as supporting multilateral, regional and unilateral trade reforms, the World Bank Group is increasingly taking the challenges faced by the poor in benefiting from trade into account. Its Trade Strategy and the formation of the Trade and Competitiveness Global Practice provide the tools for doing so, along with intensified efforts to address the challenges of fragility, agriculture, and others. The two institutions cooperate closely together on a wide-ranging agenda. Aid for Trade and other forms of multilateral cooperation are important in reducing persistently high trade costs in developing countries, and reducing poverty. This report stresses the importance of expanding the focus of this agenda to maximize the positive effects of trade for the poor.

The strong increase in trade was enabled by decreasing trade costs. Containerization (i.e., the transport of freight by means of large containers) and technological developments lowered transportation and communication costs leading to greater efficiencies. In addition, tariffs and non-tariff measures (NTMs) were reduced through multilateral, plurilateral and regional trade agreements during the last three decades. The volume of world trade increased by 43 times between 1950 and 2021. Average applied tariffs have fallen from 50 per cent in the 1930s to single digits since the 1990s, although other trade restrictions have been increasing in recent years.1 In 1995, with the creation of the WTO, the strengthening of a rules-based multilateral trade regime further provided the predictable trading environment that fostered trade and growth. This convergence was accompanied by a decline in global income inequality. The global Gini index (i.e., a measure of inequality, in which higher inequality is indicated by higher values) experienced a fast decline, from 70 to 60 points from the late 1990s to 2018, in large part due to strong income growth in populous poor countries. Global inequality in wealth, however, has increased. Income tax data reveal that since 1995, although the poorest half of the world population experienced about 3 per cent annual income growth, it only captured 2 per cent of the overall wealth growth because it started from very low wealth levels. The middle classes of high-income economies experienced slightly higher income growth and captured 60 per cent of the total wealth growth during the same period. Between 1995 and 2021, 38 per cent of the total wealth growth has gone to the global top 1 per cent (Chancel et al., 2021). Trade openness can also contribute to economic inclusion (WTO, 2018a). Some of the most open and trade-dependent economies, including Germany, Latvia and the Netherlands, are also some of the most equal in terms of income levels, living standards, and wealth disparities (see Figure D.2). Conversely, some economies have levels of inequality relatively similar to those of less economically integrated economies, highlighting the importance of complementary domestic complementary policies, such as redistribution and labour market policies, in promoting inclusive economic growth (IMF, World Bank and WTO, 2017; WTO, 2017). (b) Globalization has sharply reduced poverty From 1981 to 2019, lower- and middle-income economies increased their share in global exports from 19 to 29 per Figure D.2: Trade openness can go hand in hand with economic inclusion 20 30 40 50 60 1.3 1.7 2.1 2.5 Average inequality Gini index (2000-21) Average trade openness (log) (2000-21) High-income Upper middle-income Lower middle-income Low-income Source: Authors’ calculations, based on the World Bank’s World Development Indicators. Note: Trade openness corresponds to the ratio between the sum of exports and imports and gross domestic product (GDP). The Gini coefficient measures the extent to which the distribution of income among individuals or households within an economy deviates from a perfectly equal distribution. A Gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality. The average trade openness and Gini coefficients are calculated for the period 2000 to 2021, or a shorter period, based on data availability. The linear trend is represented by the dashed black line, which is statistically different from zero. - 66 - WORLD TRADE REPORT 2023 cent, and reduced the share of their population subsisting on less than US$ 2.15 per day from 55 per cent to 10 per cent (see Figure D.3). Trade contributes to poverty reduction by raising economic growth.2 Comprehensive trade opening in developing economies can increase economic growth by an average of 1.0 to 1.5 percentage points (Irwin, 2019). In turn, economic growth, through different mechanisms, has been found to lead to almost one-to-one rise in the real income of the poor (Dollar, Kleineberg and Kraay, 2016). The poor tend to allocate a greater portion of their income towards purchasing tradeable goods, particularly food and beverages, which can be subject to comparatively high tariffs (Cravino and Levchenko, 2017), and thus can gain disproportionately lower prices at the consumer level resulting from the reduction or elimination of trade barriers (Artuc, Porto and Rijkers, 2019; Faijgelbaum and Khandelwal, 2016). Some economies have, however, not benefited as much as others. While export-led growth has dramatically reduced poverty in East Asia and several Eastern European economies, the number of poor people in sub-Saharan Africa has, for instance, stagnated since the 1990s. Slower progress in economic growth and poverty reduction in Africa in part reflects slower growth in trade.

