Ambassador Alan Wolff | “Testing the Resilience of the Multilateral Trading System”

Ambassador Alan Wolff | “Testing the Resilience of the Multilateral Trading System”


MARK WU: It’s my real
honor and pleasure today to welcome to Harvard Law
School ambassador Alan Wolff. Ambassador Wolff,
as many of you know, has had an unenviable job
the last couple of months. But he’s done a terrific job
balancing all of the competing interests, as the trade system
has undergone much tumult, disruption, but also, a genuine
discussion about reform. And I can think of no one better
today to speak about the theme that he’s going
to be addressing, which is testing the resilience
of the multilateral trading system. But before I welcome on stage,
let me tell you a little bit about Ambassador Wolff. He holds a degree
from Harvard College. So welcome back to
your alma mater. He also has a law
degree from Columbia. He began his government service
at the Treasury Department, where he was the director for
the Office of Multilateral Trade Negotiations. He also was involved
in discussions with the IMF, the World Bank,
the OECD Development Assistance Committee. And he participated
in the drafting of the Articles of Agreement for
the African Development Bank. From there, he joined the
Office of the Special Trade Representative, where he
was the Deputy Special Trade Representative for trade
negotiations in the Carter administration, as well as the
general counsel of the office in the Ford administration. He also served as the acting
head of the US delegation for the Tokyo Round agreements. He then went on to service
in private practice for many years. He served as an advisor
to both Republican and Democratic administrations. He went on to serve
for many years as a chairman of the National
Foreign Trade Council, where he played a pivotal
role in shaping US trade policy in the course of the Bush
and the Obama administrations, before he was appointed
in October of 2017 to serve a four-year term
as the Deputy Director General of the World
Trade Organization. Inside the WTO, he oversees
the organization’s work on accessions, on agriculture,
on the environment, as well as a number of
different internal functions. And I think we all
recognize that he serves a most important role
as a conduit between Washington and Geneva these days. So it’s with great
honor and pleasure that I welcome Ambassador
Wolff back to Harvard. Thank you. [APPLAUSE] ALAN WOLFF: Thank you very
much to Professor Mark Wu. He’s doing a great job here. I was last here for
the Appellate Body at 20 celebration that was
organized by Professor Wu. And it’d be nice to
come back for the 25th, if we get that far. And I think we will. My purpose today is to address
the challenges that the trading system faces and its ability to
measure up to those challenges. It’s increasingly common
to read that the end of the liberal international
order is close at hand. And, by international
liberal order, what’s meant is really a geopolitical order
and a liberal economic order, which consists of the
multilateral economic system structure that’s 80 years old. And its future has been
called into question. The two components
were really considered by the founders of the
system to be indivisible. There was not a separation
between the geopolitical and the economic. The doctrine was first
enunciated by Woodrow Wilson in his 14 points. One of those points,
the relevant point, was the removal in
so far as possible of all economic barriers and
the establishment of an equality of trade conditions
among all the nations consenting to the peace
and associating themselves for its maintenance. So that concept
was embraced by all the participants at Versailles
and implemented by none. The idea didn’t die, though. It had really been carried– that flame was carried,
literally, by Cordell Hull. In the 1930s, he said– he was Franklin Roosevelt’s
Secretary of State. He said, “when war
came in 1914, I saw that you could not
separate the idea of commerce from the idea of war and peace. I reasoned that if we could get
a freer flow of trade, freer in the sense of
fewer discriminations and obstructions, we might
have a reasonable chance for a lasting peace.” That was in the ’30s. It was an idea picked up
by Churchill and Roosevelt at Argentia Bay in
their Atlantic Charter. They put out six points
in 1941 in August. And a few months later,
on January 1 and 2, 1942, those points were subscribed
to by 26 countries in a group that President Roosevelt, with
the support of Prime Minister Churchill, dubbed
the United Nations. That was January 1, 1942– the first use of
the term, as far as I know, of United
Nations, subscribing to the Wilsonian point of
the link between peace– and so, the geopolitical
part of things– with a liberal
international order. That thread of linking
peace, the geopolitical side, with the multilateral
trading order came through the
Bretton Woods system. The International
Trade Organization, which while it was
not put into effect, was succeeded by the GATT. And it was a core issue. Trade for peace was a core
element of US foreign policy for the postwar period, until
