Almost four years back, Xi Jinping spoke from the hallowed podium of the World Economic Forum in Davos – the mecca of capitalism – and defended globalization. Even as Xi became the poster boy of multi literalism, he continued the strategy of weakening the global institutions that he was speaking in support of. Irony died many deaths on the night of 17th of January 2017. Since then, enough water has flown under river Landwasser. Post the pandemic the world has now finally understood the extent of Chinese clout in these institutions.
Biden administration’s strategy has to be on two fronts – bringing in long-pending reforms which require a multi-nation effort and to put in place a clear US strategy to counter Chinese influence. Some of the important organizations that need reform and attention are the UN and its main affiliate agencies like the WHO, UNHRC; and the World Trading Organization.
This column will focus on what the US needs to do.
Firstly, the US needs to recognize the extent to which the Chinese go to influence these institutions. Case in point is the election of the FAO Director General in 2019. China waived off Cameroon’s country debt ($78 million) to ensure its candidate withdrew from the race; is alleged to have used strong-arm tactics to bulldoze its candidate amongst African and European nations and spent lavishly in buying influence. The result was a stinging defeat for the US and Qu Dongyu won 108 out of 191 votes.
The US needs to build alliances – with the EU and other nations to create stronger and more robust partnerships to avoid such an outcome again.
Secondly, the US needs to identify crucial elections and ensure a cohesive and strong campaign for them. Not all elections in these bodies are worth fighting for and prioritizing is important. For instance, the term of the present Secretary General of the UN- Mr Antonia Gueterres comes to an end in 2022 and Biden needs to ensure the next head of the global body is not a China admirer. Mr Gueterres has hailed the program despite its serious pitfalls for smaller countries that fall into debt traps. Mr Gueterres’ encomiums of BRI include – “it will lead to the creation of a more equitable, prosperous world for all, and reversing the negative impact of climate change.”
Elections for the head of ICAO and UNIDO will take place in 2021 and the US must get its act together.
Thirdly, it is organisations like the UNHRC and UNESCO that US needs to guard the most. China is eyeing these to usher far-reaching consequences- that will violate the ideals championed by the UN. China wants to bring about two main changes- avoid censure for its reprehensible human rights track record and to change the definition of national security by which even gross acts of violence will come under the ambit of these agencies due to non-interference. Audrey Azoulay’s tenure as the Director General of UNESCO expires in 2021 and Beijing’s effort to have a candidate agreeable to Xi’s form of governance will have to be defeated. Already with the passage of several resolutions in UNHRC, Chinese-style human rights principles have already found their way in UN doctrines. A March 2018 UNHRC resolution has incorporated “the significance of national and regional particularities and various historical, cultural and religious backgrounds must be borne in mind”. This gives enough leeway for Chinese leaders.
The US must re-enter the agency it had exited in 2018 and ensure country-specific censures are brought in. This will undo the March 2018 resolution of China to allow “promotion of mutual cooperation in field of Human Rights” which allows rights-offending nations to get away with softer mechanisms instead of naming and shaming. Repressive regimes like China require country-specific resolutions are institutionalised.
Fourthly, China’s blatant and gross violations of the WTO mechanism must be addressed. Its ‘developing nation’ status is untenable and cannot claim protections that smaller economies need. How paralysed the WTO approach is can be gauged from the fact that China teamed up with nations like Kenya and Bolivia to ensure status quo on the ‘developing country’ status. Can the economies of Bolivia, Kenya, Cuba and Venezuela be given the same treatment as the world’s second largest? This fundamental question is at the heart of any reform at WTO. A three – tiered or a multi-tiered approach to define economic status of every nation is needed. Due to the consultative nature of WTO decisions, China will give up its developing nation status only as a tit-for-tat. This will come only when it loses leverage in bilateral trade negotiations with large economies like US, India and Germany. Some of this will come from addressing the issue of subsidies.
Donald Trump had this leverage prior to finalising the first phase of the trade deal between US and China. Instead of settling in for higher tariffs and increased committed purchases, US trade negotiators should have pushed for subsidy cuts by China as part of the trade deal. Since developing nations are allowed to have a more accommodative subsidy mechanism, any reduction in the latter should have a bearing in the definition of developing nation.
At least this is what the US and other EU economies must work towards creating.
Parallely, efforts must be focused towards penalising the heavy subsidy model of China’s state owned enterprises. From solar panels to aluminium, China’s actions violate WTO rules. As per US Trade representative, from 2007-2015, Chinese aluminium production increased by 150 % and its capacity by 243 % causing global prices to fall by 46 %. This led to US production and capacity falling by 37 percent and 46 percent respectively, despite a rise in consumption. The number of aluminium smelters fell from 14 in 2011 to five in 2016, with only one operating at full capacity.
Biden’s task is cut out. The world is watching.
DISCLAIMER : Views expressed above are the author’s own.