3. Reject it. It’s vague and unspecified which means we can’t read disads to it.

5 Social security as poverty alleviation and social protection programmes

Ideally, social security is a permanent social welfare structure which aims at a piecemeal and steady incremental improvement in the quality and standard of living of the citizenry. There is no gainsaying the fact that, in most developing communities such as Nigeria, there is a causal relationship between the absence of social security on the one hand, and poverty, on the other. However, the government initiatives which focus on temporary or permanent poverty eradication, are not social security measures, but are transient steps taken to form a suitable foundation on which social security programmes may be based. For example, in 2004 a survey of policies and interventions of various administrations on issues of poverty revealed 28 federal projects and programmes with poverty-reduction aims.73 These include community banks; the Family Support Programme; the National Directorate of Employment; the Peoples' Bank; Better Life for Rural Women; and the Directorate of Food, Road and Rural Infrastructure. These are some of the programmes that were established to address various manifestations of poverty, such as unemployment, lack of access to credit and rural and gender dimensions of poverty.

The specifications in the drawings for the mini-piles stated that the capacity for the mini-piles was "to be" 6,000 or 8,000 pounds and that the length of the mini-piles was "to be" adequate to get into undisturbed soil to a depth adequate for obtaining the required capacity. The specifications in the project manual stated that the mini-piles "should" have a capacity of 4 tons and 3 tons, that the mini-piles "should" be driven to minimum depth of 25 feet, and that a grout bulb "should" be formed at the base of a mini-pile. Kenneth Winters, an expert in structural engineering, and Richard Anderson, an expert in geotechnical engineering, agreed with Steve Maranowski, plaintiff's president, that the specifications in the project manual, because those specifications used the word "should," were permissive and suggestions of what plaintiff could do to achieve the required capacity. However, the trial court, when it instructed the jury on how to interpret the contract, instructed the jury that it was to interpret the words of the contract by giving them their ordinary and common meaning. An ordinary and common meaning of the word "should" is that it denotes a mandatory obligation. [*9] See People v Fosnaugh, 248 Mich App 444, 455; 639 NW2d 587 (2001) (stating that "the word 'should' can, in certain contexts, connote an obligatory effect"); Merriam-Webster's College Dictionary (11th ed) (defining "should," in pertinent part, as "used in auxiliary function to express obligation, propriety, or expediency"). Accordingly, viewing the evidence in a light most favorable to defendant, reasonable jurors could have honestly reached different conclusions on whether the specifications in the project manual were mandatory and, because Maranowski admitted that plaintiff did not use grout bulbs and did not drive all the mini-piles at least 25 feet into the ground, whether plaintiff breached the contract. Morinelli, 242 Mich App at 260-261.

9.1 The Draft Bill creates an obligation on the principal regulator to do all that it "reasonably can to meet the compliance objective in relation to the charity".[ 45] The Draft Bill defines the compliance objective as "to increase compliance by the charity trustees with their legal obligations in exercising control and management of the administration of the charity".[ 46] 9.2 Although the word "increase" is used in relation to the functions of a number of statutory bodies,[47] such examples demonstrate that "increase" is used in relation to considerations to be taken into account in the exercise of a function, rather than an objective in itself. 9.3 HEFCE is concerned that an obligation on principal regulators to "increase" compliance per se is unworkable, in so far as it does not adequately define the limits or nature of the statutory duty. Indeed, the obligation could be considered to be ever-increasing.

In understanding what Domestic IP Law means, we have to understand the context in which the word “domestic” is used. The English electronic dictionary defines domestic to mean “of or relating to home” and “internal to a specific country”. Adopting this definition, “domestic” qualifies activities peculiar to a locality which is home to some persons. Thus, an opposite of “domestic” will be “foreign” or “international”.

Therefore, Domestic IP Law will refer to the IP Laws of a region, state, or nation that applies to the people of such region, state, or nation. This is opposed to the International IP Laws. Here when we refer to the Domestic IP Law in this sense, we refer to the Domestic IP Law of States like Nigeria, Ghana, England, South Africa, Britain, USA, Cameroon, to mention but a few. For every State, reference must be made to its specific legislation, although the provisions of the law may be similar. There are, however, subsidiary legislations that may be made in a state to regulate IP practices, this class of legislations shall not be treated in this discourse. For the purpose of this discourse I shall identify the Domestic IP Laws of Nigeria, Cameroon and Ghana and reference shall only be made to legislations. I encourage detailed discussions on them on later sessions.

