Safeguard WTO and multilateral trade, promote BRI and intl trade
China's reaffirmed support for the WTO is welcomed by most WTO members, now including Australia, who show a growing genuine desire to support and reform the WTO. President Xi Jinping confirmed that China will not retreat from these core trade values.
But is this enough? Unless this is supported by other WTO members, unless they can be united to back China's support for the WTO then China by itself is probably not enough. Make no mistake. The forces dedicated to the destruction of the WTO and the global multilateral trade order are powerful. So, the question becomes, what is required to mobilize and empower smaller members to be united to support the WTO system?
I offer four suggestions:
1)Mid-sized members of the WTO, like Australia, need to be encouraged and supported to recognize the threat to their own prosperity that would be posed by an undermining of the WTO. The Australian Trade Minister has finally become a strong supporting voice for the WTO. He has been supported in this opinion by representations from business organizations such as the Australia China Business Council.
2)The smaller members of the WTO need to develop a coordinated and common response to the United States' attempts to dismantle or sabotage the structure and operations of the WTO. This response may be to support the efforts of mid-sized members. It is appropriate to encourage those with greater influence like Australia to support the stand.
3)Representative business chambers need to be more active in their support for the WTO and to make this support known to political leaders. This is particularly important in countries where alliances have often relied on the United States because the United States is applying pressure to disengage from the WTO. Political leaders must be told by businesses that support for the WTO is essential.
4)The WTO is a product of a previous historical period and it does need reform to enable it to function effectively in a changed economic environment where China plays a far greater role. Reform does not mean dismantling. Business councils need to work with their WTO representatives to encourage reform so that the WTO better serves the interests of the global community.
We safeguard multilateral trade by refusing to engage in unilateral trade agreements. We safeguard multilateral trade by engaging in multilateral agreements such as RCEP and BRI. We safeguard the multilateral trade system by building an alternative to the dollar-based trade settlement system.
This means free trade and cross-border transactions cannot be threatened or hijacked by unilateral decisions to deny access to the SWIFT settlement system and the system of US-based co-respondent banks. As President Xi said recently, blockchain and digital currencies would serve an important role in the next round of technological innovation and industrial transformation.
Facilitating cross-border trade is a key objective of the Belt and Road Initiative policy. More efficient cross-border transactions use financial innovation. Blockchain is a modern iteration of the transactional structure that underpinned the success of the original Silk Road. This lies at the core of the Belt and Road Initiative and is a facilitation of capital account liquidity rather than an opening of the capital account.
The core of President Xi's support for free trade is shown with the Belt and Road Initiative. This is compatible with the WTO architecture and consistent with multilateral trade agreements. It is not a replacement, nor an alternative to the WTO. The structure of the BRI supports the WTO multilateral trade environment. Those who wish to destroy the WTO are also those who are most opposed to the BRI and often lump the two together.
The task falls to business chambers to actively explain the relationship between the BRI and support for multilateral trade. The Australia China Business Council does this in five ways. I offer these as an example and a guide for other business chambers.
1.We work closely with city and provincial governments to explain the way they can engage with the BRI. This includes greater explanation and education, so they have a better understanding of all the aspects of the BRI. Provincial and state governments can in turn influence the way national governments react to the BRI.
2.We work with our business members to deliver briefings on BRI activities relevant to their industrial sector. This includes agriculture, smart cities and AI developments.
3.We work with SRCIC and CCPIT to support delegation visits to share knowledge and explore business and investment opportunities that are compatible with BRI policy objectives.
4.We deliver, support and engage with a variety of public forums, roundtables and conference events that discuss the BRI. The objective is to improve the level of understanding at both the public and official level.
5.We provide briefings for ministers and officials in the national government and encourage their engagement with BRI projects. When support comes from the business community and business chambers then this counterbalances conflicting advice that may come from foreign sources opposed to the BRI.
The WTO is an essential foundation of global trade. The Belt and Road Initiative is an integral part of the multilateral trade environment. Both deserve the full and active support from business councils and chambers. Our activity is an essential part of presenting a balanced picture of the rise, legitimacy and importance of China in the global economy.
The author is president of the North Territory office for the Australia China Business Council.
The opinions expressed here are those of the writer and do not represent the views of China Daily and China Daily website.