it disappeared altogether. There’s another place
where it came into being. And that was in an
agreement between the region of Tibet and India in 1954. They put into their
joint trade agreement so-called prime
shield, five principles of the link between
trade and peace that was adopted unanimously
by the United Nations General Assembly in December of 1957. All of that has
eroded very largely. There is no major
country that is talking about trade and peace
currently, linked in the same way as policy that
evolved from World War II. So what is happening? The evidence for the proposition
that the geopolitical world order is disappearing– the
liberal international order is disappearing, disintegrating– is pointed to through
the rise of populism; the movement in a considerable
number of countries towards greater
authoritarianism; the large number of armed
conflicts around the world; the number of uneasy
borders; the challenges from non-state
actors; and not least, the changes in the relative
positions of competing power centers and potential cracks
within longstanding alliances. So that’s the
geopolitical side, which is considered– which I
will not address further– but that’s considered
to be eroding in terms of the
liberal trading, the liberal international order. Then what’s happening
on the economic order? Long bill of particulars– that it’s being eroded
by the incompatibility of economic systems of
major trading countries; that it’s being eroded by
unilateral measures; that it’s being eroded by differences
over what is needed to promote economic development;
that it’s being eroded by an upsurge in populism,
nationalism, income inequality; the absence of political will
to liberalize trade further; that it’s being eroded
by an absence of trust; by it being eroded by
increasing concern that trading arrangements are not
mutually beneficial; that it’s being eroded by an
absence of consensus in the WTO as to how to move forward;
and a proliferation of bilateral and regional
trading agreements, as opposed to multilateral agreements. The multilateral trading
system depends very heavily on a recognition that the WTO
agreements are enforceable. It is a distinguishing
feature of the WTO that it has enforceable
agreements, as opposed to other international or
multilateral agreements. It depends very heavily
on voluntary compliance. But it’s a voluntary
compliance that’s backed up with working
dispute settlement, which now is threatened to cease
to function altogether by year end. And I’ll revert to that. Now, faced with all of
that, I am nevertheless convinced that the multilateral
trading system will, in fact, endure, that it will be improved
and that will, in fact, thrive. And I want to list eight reasons
why I think that’s the case. First, most of
world trade by far continues to be conducted in
accordance with the WTO rules. You wouldn’t know that
by looking at headlines and saying US China tariffs,
aluminum tariffs, steel tariffs. But in fact, most
world trade still is conducted in
accordance with the rules. Unfortunately, with
every positive point, I will have a counterpoint. Much depends upon a lack of
contagion, a lack of emulation. And every time an international
agreement is canceled, it becomes actually easier
to cancel the next one– and as we’ve seen that
in a couple of instances. Number two– world trade
is growing, not shrinking. The WTO withstood
the 2008 crisis. The multilateral trading
system withstood the crisis. Counterpoint, the WTO
anticipated world trade growth at 4.4% in 2018. Those numbers have constantly
been revised downward. The current forecast
for 2019 is 3.7%, but nevertheless,
positive growth. World trade is still growing. Number three– not one
of the 164 countries have said that they
have given notice that they are leaving the WTO. On the contrary, 22
countries are in the queue seeking to join it. It’s my happy responsibility
to actually work with the Accessions Division. They report to me on
the countries coming in. And that’s a reason
for optimism. Counterpoint, you
can’t ignore the fact that there’s an occasional
tweet, one that said, if they don’t shape up, I
would withdraw from the WTO. When the President of
the United States– founding country of
the WTO– says that, you cannot ignore it. And the US has tabled a number
of criticisms of the WTO. Number four– the solid
work of the WTO’s committees continues unabated. And the United States
is very active in all of those committees and
supporting them strongly. Counterpoint, WTO
is far from perfect. Transparency doesn’t exist
to the extent it should. There’s work to be done. Number five– the dominant
theme among WTO members is to make the WTO better;
stronger, not weaker. That includes the United States. To reform it to make it more
responsive to long-standing, as well as new issues,
generated by technologies driving a rapidly evolving
world trading system. So WTO reform is, in
fact, the dominant theme in Geneva at present. It was called for
in Buenos Aires by Lighthizer, US
Trade Representative, when he was in Buenos
Aires in December of 2017. It was picked up by
French President Macron. It was picked up by the G20