While the United States is the world’s largest economy and perhaps the only one capable of increasing global demand quickly, it is no longer large enough to be the single locomotive of the world economy or the global consumer of last resort. Because stimulus in any country will boost demand for both domestically produced goods and imports, the United States needs help from the other trade surplus countries to spur its exports and economic growth at a time when its spending and consumption are being diffused to help countries like China that are the world’s major producers. Absent such help, some observers say protectionist pressures could grow in the United States if the large U.S. stimulus increases U.S. indebtedness by far more than it increases demand for U.S. goods.44 Stated differently, if the U.S. economy after a year or two has little to show for running expansionary policies and incurring increased public debt—for example, unemployment remains high, there is little or no economic recovery, and the increased public debt begins to weaken the value of the dollar—the American public may ask why such a large share of U.S. stimulus spending is leaking abroad and generating jobs in countries that have not stimulated their own economies sufficiently to increase imports of U.S. products.46

The fiscal policies of the countries with large external surpluses, thus, are critical for the world economy to recover in a timely manner and, over time become more balanced in terms of spending patterns relative to production. In a deep recession, some analysts maintain that failure of the current account surplus countries to increase domestic demand in a substantial manner is a form of a beggar-thy-neighbor policy as they import demand from the rest of the world. According to this perspective, current account surplus countries are also exporting their unemployment to the rest of the world and “cannot be surprised if deficit countries even resort to protectionist measures.”47 Interestingly, the United States was the world’s largest current account surplus country in the 1930s, and, thus, was essentially in China’s position today.

A part of the discussion needs to be about better aligning the desirable with the attainable. In order to achieve the requisite degree of cooperation on arrangements that yield mutual benefits, it may be necessary to better understand limits to the surrender of sovereignty in a multi-polar world of varied interests and priorities. The reach of rules and commitments needs to be consistent with the possible. Flurries of enthusiasm unsustained by consistency of purpose and commitment only encourage over-reach, and weaken the institution when members cannot live up to their promises.

This is not an argument for being minimalistic and frugal with ambition. It is simply that securing mutually beneficial outcomes is preferable to talking about them while harbouring unspoken doubts about the feasibility of what is on the table. Understanding the limits of highest common denominator policy convergence, or in some cases any convergence at all, is key to stability and a sustained contribution to governance. If convergence is impossible, divergence must be managed. To call trading arrangements a ‘system’, there must be pre-commitment, predictability, and respect for process. To slip into trying to manage without a system would be an historic error of major proportions.

The World Trade Organization (WTO) – which was built around yesterday’s consensus to tackle yesterday’s challenges – is being pushed to breaking point by the entrenched disagreements of today. It will need reimagining if it is to rise to the 21st century challenges confronting humanity. And rise it must. The great trials confronting humanity imperil lives, not just livelihoods. Climate change, the pandemic, and persistent economic inequalities threaten to tear communities apart, spark social upheavals, and foster extremist politics within nations. Between nations, the same factors create strife that may lead to a fractured global economy, to commercial wars, or even real ones. What does trade and the WTO have to do with this? Trade is not the only thing we need to tackle these problems, but there will be no solutions without trade. We cannot fight climate change, repair the economic and health damage caused by the coronavirus disease (COVID-19), or redress economic inequality unless goods, technology, data, expertise, services, and capital move from nations where they are abundant to nations where they are scarce. This is exactly what trade does. International commerce is driven by arbitrage that moves things from where they are abundant, and thus relatively cheap, to where they are scarce, and thus relatively dear. Much more international commerce will be needed to solve the existential problems. However, the required trade growth will not happen without a high-performing multilateral trade system to provide certainty and to smooth inevitable frictions. This, in turn, requires a WTO that has the status, the clout, and the resources it needs. Call it the ‘WTO rising’ imperative.

Economic recovery efforts since the 2008-2009 global financial crisis have mainly depended on unconventional monetary policies. As fears rise of yet another international financial crisis, there are growing concerns about the increased possibility of large-scale military conflict.

More worryingly, in the current political landscape, prolonged economic crisis, combined with rising economic inequality, chauvinistic ethno-populism as well as aggressive jingoist rhetoric, including threats, could easily spin out of control and ‘morph’ into military conflict, and worse, world war.

