MANY researchers argue that the present pandemic predicament is different from the previous pandemic predicament because of globalisation. However, what distinguishes the present pandemic predicament from the previous ones is not its nature of globalism; it is, rather, its globalist attribute. The present predicament has given rise to many speculations and postulations regarding post-pandemic economic, financial and social crises — a fortuity envisaging geopolitical tension, which, in fact, co-exists since economic development gained attention. Yet, because of its globalist attribute, the pandemic has instinctively advocated a reconsideration of our present global policies not only in terms of cooperation but also on a bona fide global basis. The era we are part of is ‘economic globalisation era’ and, in fact, it will not be imprecise to address the era as ‘trade globalisation era’.
We have always apprehended ‘globalisation’ in connection with trade and economy. However, its exigency for solidarity, harmony, cooperation, and non-hierarchical alliance are never addressed adequately. The United Nations, in its charter, addresses solidarity, harmony, and cooperation on the hecatomb of non-hierarchical alliance. Scrutinising the present situation will drive us to Karl Marx’s ‘theory of social stratification’, in this case, the developed countries are the bourgeoisie and least developed and developing countries are ‘proletariat’. Consequently, we see the global economy is leaned towards bourgeoisie countries. However, it is arduous to assert that bourgeoisie countries are only benefited; but the proletariat countries are exploited. The COVID-19 pandemic has revealed the consequence of this exploitation — inconsistency in standards of human rights, indigent health services, dependence on economy, and so forth.
Although every country, more or less, are contributing to the global economy in this trade globalisation era, the present economic system that we are part of has made the economy connected to and dependent on one another. This COVID-19 pandemic has showed whether our present global policies comply with the principle of sustainable development, solidarity, harmony, cooperation, and non-hierarchical alliance. Despite having revealed the camouflaged political tension, failure of multilateral trading system as an institution and hatred among the countries, the COVID-19 pandemic has offered some opportunities to transform the unsettled world to a settled world through a global economic governance. Many researchers have argued for the need for a global governance. But global governance requires global solidarity in every aspect. Trade is one sector which has witnessed the maximum level of cooperation, mostly because of the shared interest. Hence, it will be facile to develop global economic governance in contrast with a global governance.
The present economic system that we are part of is not a brown or green economic system; it is, rather, a shared and connected economic system where the economy of each country is connected by the way of trade to that of another. Agendas such as human rights, labour standards, public health issues and others are connected to trade and to ensure any of these issues, we need economic development. Cross-border trade contributes in a large scale to this. Hence, trade which contributes to economic development and economic development which contributes to political tension need a governance system. Many have seen the World Trade Organisation as the major player in the field of global governance. Although it is presumed, the WTO helps governments to develop a harmonising and balancing trade policies. However, WTO rules and agreements suggest that it acts more to maintain a particular kind of political balance and has failed to develop a proper global trade or economic governance system. As we have seen since the Uruguay round, the WTO has failed to implement any new policies or bring any improvisation to the trading system. Moreover, it is observed that the members have overlooked the WTO and gave importance to bilateral and multilateral cooperation among them.
Political balance and stability are key to developing global economic governance because an effective global economic governance needs to be politically cooperated. But the WTO has failed to build effective global economic governance, mostly because of its dual-interpretable trade provisions and exceptions in major trade agreements. But every exception requires an alternative solution along with alternative action and the current trade system that the WTO advocates falls short of providing alternative action for any exceptions. Rather, the exceptions in the system allow limitless flexibility making exceptions a norm. COVID-19 has provided the opportunity for addressing many of these shortcomings in the international economic law and for allowing the law to build a global economic governance by creating legal obligations and limited flexibilities, by creating alternative actions, effective monitoring and accountability, a dispute settlement system that resembles any regular justice system while not contradicting with the basic principle and purpose. In long run, this global economic governance will help to maintain a balance in economy, to make it more sustainable and to provide a balanced economic development.
An effective global economic governance requires a risk or crisis management system. The present trading system, which is multilateral, has failed to facilitate trade during emergency. After COVID-19 had emerged in China, we have seen countries like Russia, Kazakhstan, Indonesia and many others imposing restrictions on the import of fish and animals from China. This was the first trade restrictions. Later, we saw restrictions coming on medical products and on food items. According to the WTO, trade has already decreased to 13 per cent and it can decrease up to 37 per cent if the present situation continues. Many countries have now put restrictions on the grounds of national emergency which eventually deceased trade and left many economic sectors of developing and the least developed countries suffering, as may be the case with the apparel sector in Bangladesh. According to our present multilateral trading system, countries hold the right to restrict trade under Article XX of GATT. What is concerning is that the countries do not have any alternative action plan to facilitate trade when Article XX is invoked. Therefore, the global economic governance needs to have an alternative action for Article XX or an anti-crisis multilateral trading system. Besides, effective global economic governance requires not only political cooperation but also organisational cooperation. Moreover, international organisations as global institutions need to be strengthened to act not only as a bridge of cooperation and harmonisation, but also as a bridge of governance and solidarity.
Sadiya S Silvee is a PhD candidate in international law at Zhengzhou University, Henan, China
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