trade ministers, as well as the leaders. There are reform efforts led
by a trilateral group, which is Japan, the United
States, and EU, with respect to a number of issues. A group of 13 convened by Canada
in Ottawa that meets regularly; proposals from
countries like Honduras; an EU-China joint effort
at collaboration on reform; deliverables expected by the
June 2019 Osaka G20 meetings. There was a pledge at Buenos
Aires in December of 2017 to fix, finally,
fishery subsidies. Fishery subsidies
are a major problem. It’s not only the world’s
oceans that are suffering. It means that, when you
look at why there is piracy from Somalia, the livelihoods
of those fishermen were taken away by factory ships
that are heavily subsidized, that took away their fish. The fishermen turned to piracy. So there has to
be something done. There’s a pledge to gather
an agreement limiting fishery subsidies by December. And there’s a major
effort underway in Geneva currently to get that done. It’s a 20-year negotiation. But it’s showing some
promise for once. Joint initiatives
formed by countries– not all the same groupings,
but countries representing 3/4 of global GDP
at Buenos Aires said we’re going to
work on e-commerce. We’re going to work
on micro, and medium, and small enterprises. We’re going to work on domestic
regulation of services. And we’re going to
work on investment. And we’re going
to work on seeing whether participation by women
in World Trade can be enhanced. A proposal’s been put on
the table for transparency. Now a counterpoint to
all of that good news– outcomes are far from certain. We’re not there yet. Number six out of eight– while the functioning of the
WTO’s dispute settlement system is headed for an
impasse, no member has said that it wishes
the system to end. And intensive work has begun
to find workable solutions to issues that have been
raised as to its opposition. Counterpoint, there’s really
a substantial gap still between what the United
States sees as the problems and what other countries
see as potential solutions. But work is underway. Number seven– perhaps the most
compelling reason for optimism is that conflict
affected countries see the WTO the same
way the founders of the international trading
system, multilateral trading system, saw the
multilateral trading system. It’s a path to
stability and peace. And counterpoint
to that, that view is held dramatically by those
who most recently have exceeded and by those who are in the
queue at the door seeking to exceed. It is not something
that appears to be the policy of the dominant
players, the largest trading countries. Eight, and last– countries have
interests that are best served by membership in the WTO. It’s a matter of pragmatism. It’s not just that David
Ricardo told them that this was the best thing to do. They have economies in
which folks want to trade, and trade rules are
required to supply sufficient certainty to
allow international commerce to flourish. So it’s about
economic well-being. It’s very practical. And it’s really not
based on theory. Counterpoint,
members don’t always recognize the need to
conform their conduct to their longer term
interest in the maintenance of the global trading system. In other words, the
United States, over time, in its view, at least,
and I think accurately, contributed more than simply
an exchange of concessions. It didn’t say if you take
some of our chickens, we’ll take some of
your beer or whatever. It was more than simply
trade negotiators working for individual
commercial gain, product by product. It was about contributing
something extra to make the system work. And the question is whether
that will take place. And it’s an open question. It is a question for the
EU, and China, and the US, and others going forward. Will you contribute
more than just something for your commercial interest in
order to make the system work? That’s true of, say,
fishery subsidies, too. But reasons for optimism– there’s a trade imperative
since the beginning of time pretty much in ancient Sumer. The first clay tablets
that have been found have– the theory is that one of the
reasons for the development of cuneiform of
writing on clay tablets was to be able to conduct trade. Trade is needed for a
large variety of reasons. Efficiency. Autarky doesn’t work. I was in Uzbekistan
two weeks ago. And the ruler of Uzbekistan
for 16 and 1/2 years believed in zero trade. Uzbekistan is double
landlocked, meaning that the countries on its border
also do not touch the water. And what that leader
felt was the answer was total self-sufficiency. It didn’t work. So autarky is not a
good policy choice. So countries do trade
because of efficiency. Advances in technology
is an irresistible force. Trade can’t take place
without trading rules. And they were first recorded
in the Code of Hammurabi, which you can go look
at in the Louvre. And the WTO agreements
today have a panoply of issues that are vitally
important to having trade take place. Don’t raise your tariffs
above bound levels. By and large, that’s what holds. It’s not true in every case,
as we know, but it does hold. Non-discrimination with
respect to domestic regulation; no quantitative restrictions;