Why does protectionism lead to conflict and why does free trade help prevent it? Learn about the connection between peace and free trade.

Frédéric Bastiat famously claimed that “if goods don’t cross borders, soldiers will.”

The World Trade Organization (WTO) – which was built around yesterday’s consensus to tackle yesterday’s challenges – is being pushed to breaking point by the entrenched disagreements of today. It will need reimagining if it is to rise to the 21st century challenges confronting humanity. And rise it must. The great trials confronting humanity imperil lives, not just livelihoods. Climate change, the pandemic, and persistent economic inequalities threaten to tear communities apart, spark social upheavals, and foster extremist politics within nations. Between nations, the same factors create strife that may lead to a fractured global economy, to commercial wars, or even real ones. What does trade and the WTO have to do with this? Trade is not the only thing we need to tackle these problems, but there will be no solutions without trade. We cannot fight climate change, repair the economic and health damage caused by the coronavirus disease (COVID-19), or redress economic inequality unless goods, technology, data, expertise, services, and capital move from nations where they are abundant to nations where they are scarce. This is exactly what trade does. International commerce is driven by arbitrage that moves things from where they are abundant, and thus relatively cheap, to where they are scarce, and thus relatively dear. Much more international commerce will be needed to solve the existential problems. However, the required trade growth will not happen without a high-performing multilateral trade system to provide certainty and to smooth inevitable frictions. This, in turn, requires a WTO that has the status, the clout, and the resources it needs. Call it the ‘WTO rising’ imperative.

On the second category, the vital thing I’m thinking of is dispute settlement and especially one particular upcoming issue that might be the most important thing the DS system — maybe even the WTO itself — will ever do. What’s surprising about dispute settlement isn’t that it’s under pressure but that it’s survived as long as it has. A sage and talented FT world trade editor called Alan was writing back in 2007 about the risk of judicial over-reach eroding support for the system, and quoting some dude called Robert Lighthizer to that effect. The Curse of Lighthizer eventually descended and the US crippled the Appellate Body. But the workaround version, dreamt up mainly by the EU, now has 53 members and seems to be functioning — issuing rulings on vital issues such as Belgian frites and so on. Just as well. There’s one overwhelming issue that trade needs to address: the environment, and particularly carbon emissions. As I’ve written before, there’s only one way the world is going to get anywhere near a global carbon price, and it’s not through negotiations at the OECD or the UN COP process or in the IMF or indeed at any other institution that fancies itself as a forum for global environmental governance. (Nor is it going to happen through voluntary corporate or investor-driven ESG-type carbon standards, the PR gunk for which clogs up my email inbox on a daily basis.) The only game in town is internationalising the EU’s emissions pricing through its carbon border adjustment mechanism (CBAM) by trading partners adopting it in order to get access to the EU market. CBAM is pretty clearly going to be challenged in the WTO dispute settlement mechanism by India or other big middle-income countries. Maybe it will come through unscathed, maybe the EU will have to tweak it. Maybe there’ll be some elements it can’t adjust and will have to compensate elsewhere. But what emerges will have at least some degree of legitimacy from being thoroughly chewed over in various WTO committees and other conversations and tested through dispute settlement. The best way to do global carbon pricing? Hell no. The only currently feasible one? Yes. Heavily dependent on the WTO to stress-test it? You bet. What else can we say for the WTO? It’s still alive. No one else is doing much of the trade work it does. Almost every country in the world has joined. (The mighty nations of Comoros and Timor-Leste, combined population just over 2mn, are joining at this week’s ministerial.) No member has left. It does some good research and surveillance of members’ trade policy. It puts on a good public discussion event each year. It’s got a better logo than most international organisations. Its HQ is in a lovely location by Lake Geneva and has a restful Chinese garden in front, fabulous Socialist Realist ceramics and murals in the entrance hall and a nice atrium with a tree in it. I’ve seen worse.

