Why did you write this book? In other words, is there an anecdote or a fact that made you want to write about the lies told by politicians in relation to international trade?
Over the last eight years or so, trade went from being something that very rarely made the headlines to being a major subplot in a lot of our broader political debates. A combination of Brexit and its implementation, the Trump Administration, US-EU-China tensions and managing climate change all pushed trade policy into the spotlight and kept it there. For me, the larger something looms in the discourse and the more politicians stake out competing claims and agendas on it, the more important it is that the general public have an understanding of the choices involved. As understanding trade became less optional for those looking to be active participants in their national political conversation, I wanted to write something that would help those who hadn’t previously waded into these murky waters.
During the Brexit debate we saw some genuinely dangerous ideas floated by very senior or influential people – all delivered with absolute confidence, through major and reputable media channels and with all of the aesthetics of authority. Had things gone differently and ideas such as leaving the European Union immediately following the Referendum without a transition period or trade deal in place carried the day, tens of thousands of businesses would have suffered – perhaps fatally. Yet the people advancing these ideas confidently asserted that there would be no consequences, and did so in a way that could well have proven persuasive. I wanted to write something to help the ordinary voter see through this kind of charlatanism and opportunism, and I hope my book makes a small contribution in that regard.
Can you give some examples of the unspoken practices of politicians and negotiators?
Being a politician is in significant part a sales job – selling yourself, your party and your ideas to the general public. A natural part of sales is to emphasise the upsides of your offering, and minimise its flaws, costs and drawbacks. This unfortunately runs contrary to the actual business of policymaking, which is invariably about balancing competing and even contrary interests.
In trade policy, politicians have a tendency to lean completely into this “sales” practice by putting their decisions forward as having vastly exaggerated upsides, and no downsides at all, or downsides exclusively for foreigners. Trade exacerbates this problem because most trade-related decisions are just one variable in a much more complex equation – trade policy is one factor in a decision to open a new factory, but there are many others.
As we speak, we see political candidates in the United States claiming that their proposals to impose import taxes on foreign goods will create a boom of new manufacturing across the United States, while somehow not creating greater costs for consumers. It’s an obfuscation of the very difficult decisions and trade-offs at play, and it’s damaging to the public discourse and the ability of voters to properly understand who and what they’re being asked to support.
Why is it important for international trade conferences to be a big show?
The strongest argument for making a bit of a fuss around World Trade Organization Ministerial Conferences is that they provide a natural deadline and a political inflection point. By far the largest barrier to progress on the WTO’s many negotiating agendas is always political will. Governments are being asked to make hard choices, sometimes with potential political pain at home, and the natural inclination of many political leaders is to endlessly put off having to make those decisions by sending negotiations back into committee. Having a large, highly publicised event with scores of Ministers in attendance creates a crescendo to work toward in negotiations, and political pressure on Ministers to make the hard choices so as to avoid having an event they participated in be branded a failure.
The counter-argument to this is that the above has produced results only very sporadically over the course of the WTO’s nearly thirty-year history, and Ministers appear increasingly comfortable returning from a Conference empty-handed. The Ministerial Conference as the be-all-and-end-all of multilateral trade decision-making theory only works if Ministers actually feel political pressure to deliver, and there’s an argument that many do not – and some may actually feel that being seen to thwart outcomes could be politically advantageous with domestic audiences sceptical of the WTO and its mandate.
Does this explain the failure of the WTO Ministerial Conference 2024?
The fundamental reason the WTO Ministerial Conference struggled to achieve significant improvements to the multilateral system is that the major players did not agree on what those should be. There is no Conference format that can resolve US-China sanctions, a global wave of populism and protectionism, Indian scepticism of multilateral outcomes and dissatisfaction with the system, and strong ideological disagreements in areas from the environment to digital trade. Ultimately, like most international structures, the World Trade Organization works best when countries broadly agree on a destination or goal, and need some help negotiating the details of what getting there looks like. That consensus simply does not exist in international trade policy at the moment, and WTO Ministerial Conferences that do not produce grand bargains are a symptom of this condition, not its cause.
How does this reality impact the critical issues of our time, from climate change to national security?
On critical issues like climate change and national security, the biggest implication is that some governments, including very large ones, are ultimately going to prioritise navigating them over fidelity to the international rules or the WTO. If something a government wants to do in one of these areas runs contrary to the letter and spirit of its commitments under the WTO treaties, we cannot automatically assume it’ll demur. In fact, increasingly, we can anticipate governments doing it anyway and either ignoring the rules or retroactively and imperfectly justifying themselves by twisting those rules into knots.
For those of us who are trying to influence policy in what we consider to be helpful directions, that means understanding that arguments about trade’s predictability, the importance of the rules-based system, and the efficiency benefits of free trade are not as compelling as they used to be. Governments can and are prioritising national security, climate action, industrialisation and domestic political concerns to an ever-greater degree. We have to meet policymakers where they are, and help them identify ways to productively channel trade to help them meet their objectives, while identifying the externalities and unintended consequences their decisions may have and suggesting ways these could be mitigated.
To give a really practical example – the European Union has recently introduced a number of measures like the Carbon Border Adjustment or the Deforestation Regulation that have profound impacts on trade and traders – with some questioning whether these are compliant with WTO rules. To my mind, this is a tertiary concern and a far better use of our time would be to ask how we can work with the European Union to make these and other regulations easier to navigate for small- and medium-sized businesses, especially those in the developing world. No one is cancelling gigantic, flagship pieces of legislation because someone whined about their legality in a WTO Committee, but that WTO Committee is a great place to engage on the substance and encourage fine-tuning.
What did the negotiators – and the head of the WTO – think of this book?
As you can imagine, I had due trepidation about what my colleagues in the trade policy field, most of whom are far more experienced and knowledgeable than I am, would think about this book. So far the response has been really positive, which was a tremendous relief. The formal reviews in places like the Financial Times and Lowy Interpreter have been kind, and informally those I’ve spoken to have been complimentary as well.
By and large I think negotiators generally say that while the book didn’t teach them too much radically new, it did occasionally make them chuckle, and perhaps more substantively it was useful in providing an accessible language to discuss many of the things they work on every day. While I’m rarely the most knowledgeable person on trade in any given room, I’m often the person who has thought the most about how to explain what we’re grappling with to a broader public, and a number of trade-folk have observed that they plan to borrow the way I illustrate certain complexities in the book. It’s tremendously flattering.
I strongly suspect Director-General Ngozi Okonjo-Iweala has far better things to do than read my book, but the WTO has been kind enough to put it in its bookstore and to give me a prime speaking slot at this year’s Public Forum to discuss it – so maybe someone down there didn’t totally hate it!
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Full reference:
Grozoubinski, Dmitry. Why Politicians Lie about Trade… and What You Need to Know about It. London: Canbury Press. 2024.
The book is also available from Amazon.
Banner picture: Shutterstock/rikkyall.
Interview by Marc Galvin, Research Office.