We are more likely to see a slowdown in pursuing the policy initiatives relevant to trade due to the Covid-19 pandemic, and in some cases experiencing an indefinite -pause for the foreseeable future
The ongoing pandemic is giving birth to a myriad of questions we never thought of answering before. Peculiar concerns are bulldozing the foundation of established stories in every front, ranging from drawing rooms to closed-door diplomacies.
However, being an enthusiast in the field of international trade, I am a bit concerned about the fate of those nearly-concluded trade negotiations that were about to see the light of reality. It is better not to reiterate how the Covid-19 disruption is putting unprecedented pressure on trade and investment.
The coronavirus crisis is holding back the pace of the long-established global supply chains, which were cemented by numerous frameworks spearheaded by the World Trade Organization (WTO).
However, it is still unclear as to what will be the changes in these frameworks given the unpredictability of the impact of Covid-19, but some aspects are already becoming apparent - including relocalisation of key lines of production to an increasing role for digitalisation in production.
But, as said earlier one question that always remains: what will happen to the ongoing trade negotiations and investment treaties?
It is evident, those controlling the existing trade framework are feeling extremely unsettled which is forcing them into a crisis mode. For instance, ongoing negotiations on free trade agreements may get postponed in the current situation because, for example, a chief negotiator had to temporarily self-isolate, and a newmodus operandi for international negotiations may have to be formulated.
Furthermore, the WTO Ministerial Conference due to be held in June has already been cancelled, where many members had hoped to make progress on the longstanding WTO negotiations on fisheries subsidies.
So, it is quite apparent that trade talks underwent a pale juncture since the pandemic added a one-of-a-kind twist in the world economy. So, rather than expediting things, we are more likely to see a slowdown in pursuing the policy initiatives relevant to trade due to the pandemic and in some cases experiencing an indefinite pause for the foreseeable future.
Given these facts, it will necessitate the need for trade leaders around the world to draft PLAN-Bs at a time when the breakdowns and blockages in global supply chains for critical medical-related equipment and materials, such as ventilators and masks, are urgent reminders of how interconnected and dependent we are on trade.
Seemingly, trade negotiations are at a slow pace due to three principal reasons, first, policymakers are rightly focused on the health and livelihood of their citizens and the economy more generally.
Some global policy initiatives that looked important in January now seem like lesser priorities as governments work to contain the spread of the virus, tend to the ill, and work towards preventing a possible recession. Second, trade negotiators, many of whose jobs require international travel, maybe in quarantine or prevented from coming to office and holding meetings. Third, travel restrictions around the world, which are rapidly changing, have led to the cancellation or postponement of many face-to-face international meetings.
Right now, we are being encouraged to do as much as possible electronically, using video conferencing, social media platforms, and other digital modes. But online communication has its limits in the world of trade negotiations.
face-to-face meeting are often critical to facilitate the tough discussions and side meetings when it is necessary to put aside the prepared remarks and go off the script in an effort to find a common ground.
They are also more conducive for real-time back-and-forth and being able to read the body language of one's counterparts, which can be challenging on wall-mounted screens.
Finally, while travelling to another country, negotiators get the opportunity to meet with other negotiators both within and outside the government, who play an important role in shaping and finalising any agreement.
Another interesting story in this regard I must share that there are few pressure groups seen advocating a halt in all trade and investment negotiations amidst the pandemic and refocus on access to medical supplies and saving lives.
They called on governments to end unilateral sanctions; to remove all obstacles, including intellectual property rules; ensure that countries have the flexibilities to set aside trade rules that constrain their ability to resolve the pandemic; and to re-visit rules in trade agreements, including those that can encourage monopolies and reduce affordable access to all forms of medical supplies, and put at risk the lives of people in every country of the world.
They further stressed on the fact that it is not feasible for many developing and least developed countries to participate, given the digital divide and the need to focus all governmental resources on this public health emergency.
So, the desperate run for trade negotiations and investment treaties are quite stalled this time both in terms of applicability and plausibility. Therefore, it is imperative to ensure the Covid-19 pandemic necessitates a fundamental re-think of the types of rules that are negotiated in trade agreements.
Another aspect we must bear in mind is that there will likely be pandemics in the future, so the WTO should launch negotiations, on a plurilateral basis if necessary, to eliminate tariffs and allied restrictions on the wide range of medical-related equipment, supplies, and materials.
We must remember the critical time of 9/11, where global trade community worked against all odds to launch a new round of WTO trade negotiations, the Doha Development Agenda (DDA), sent a powerful message to us that over one hundred countries were prepared to shoulder initiatives that are needed to open markets and fuel global economic growth in the face of an unprecedented global challenge. The coronavirus presents an important opportunity to do the same, and we must not leave it untapped.
The author is Research Associate, Bangladesh Foreign Trade Institute (BFTI)