The Beginning of World Trade Disorganization? How the WTO is linked to the relative decline of U.S. power. Last summer, the World Trade Organization (WTO) entered a phase of paralysis as India unilaterally shifted its stance and vetoed the Trade Facilitation Agreement, a modest attempt to remove red tape at borders. The WTO, as its director-general Roberto Azevêdo lamented, has plunged into the “most serious crisis” ever since its formation in 1995. India eventually agreed to back down under American persuasion. Meanwhile, in an effort to update the WTO’s Information Technology Agreement of 1996, China presented a long list of IT products that it requests be excluded from the new agreement and prompted a deadlock, only later to make concessions to the U.S. when they threw their weight behind the 18-month negotiations. Uniting the two incidents is the emerging sense of frustration with the WTO platform and, consequently, the growing need for direct U.S. intervention in safeguarding agreements. The WTO has entered a new phase of existential crisis, being multilateral in appearance, but bilateral in essence. This is in revealing contrast with the past, when the U.S. could only be the spoiler, not defender, of the multilateral trade regime it established. Why is this happening to the WTO? There is a simple yet powerful explanation: The entire system of the WTO is underpinned by the American hegemon supplying political and economic capital. If the U.S. is in relative decline, the trade system will naturally fragment. This theory is known as the hegemonic stability theory. Hegemony and World Order In history, a hegemon is largely associated with the presence of international economic infrastructure. In the 19th century, the British hegemon underwrote the liberal international order in the form of free trade and gold standard. The liberal order was later re-established by the American hegemon, which has overseen the Bretton Woods system from 1945. By contrast, the absence of a leading power is a recipe for disintegration, as illustrated by the economic disorder during the inter-war period. It follows that a hegemon is required to provide the public good of an open, stable international economic order. How does the case stand in trade governance? After the Second World War, the U.S. utilized its overwhelming military and economic power and initiated the General Agreement on Tariffs and Trade (GATT) for trade liberalization. However, constrained by a bipolar structure shared with the Soviet Union, the U.S. opted for a relatively weak trade regime that did not realize the full potential of an open trading system. The GATT article XVIII, for example, granted special and differential treatment (S&D) to developing countries to allow for prolonged deviations from the doctrine of free trade This was no longer the case as soon as the U.S. entered the “unipolar moment” after the Cold War. The WTO, concluded at the Uruguay Round to replace the GATT, was permanent in setting, wider in scope and stronger in dispute settlement. WTO membership, on U.S. insistence, would be conditioned on the acceptance as a single undertaking of an extensive bundle of old and new agreements, including the GATT 1994, the Agreement on Trade-Related Investment Measures (TRIMS), the General Agreement on Trade in Services (GATS), and the Agreement on Trade-Related Intellectual Property Rights (TRIPS). This highlights not only the scope managed by the new trade system, but also the newfound will and capacity of the U.S. to underwrite the system. In the arena of international relations, power shifts all the time. The WTO was created at a time when developing countries, notably China, India and Brazil, have been rapidly catching up the West in economic and ultimately political terms – a trend that has become even more salient after the financial crisis of 2007-08. Under changing power distribution, developing countries are less willing to back down. Disagreements between developed and developing countries have become ever harder to resolve. Seen in this light, India’s rejection of the Trade Facilitation Agreement is a reflection at one point of the 13-year deadlock at the Doha Development Round, and ultimately of the inevitable decline of the WTO. Added to this noise of world trade disagreements is the sight of world trade disorganization. The 2010s have seen the return of regionalism and competing trade blocs – the very thing the WTO wishes to eliminate. The U.S. is currently negotiating two separate geo-strategic trade deals, the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP), respectively with Europe and the Asia Pacific, all outside the framework of the WTO. China, in response to its exclusion from the TPP, is busy promoting an alternative, the Free Trade Area of the Asia-Pacific (FTAAP), that would keep the Americans at bay. Overall, the failure of the WTO is indeed closely associated with the rise of multipolarity. Given the current trend, the WTO seems destined to fail slowly but surely. There is a caveat concerning the validity of this argument: if the WTO impasse can be explained by U.S. hegemonic decline, we should be observing a similar disintegration of two other pillars of global economic governance – IMF and the World Bank. Yet, the crisis confronting this duo, if any, is not as pronounced as that facing the WTO. Does this suggest that U.S. relative decline will not really lead to a WTO stalemate, after all? The answer is a resounding “No.” The key to understanding this perceived discord lies in institutional design. IMF and the World Bank adopts a weighted system of voting, under which the West dominates decision-making and dismisses challenges from rising states. In contrast, in the WTO, each member state has de facto veto power. This enables weak states to translate power into disproportionately large influence to be wielded against the U.S., materializing in advance the impact of U.S. hegemonic decline. Indeed, the tide against IMF and the World Bank by rising states has begun to surface in recent years. In July 2014, Brazil, Russia, India, China and South Africa established the BRICS Development Bank, and, among the five, China launched the Asian Infrastructure Investment Bank (AIIB). Both aim to provide development capital to developing countries – a direct challenge to the U.S.-dominated Bretton Woods order. A Way Out: Capitalism With a Human Face? If U.S. relative decline is inevitable, is there really nothing that it can do? A trick is to transform the “social purpose” of the WTO. John Gerard Ruggie, an international relations scholar, suggests that a legitimate social purpose to which rising states adhere would enable a regime to outlive hegemonic decline. In the context of trade, if rising states themselves endorse the virtue of free trade, why would they object to the existence of the WTO? Therefore, ideas precede any notion of hegemony. In the context of trade, developing countries often do not oppose free trade per se. What they protest is 1) trade neoliberalization, and 2) Western hypocrisy. Trade neoliberalization, for example, imposes a stringent intellectual property rights regime that condemns copying – a developmental route taken by the U.S., Japan and China – and makes industrialization difficult. This is made worse by Western hypocrisy, which imposes trade neoliberalization on developing countries on the one hand, yet turns a blind eye to generous agricultural subsidies at home on the other. All these turn the WTO into an object of resentment among developing states. This does not need to be the case. Under the GATT era, the trade regime was featured by the “welfare state” model, which involves a compromise between laissez-faire capitalism and social welfare. It was this (in addition to a bipolar structure) that gave rise to the special and differential treatment to developing countries and, more broadly, the appeal to flexibility and pragmatism in condoning protectionist behaviour (which is unseen in WTO’s legalistic regime today). This might explain why the GATT managed to survive the rise of Japan and the European Community but the WTO struggled to fend off the impact of the rise of the rest. A return to capitalism with a human face will save the WTO, not least by letting states themselves define their gains from trade. States only support the ideal of free trade (and the WTO) when they gain from it. A softer regime for the WTO, presumably under U.S. support, would enhance legitimacy, enabling the trade body to sustain itself. As a side benefit, U.S. support for WTO reform is a golden opportunity to reassert U.S. leadership, restore confidence in the American liberal order, and pre-empt alternative trade arrangements. The U.S. would be able to recast its current image as a major beneficiary of the current unfair system, and thus enhance its soft power. In light of the return to great power politics in the 21st century, this is of crucial importance.