national treatment in applying domestic
regulations; some limitations on subsidies; notifying
standards which, in draft, standards are notified and
comments are taken into account of other trading countries;
providing transparency; and implementing adverse
findings of dispute settlement panels. And that’s far from
a complete list, but that system has served
the world very well. Under the WTO, in
its 23 years, trade has increased in value from
$5.6 trillion to $17.7 trillion a year by 2017. If the trade facilitation
agreement is fully in effect, costs at the border
are to be estimated to be reduced by another 14.3%. That swamps all tariff levels
on average around the world. So, challenges. By the end of the year,
the appellate body will cease to function,
unless a solution is found. There are three members. It takes three members to
make a decision, out of seven. Seven exist. The US is blocking appointments. There’s a strong risk
if there is no solution to a resort to self-help. Namely, we just want a panel. The other side says
we’re appealing. The first side– let’s say it’s
US and China– the US says, well, wait a minute. You know there’s no appeal
because the appellate body isn’t functioning. And the Chinese side
says, who did that? And the US says, well,
we’re retaliating. And the Chinese say, well,
we’re counter retaliating. So, what happens in the
absence of working dispute settlement is a high risk
of retaliation and counter retaliation. Countries are thinking of
what to do when the appearance of a cliff occurs in December. We only have one member left. Can’t make any decisions. No appeals are possible. And so there are
plan B’s around. One would be recreate
the whole system without the United States. That’s something that’s
out that’s floated. Or just accept every
panel as binding. It is not clear that there
will be a single solution as an interim. And, by the way, the crisis
is not quite as dramatic as one might think because
the appellate body, by its own rules, is– the members serve on any
case that they already were seized with. And they full up. So throughout
2020, they’ll still be the same folks who you
think were out of office a few years earlier– are still going to be
there deciding cases that they were seized with
before the system ceased to take new cases. So the crisis is not
existential for the WTO. There will be fixes, and
there may be a solution. David Walker, very
talented ambassador of New Zealand to the WTO,
is acting as a facilitator, talking to those who use the
system of dispute settlement to try to come up
with solutions. And I think progress
will be made. So this unique
attribute of the WTO– enforceability of rules–
is extremely important. It’s not, in any event, going
to disappear in the near term. Last week, a senior
White House official said that the greatest threat
to the multilateral trading system– and this is a statement
with which I agree– is inability to adapt to
current circumstances. If you want to just encapsulate
what the first major challenges for the WTO, it is adaptation
to current circumstances. So the WTO has to be able to
formulate new rules as needed with respect to the current
challenges it faces. In conclusion, once the Uruguay
Round was concluded in 1993, and implementation
went forward, and there was an attempt at a new round
of negotiations called the Doha Development Agenda, there
were a number of things that were accomplished, in fact. The trade facilitation
agreement, which is important; the prohibition on export
subsidies for agriculture, which is important;
and the expansion of the coverage of the
Information Technology Agreement, which
is also important. But once the Doha Development
Agenda seized up– failed to move forward in 2008– countries and businesses
began to turn their attention elsewhere to bilateral
and regional agreements, to other arrangements. And there was a period
which was a pretty low point in the history of the WTO
and the multilateral trading system, until the new
administration in the US came along. And there is now a– and that’s not me applauding any
particular trade restrictions by any means. But the reaction to the
fact that the US has put on the table a number
of complaints has been, as I mentioned, that other
governments, including the EU, and China, and
others and the G20, have said there has to be change. And there is discussion
of potential reform of the appellate body
and a spirited discussion on differentiation. One of the things the US
complained about is 120 of you, members of the WTO,
out of 164, you claim developing country status
because it’s self designation. Well, Singapore, for example,
has twice the per capita GDP of the United Kingdom. So the US says,
well, wait a second. Why do you get special and
differential treatment? Not Singapore, but all of you,
including some rich Middle Eastern countries and a
number of other relatively well-off countries. You are not the same as Chad,
Benin, Burkina Faso, and Mali. You actually don’t deserve– upfront, before any
negotiation starts– the notion that you’re going
to get something preferential before we even talked about
