Mega-Regional vs. WTO…Competition or Collaborator?

Since the establishment of the World Trade Organization (WTO), there has been global trade cooperation with limited barriers. Everyone in the international community; whether a highly developed or under developed country; has had the opportunity to experience little or no tariffs on importing and exported goods and services. This has been one of the few successes of the organization. This success has been accompanied by “a narrative littered with missed deadlines, disappointments, and failed negotiations”(Lehmann). These failures has already contributed in deepening the gap between the North and South. Currently, trade agreements may undermine the WTO as a result of its failures.

Mega-regional organizations like the Trans-Pacific Partnership (TPP), has been the newest trade agreement that is attracting large trading partners. For over a year President Obama has promoted TPP and encouraged Americans to support membership in the organization. In a speech given to the Nike Inc. in Oregon, President Obama engaged the audience by illustrating how important it is for “America to write the rules of global economy.” He played on the audience connection to domestic production and international human rights standard by stating that TPP offers “strong, enforceable provisions for workers, preventing things like child labor” (Obama). As well thought out and auditory pleasing as his proposal was, I can not help to wonder how this new membership would enforce or ensure it’s proposal.

What exactly is the Trans-Pacific Partnership? The TPP is a regional trading partner that is focused on “China’s geopolitical nature”(Lehmann). This agreement will stengthen economic relations amount its 12 member states; USA, Japan, and Canada; just to name a few. There is a push to cut tariff barriers among its members to allow for more trade goods to be imported and exported among its members. Provisions in the TPP has said to include; wage equalities in member countries, enforcing human rights laws, and opportunities to start labor unions. For a domestic economist and the president of one of the biggest economies in the international community; this may seem like an opportunity to increase small businesses by offering export opportunities, and grow domestic labor force without having to compete with lower wage economies. Invertently, there is an opposite effect for developing countries.

Strengthening economic ties among already strong and rich developed economies only continues to deepen the gap between the Global North and South. Many developing countries are left outside this trade agreement by excluding “Bangladesh, China, Africa, India, Pakistan and Indonesia” (Lehmann). Developing countries will not have the capacity to compete with large economies which will further isolate them for the international agenda. Many workers will lose their jobs and livelihoods. With growing populations, these economies may weaken while having the potential to create internal conflict and become vulnerable to non-state actors like terrorist organizations. This will continue to feed into global instability; like climate change; the actions of the global North will in turn negatively impact those living in the South. It might sound like a straight pessimistic view on mega-regional agreements but we need to consider the reality and how all international actors play a key role in economic affairs and trade arrangements.

There is still hope for positive global trade transformation which includes the WTO and mega-regional trade organizations. Similar to President Obama push for empowerment for domestic small business owners, there needs to be more of a voice for developing countries in the global South. TPP needs to include more membership from developing countries and small business owners in those countries in order to contribute stregthing their economies. To do this, it is important to encourage more union formations in those countries, help create export markets for domestic products, and encouraged manufacturing as well. An example can be found in Ghana where there is large domestic production of Shea butter. This product is used in many hair, skin and body products globally. If there were more cooperation between manufacturers in larger economies to buy Shea from Ghana, potential is presented to create more jobs domestically, encourage export trade, while also enforcing fair labor laws and minimum wage in Ghana.

Mega-regional agreements has the potential to help close the income inequality gap between rich and poorer countries. It is essential to take this opportunity to rewrite the wrong done by the WTO and established fair trading agreements globally. While this proposal is still in its implementation phase, members should include the involvement of the global South. If membership is only focused on its 12 members then this will just continue to widen the gap between the North and the South. As we have seen in recent years; the importance of non-state actors has grown in international relations; it is important to help strengthen domestic economies of vulnerable developing countries reduce their attractiveness to terrorist groups and other non-state actors.

 

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