The good stuff So here’s my attempt to get myself excommunicated from the Order of WTO Sceptics, possibly even spark a full-on Inquisition. There are two categories of solid pro-WTO argument I’ll look at. One: it doesn’t look like much but you’d miss it if it went. Two: it does a vital thing (decreasingly well, but it still does it). On the first: WTO types say a lot of its really valuable work is stuff the outside world never really sees — one country identifying a potential problem in another’s trade policy, bringing it up in committee and defusing it through negotiation before it gets to litigation or a big diplomatic row. The foremost proponent of this view is former WTO staffer Peter Ungphakorn. His case is here: he reckons that only 2 per cent of new trade measures are flagged as problematic and only 0.07 per cent end up in formal dispute settlement. He probably has a point. Most disputes would probably anyway have been cleared up without actual exchanges of artillery, but it very likely reduces the friction involved. Also on the first: the WTO might well affect(s) trade even if it’s not immediately apparent. This recent paper looks at trade policy uncertainty, taking as its example China’s supply chains before and after joining the WTO in 2001 and particularly its companies enhancing their competitiveness by importing more intermediate inputs. China cut tariffs during the 1990s before joining, but there appears to be an extra effect from the actual impact of accession, presumably through reducing the probability of the tariffs being raised in the future. So limited though the rules might seem, they do appear to give companies some confidence in trading.

More broadly, to ensure that international commerce plays its role in tackling humanity’s existential challenges, the status and clout of the WTO must rise. International commerce will be one of the economic mainstays in the fight against climate change and extreme poverty, and the global effort to reduce inequality via the creation of export-linked jobs in developing and emerging economies. The WTO rising imperative is about increasing the likelihood that international commerce remains as rules based as possible while supporting sustainable, inclusive, and equitable growth. Above all, a mindset change is needed. Leaders must recognise that the WTO is not just about commercial calculations best left to diplomats and trade ministers. It is about coming together to find ways of countering the challenges that endanger humanity. It is about saving millions of lives. It is about countering developments that threaten to lock billions into perpetual poverty. It is a place that requires head-of-state attention and the status to match. We are arguing that G20 leaders need to perceive trade as part of the solution to humanity’s existential challenges, and ‘WTO rising’ as an imperative.