what it is we’re talking about. And there’s, as I say, a
spirited discussion in Geneva about that. The joint initiatives are a
very positive development. But what I’d say
is less noticed– but I see it because of my
responsibilities with respect to the Accessions Division– is the countries
that want to come in and why they want to come in. The last two members
to come in in 2015 were Liberia, which had suffered
from Ebola and a civil war, and Afghanistan. And its problems don’t really
need to be articulated. Everybody knows them. And they are very
enthusiastic about the WTO. They are evangelists
for the WTO. And a line has formed at
the door of countries that desperately want to come
in, including Comoros, Sao Tomé and Príncipe,
Somalia, Timor-Leste, Ethiopia, South Sudan, Sudan, Iraq. They’re countries
that want to have a chance at peace, which
means their people have to be better off. They need economic development. And they see reform– the essence of joining the
WTO is domestic reform. They see reforms and integration
into the world economy as a path towards peace. We had, at the public forum
this last year in October, the first president of
Timor-Leste, President Gusmao. And his English was– I was chairing a panel,
and I asked him to sum up. And first of all, he
impresses one like one would have felt you’re in the
presence of Nelson Mandela. There is something about him. He said, I speak very
haltingly in English. I learned my English in
seven years in prison. And he was the guerrilla leader
who got their independence and then brought about a
process of reconciliation. And he said that he
was joining the WTO. His country wanted
to join the WTO because it saw it as a pathway
to a more lasting peace. In Djibouti, in December of
this year, we had on our panel the ambassadors of South Sudan
and Sudan, which was remarkable in and of itself, of these
two ambassadors sitting next to each other. These countries have
a bit of a history. And the ambassador
of South Sudan said, where there’s
trade, there’s peace. So it’s remarkable
that actually what Cordell Hull was
thinking in the 1930s and the US put into
effect in the 1940s is a feeling that’s really
shared by a number of countries today, who aren’t jaded
at all about the WTO. Bosnia and Herzegovina,
Belarus, among them, are very interested in joining. And they made a decision,
including, as I mentioned, Uzbekistan. They stand in Tashkent, and
Samarkand on the Silk Road. And you know that trade
was there for millennia. And it will be there
for millennia, probably. And they believe
that integration into the world economy
will make it a better lives for their people. So I’m optimistic about
the future of the WTO. I’m optimistic because of
the countries I deal with. I mentioned the four
West African countries. They produce cotton. They do not produce
cotton very well. And everybody in the
rest of the world that produces cotton or consumes
cotton wants to help them. So I chair a consultated form
on development assistance for cotton. And it means that
Pakistan, and India, and Brazil, and the United
States, and Australia– Australia is the most
efficient producer of cotton in the world, twice
as efficient as the US– they just want to help these
countries, Burkina Faso, Mali, Chad, Benin, to be able to
have better livelihoods out of the production of cotton. And there’s a very good
spirit in the room. So, with reforms,
with the energy I see from exceeding countries,
the future of the WTO, I think, has the prospect to be
nothing short of brilliant. Thank you very much. [APPLAUSE] Happy to try to answer any
questions, if there are any. MARK WU: If you have a
question, if you would please wait for the mic, [INAUDIBLE]. AUDIENCE: Hello. Christina Davis, professor in
the Department of Government. Thank you so much. This is really encouraging
to hear from you. And I hope that you are right. We will be back to verify your
25th anniversary of the WTO. I wanted to follow up
on your broad theme that trade lays the
ground for peace and ask, what about the
reverse, that you have to have good foreign policy first? Because one of the applicants to
join the WTO you didn’t mention is Iran, which
would like to join, but is probably going to have
to wait longer for reasons unrelated to its trade policy. And it’s not the first to have
foreign policy used as a card when they get to join. China was going to
join the GATT in 1989 and had to wait after
the Tiananmen massacre. So what is the
appropriate role when evaluating countries trying to
join the organization in terms of non-trade issues,
especially as this organization is such a powerful tool
to shape cooperation and a liberal order? ALAN WOLFF: I’ve
had conversations with delegations from Iran
over the last year and a half. And to some degree, the
ball is in their court. That doesn’t mean that it’s
a free pass for any country to get in. You need a consensus. WTO is a consensus
organization– 164 countries and every country
has a right to express a view. So, we’ll see what happens. It could be an evolving
situation, maybe not. But right now, the
Iranian government has some decisions to take. AUDIENCE: Thank you very much. Paul [INAUDIBLE],, senior
