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Perspectives: Speech diplomacy – the trade powers are still talking past each other

Recent set-piece speeches by ministers responsible for trade policy from two governments regarded widely as intransigent, the US and UK, failed to dispel the notion that they were just that: set speeches. The set-piece approach is symptomatic of a wider mistake involving the use of public trade diplomacy to justify your own position rather than seek broader consensus with partners. The phenomenon not alien in the EU and World Trade Organization.

In the annual calendar of international trade diplomacy, October and November are traditionally big months. This year’s set piece events are the COP 26 summit in Glasgow in November, and the WTO trade ministers’ meeting in December.

Meanwhile for the fifth year running we can expect edgy autumn talks between the UK and EU.

It is fair to say that expectations are not high.

The trade world fervently hopes for some signs of WTO life through a fisheries subsidies agreement, at MC12 – the deal currently hangs in the balance.

News that China’s President Xi will not attend COP leaves all feeling that it is unlikely that there will be a breakthrough moment, although various announcements this year at least suggest increasing commitment from Beijing to fighting climate change.

The sense of endless repetition for worsening outcomes hangs over UK-EU talks over Northern Ireland.

As is now traditional, the road to these major events has been marked by a number of speeches and various other forms of public diplomacy.

Many fell in the same week, with USTR Katherine Tai speaking in Geneva, Brexit Minister Lord Frost in Lisbon, WTO director-general Ngozi Okonjo-Iweala visiting Washington and writing in the Financial Times on carbon pricing, and the EU launching its latest proposals to resolve the tricky Northern Ireland element of UK EU withdrawal deal.

The many words spoken naturally covered many topics, yet there was an overriding theme: the view that “my side is right”.

Self-justification has of course always been a part of diplomacy. However, ideally this is balanced by the search for compromise and mutually acceptable solutions. Of the latter there was little sign.

Nothing new on the United States front

In her confirmation hearings in front of the US Senate in February this year Katherine Tai suggested some of the most important trade policy files, notably on China and engagement with the WTO, were under review. That useful holding line is now reaching its natural limit.

On China, Tai had recently suggested little change from the Trump administration’s approach, particularly regarding the issue of keeping the sweeping tariffs enacted at the time. Now Tai turned to the WTO, again with some consistency once the rudeness towards allies was removed.

A key passage of her speech suggested that “We are used to talking to each other, a lot.  We need to start actually listening to each other.”

A noble sentiment somewhat contradicted by the failure to consider other country points of view, offering instead a restatement of known US views on dispute settlement, worker-centred trade policy, the notification function of the WTO, and forced labour on fishing vessels.

The tone was at least constructive, expressing support for the WTO as an institution that rarely came from her predecessor Robert Lighthizer.

But the US’ failure to engage with other views on the substance of current WTO affairs does not augur well.

UK and EU largely talk to their own sides

There were striking parallels between Tai’s speech and that of Lord Frost in Lisbon earlier in the week. There was a positive statement: “We just want friendly relations, free trade, and the chance to do things our own way.”

It sadly cannot be taken for granted that this British government does wish the EU well, and there were indeed plenty of remarks which went against the positive sentiment. Perhaps the Frost speech’s low point was the suggestion that “for the EU now to say that the [Northern Ireland] Protocol can never be improved upon… would be to prioritise EU internal processes over relieving turbulence in Northern Ireland.”

Suffice to say that suggesting the other side of a negotiation values its own processes over prevention of conflict does not feel diplomatic. Thankfully nothing in remarks by the Commission when presenting their new operating proposals for the Northern Ireland protocol were quite so accusatory, even though many in the EU believe the UK to be fomenting trouble to justify escaping from their commitments.

The new EU proposals responded particularly to issues raised by Northern Ireland businesses, which had to be welcome. Even here, though, the public presentation of these proposals as major change, seemed not to match the fact that these are limited and rather conditional steps.

This may have been the EU playing the public relations game. Granted: it is difficult to respond fully to the UK’s concerns over the protocol as these seem to change frequently.

The WTO director-general adds carbon pricing to her long agenda

In a week of big speeches it was easy to miss the contribution of Ngozi Okonjo-Iweala to the preparation for summits to come.

The director-general called for the WTO, together with other international bodies including the OECD, to work on a common method of carbon pricing given the number of different national initiatives.

Clearly the EU’s proposed Carbon Border Adjustment Mechanism is the big driver for a renewed focus on carbon pricing, the fear being this will put more tension into a world trading ruleset already struggling.

However it was also possible to see in these remarks a response to the OECD Secretary General Mathias Cormann’s suggestion of the OECD taking the lead on the issue to the exclusion of developing countries.

The impending deal on international tax brokered at the OECD has been a clear success and it is natural to look at how to build on this. There may be little confidence that a struggling WTO can tackle another big-ticket issue such as carbon prices.

Ultimately though, this looks like the same problem as the Tai and Frost speeches, rendered at multilateral level: public diplomacy as a tool to defend your own interests rather than seek agreement.

While this is the prevailing political climate, it is hard to be optimistic about the prospects of progress on any major files or at the summits to come.

 

 David Henig runs the column ‘Perspectives’ on the politics of global trade for Borderlex. He is also a UK director at the think tank ECIPE.

 

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