How China took over the WTO behind the West’s back

This is not to mention China’s self-proclaimed “state-capitalist” system, which by design alienates trading partners by always placing China’s narrow interests ahead of global free trade. The World Health Organization’s role in covering up for China during the Covid-19 pandemic is the most recent example. How far they’ve strayed from the purpose for which they were founded reveals either incompetence or malice—both to be handled with care. In addition, a stricter set of rules is required on multinational tech companies that have cashed in on the Chinese model with no repercussions at home, fiscally or otherwise. No wonder the trust on which the WTO functions has markedly faded as a result. China’s case should precisely instruct against that idea. If we fail to act quickly and keep on letting China rig global trade, we shouldn’t then hypocritically fault those countries that worry about the survival of their economies in the face of China’s neo-colonialism. Especially not when the second isn’t free at all. The larger idea that the WTO can accommodate a variety of economic and political systems ought to be outright discarded. If it does not, no amount of boxes ticked will stand in the way of an increasingly more totalitarian China emerging victorious. First, China’s membership in the WTO ought to be viewed as a policy mistake because the hopes that informed the West’s support for that membership—that welcoming China would create some sort of “path dependence” to political openness and transparent trade relations—have clearly failed to materialize. Today, however, we should lament that accession for three particularly important reasons that were highlighted in a recent report by the Fundación Disenso, Spain’s leading conservative think-tank, and our Uruguayan partner CESCOS. The reason why is obvious: China has made them immensely rich. In practical terms, the institution has functioned as an “institutional umbrella” that whitewashes China’s practices vis-à-vis the international community. During that time, the Chinese Communist Party has had the ability to co-opt the resources of the post-Cold War liberal world order and has been met with feckless indifference and neutrality from most of the Democratic world’s key players. Are two decades of unfair trade not enough? Many believed then—and some still do now—that China’s accession to the world’s trading forum was the concluding salvo in a long journey launched by Deng Xiaoping’s liberalizing domestic reforms of the 1970s. We have been blinded to—or chosen not to see—how Beijing has seized upon the growth and prosperity flowing from unprecedentedly open economic relations with the West to build the most technologically sophisticated and repressive regime in human history. Was it even liberal? Meanwhile, the goal of moulding China into the West’s standards and values has reaped the opposite result. This should merely work as a temporary fix whilst China transforms its political system. Whether it came to trust China out of naïveté or stupidity, the West is also to blame, especially since putting an end to this infiltration of critical international institutions is still well within grasp. The WTO and the Bretton Woods institutions, meanwhile, should stay vigilant, raise the bar for new applicant countries and enforce their directives and regulations. The WTO has ended up importing some of China’s protectionist rulemaking, which has severely undermined the institution’s core mission to advance open trade. But since the WTO itself needs to put its own house in order, consider one final avenue of reform – the WTO’s implicit legal customs and practices should be translated into explicit treaty language that binds China. Not while China stays in it without any repentance or penance. There are other options. In today’s world, we can either have free markets or free trade—but not both. In addition to being opaque, China’s track record as a WTO member is one of consistent maneuvering against the WTO’s very rules and the interests of fellow member states. According to British historian Niall Ferguson, that world order was never truly global in the first place, but was instead regional and not very orderly. The WTO bureaucracy claims the solution resides in enforcing the “rules of the game”. No matter how many boxes China ticks to appease the WTO’s qualms, the institution will remain hijacked unless and until Beijing renounces its autocratic regime. It is high time the West wakes up, learns from its mistakes and commits to putting an end to China’s abuses within the WTO. The long game is to demand that China abandons its current political regime, with all the economic implications that this may pose. American tech giants, along with the billionaires in Wall Street and Silicon Valley who invest in them, have consistently pressured into a pliant posture successive US administrations that were otherwise committed to containing the Chinese regime. Yet China was welcomed in 2001 under those very rules, so that approach seems insufficient. There’s a good case that it wasn’t since the institutions that form the system’s backbone have often deployed rather illiberal means to achieve liberal ends. How many feckless warnings will the West issue before China comes to completely take over the system? style=”font-size:40px; line-height: 1.3em; font-weight: 800; padding:7px;”>How China took over the WTO behind the West’s back

By Jorge Martin Frias
Executive director of Fundación Disenso

By Juan A Soto
International director at Fundación Disenso. This is the most important geopolitical development of the past 20 years. Facebook

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Last year marked the 20th anniversary of China’s entry into the World Trade Organization, a result that followed 15 arduous years of negotiations. That these institutions have been hijacked by illiberal members is why they shouldn’t be trusted to deliver on their mission. And who has benefited? In other words, ‘democratizing’ should be imperative. Lastly—and most importantly—, China’s hijacking of international institutions threatens to plunge the world order into a structural crisis. What is at stake is not only the displacement of Western hegemony by China, but the very survival of the liberal international order, however imperfect it may be. This, by no means, would be considered a final compromise between the West and China, or any other non-democratic political regime.