fellow from the Kennedy School Mossavar-Rahmani Center. One country that
you didn’t mention in your talk, which was very
informative, by the way, was China. Could you talk a little bit
about how China operates within the WTO, what sort
of philosophy contribution it has, and particularly,
in the context of the apparent sort of
pullback of the support of the previous benign hedge
among the United States for that organization, how that
rebalancing is taking place? And can we look to
China to, as they’ve indicated in some of the
high profile speeches from the president
and others, to really be the sort of
flag bearer, trying to underwrite the liberal
international order in the future? ALAN WOLFF: China is a,
in one of the areas I deal with, major supporter
and participant. That’s the accessions process. Very active on that
side of things. It states that a red line for
it is it’s developing country status, which would be in the
case of the world’s largest exporter and the leading country
in artificial intelligence and a number of other areas. That’s a sort of a
controversial statement. On the other hand, several
hundred million people still live in poverty, on
small lots in agriculture. So China sort of
presents a mixed picture. As to how it conducts
itself, it considers itself a developing country. It expresses solidarity
with developing countries. And my hope is that the
US-Chinese negotiations, which are currently underway,
will ultimately lead to the rules of the WTO
being broader with respect to coverage, both
of what China– broader with respect to the
conduct of all parties, China and the United States included. In other words, the US has
put on the table the notion– well, it’s put on the table one
thing– transparency, so far, along with some others– proposal on transparency. But there are other things
that the US, EU, and Japan have said they would put
on the table, which are rules on domestic industrial
subsidies, rules on state owned enterprises, rules on
forced technology transfer, rules on excess
capacity build-up. To me, it makes sense for
whatever is done bilaterally, to look at it and
say, how would that fit into the international
trading system? So my hope is that
the WTO becomes more relevant to the current
bilateral set of issues. AUDIENCE: Hi. Thank you for your presentation. Sonia Roland from
Northeastern University. I have two questions. One is sort of short
one, and another is in the vein of
the two questions that have been asked already. The short one is on
the appellate body– the future of the
appellate body. And I was just
wondering, any chance that it might lead to a
revival of the arbitration procedure, which I think
was only ever used once– the one step
arbitration procedure which would bypass
panels and so forth? But if we’re
talking about panels as being a one and last
place of adjudication, if there’s no functioning
appellate body, then we might as well just go
to that binding arbitration. That’s what it was designed
to do in the first place. And, of course, it
could be the same people in terms of panelists anyways. So that’s just a thought. I haven’t seen much
written or said about it, so I was just wondering. And the other thing
is the long view you’ve presented on sort of
this linkage of trade and peace, which I think is a
very important reminder of these days, and
I’m very happy to hear you talk about it in
those terms and present the current situation
in that context. But it’s also a quite
western centric view. And you do– I take your
point about a number of acceding countries
also apparently subscribing to that view. But certainly, there are
also some major WTO members– Russia and China come to mind– that don’t necessarily
seem to subscribe to that view and
that linkage, that are pursuing an aggressive
trade agenda in the context and intimately linked to an
aggressive geopolitical agenda. So I was wondering if you
could comment on that. Thank you. ALAN WOLFF: Two things– first, binding
arbitration is always– it’s there. It’s in the dispute
settlement system rules. And you can always go to it. The question is whether
an ad hoc system is going to be very effective. So country A sues country
B– wants to sue country B– and says, why don’t we agree
to binding arbitration? Country B says, well, I think
I’m going to lose, so no. So the question is whether an
ad hoc approach of why don’t we just have binding– we all agree before
we go to a panel that the panel result
is going to be final, or that we’ll go
to an arbitrator and we’ll accept whatever
the arbitrator says. But I think I’m in the wrong. Do I want binding
arbitration, then, when the choice is maybe not? So we don’t know. We don’t know what the world
looks like when you just sweep away the current system
of binding dispute resolution, where you say, well, sometimes,
I’ll be a complaining country. Sometimes I’ll be a
responding country. So I agreed to this system,
which I did, back in 1995. Do you do it on an ad
hoc case by case basis? Well, you have a
domestic debate. Is this in my interest to accept
binding dispute settlement through arbitration
on this case? Well, I don’t want to, so
I’m not going to do it. So what are you
going to do to me? AUDIENCE: Before you agreeed
to binding [INAUDIBLE] body, and then that’s the difference. ALAN WOLFF: Well, the
fact is I’m saying, if the current
system freezes up, do all countries,
163 others, say, oh, we have an alternative. We have a plan B. We’ll all go
to plan B. It is just not clear whether they will. And yes, you can rebuild
the system totally, based on Article 25, which is
binding arbitration, or not. And you don’t get consensus,
oddly enough, among 164. I don’t think you
get consensus amidst 163, buy-in of trade and peace. What I said in my remarks was
for Timor-Leste, it’s clear. For Sudan and South
Sudan, it’s clear. For major players,
it is not clear that that’s motivation
for any of them, including the United States. It used to be for the United
States for a long time. It was sort of
built into the DNA, built into the genetic
makeup of the United States. Are others espousing that? No. And one thing I would
say about Russia is it plays a very
interesting role in the WTO. It has been very positive with
respect to putting proposals on the table to try to
compromise differences when it didn’t even have
a strong economic interest in resolving a problem. I think that there’s
a belief in Moscow in the multilateral trading
system and its value. And we don’t look at the
politics of any of our members. And there’s quite a
variety, an enormous variety in terms of the
types of governments that exist among those 164. So what we look at is what
they’re contributing in Geneva. MARK WU: OK, we have time
for one last question. And I know some people
have class at 1:00. So if you need to
leave, please feel free. AUDIENCE: OK,
thank you very much for the inside information. My name is Farouk Mattins. I’m the chief consultant
for RSA Enterprises. My question has to
do with something Indira Gandhi said
a long time ago, that developing countries
do not want foreign aid. They want trade. You cannot go to the World
Trade Organization to negotiate foreign aid. That you can go and
negotiate trade. Do you think by the fact
that most of the developing countries that are not included
in some of the trade, World Trade Organization, that
would be naturally kept down and would be short changed. ALAN WOLFF: I’m sorry. The last sentence? AUDIENCE: Short changed. Whether they’ve been
kept out because they’re not part of the
trade organizations. ALAN WOLFF: Those
who are not in– AUDIENCE: That’s right. ALAN WOLFF: Already. I don’t know that
they’re being kept down. They have no rights. So they’re not raised up. I mean, a question
is, if you said to the United States,
what’s your position if you were outside the WTO? The fact is you have no rights. Anybody can do anything
they want to to your trade. And they do. And the US response
would be we’re muscular. We’re strong. We have a number of
ways of responding. But it’s not a very healthy
thing to be on the outside. Now, with respect to
the countries coming in, there have been instances
where they have suffered terrible discrimination. And when we say developing
countries, not just in Africa, for example. It’s not the poorest always. But there’s some pretty poor
countries in Central Asia as well. And they have suffered some
massive discrimination. And they adjust by
diversifying their trade, dealing with, let’s say,
better actors, such as the EU. But they have no rights. And it’s not a good place to be. But it’s a motivating fact. Not every country is active
in its succession process. When I say there
are 22 at the door, some are sort of not
necessarily doing anything with respect coming back in. Lately, there’s been
a lot of reactivation of very old applications. Belarus’ was suspended
decades ago, for example. But Algeria isn’t
knocking at the door. And it’s applied 30 years ago. It doesn’t have an interest. And I’ve not talked
to any Algerians, so I don’t know what
their thinking is. But I guess they just don’t
see it as in their interest. It’s a painful process
to join because it involves enormous amounts
of domestic reform. In the case of China, some
10,000 laws and regulations had to be changed
in order to get in. It was a long, hard process. Russia was a long,
hard process, too. And it may be that it depends
on the government of the day. And accessions– there’s
a coup some place. And the process of accession
is just put on ice, as the new government thinks
about what it ought to do. So I don’t see them either
not necessarily discriminated against, but they can be. It’s a very vulnerable position
to be in to have no rights, other than you negotiate
bilaterally, and you have no– if you’re a developing
country, chances are you don’t have any leverage
to get a good deal bilaterally. Thank you. MARK WU: Well, I
was going to say, I think we know that a
lot of important work awaits you in Geneva
on accessions, on all of these other fronts. And we’re especially grateful
that you came all the way across the Atlantic to spend
the day with us here at Harvard. So please join me in
thanking Ambassador Wolff. ALAN WOLFF: Thank you. [APPLAUSE]

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