Transcript 0:00 [intro music] Welcome to Trendlines, a podcast on global affairs brought to you by World Politics Review. My name is Peter Dirie. 0:13 Kimberly Ann Elliott will join us later for a look at the ongoing backlash against international trade agreements. But first, I'm joined again by Judah Grunstein for a briefing on current world affairs. 0:25 Great to have you back, Judah. Thanks. It's great to be back. So, uh, what did you bring for us today? 0:32 Well, I wanted to start with a briefing by Edward Lemon on Uzbekistan, and in particular, the succession outlook following the death of longtime authoritarian ruler Islam Karimov. 0:45 Uh, Karimov died last week after ruling the country for 27 years, and this is another classic case of something we've talked about previously a number of times, an authoritarian regime that offers the veneer of stability, uh, and in this case, a, a good deal of actual stability, but which masks great, a great deal of dysfunction under the surface. 1:07 In Uzbekistan's case, this includes corruption and state capture by elites, very severe political repression, and more recently, an economic crisis. 1:18 Uh, so Edward explains that, um, the current prime minister, Shavkat Mirziyoyev, is seen as the most likely successor to Karimov, uh, but he rules out two possible scenarios. 1:31 One, that the country will become more open and democratic, or that it will be undermined by Islamist radicals, uh, as is sometimes evoked by, by some more alarmist observers. 1:42 Uh, instead he, uh, he suggests that there will be a good deal of continuity, um, 1:50 in terms of, uh, the, the regime as well as, uh, Uzbekistan's relations with the world great- the world's great powers, namely the US, Russia, and China. 2:01 Um, he explains that Karimov did his best, uh, to, to balance the three against each other, uh, and relations with the US and Russia have seen some tensions and volatility over the, the past decade, uh, while the relationship with China is mainly commercial and based on natural gas exports, so, so it's therefore been a little more stable. 2:24 Uh, but as, as Edward explains, Karimov's successor will have to manage these relationships, uh, and in particular, probably a desire by Russia to bring Uzbekistan more closely into its, uh, sphere of influence, uh, while also addressing the economic crisis, which is a result of falling energy prices as well as remittances from migrant workers in Russia. 2:49 Um, and just to put it into context, the, Uzbekistan is in Central Asia, which has been a region over the past 10 years, uh, 10, 15 years, that has been, uh, very much in the spotlight due to the war in Afghanistan, as well as a lot of the geopolitical rivalries, uh, between Europe, uh, Russia, and, and most recently China over, uh, energy reserves and, and which direction the region's natural gas pipelines, uh, will go in. 3:19 Uh, so any time you have a change of, uh, leadership, and especially in a country that has been ruled for so long by one person, uh, it's, it's a reason to keep an eye on it. 3:30 And in the region, in particular of Central A- Central Asia, there are other very important reasons, uh, why, why, that make this a, a significant story. 3:40 Transfers of powers are, especially in authoritari- authoritarian regimes, are always a tricky time. 3:46 And, uh, another tricky time for a country, and you had a very good briefing covering that, is the, uh, the aftermath of peace agreements. 3:55 And you had, uh, Adam Isacson, uh, wrote a briefing looking at the peace agreement between the FARC guer- guerrilla and the Colombian government, um, that was successfully negotiated recently. 4:10 And, uh, he has a very good piece, uh, arguing that this negotiating phase, whi- which was very hard and, and, uh, took a very long time, and very intense mediating, uh, between the two, the, the two conflict parties, um, was in fact the easy part of the whole process. 4:28 And now that it, that, uh, that this process is entering into, into the implementation phase, uh, that this is the real challenge to overcome to finally, finally return Colombia, uh, to peace again. 4:43 So, uh, Adam lays out, um, uh, how the peace accord has a very detailed roadmap for disarmament, demobilization, and reintegration, um, but that the accord is actually, actually ha- still has to be ratified, both by a, an assembly of, uh, FARC commanders and a general, uh, uh, plebiscite of the Colombian, uh, population. 5:07 And the success of this is not guaranteed. It's likely, but it's not guaranteed. And any failure to, to ratify this would, would basically, um, throw the country back into war. 5:21 And even if it is ratified, um, and I, I can confirm this from, from my, the experience that African countries had with this, uh, it, it, demobilization, disarmament, and, and reintegration process, or DDR for short, is, is a very complex thing and very, and, and often goes wrong. 5:41 And because you have a, you have this, this general dilemma that, uh, the state has demonstrated that it is, that it is willing to bargain with violent actors for their reintegration, so factions of, of the armed groups involved in these agreements can get the idea that if they are a bit more violent, uh, they can probably get a better deal out of the government. 6:04 Um, so implementing this, this process that will likely take, uh, uh, uh, years or even decades to, to, to be finalized, um, will take a c- very continued commitment of both the government and, uh, the FARC leadership. 6:22 And so th- this, I, I think we can be hopeful in the case of Colombia because both parties already have demonstrated that they are committed to this kind of, to the deal and this process, but it's by no, no means, uh, 6:36 uh, a f- a finished thing. 6:38 A- and Adam identifies also one of the major potential spoilers, which is the, the fact that over the course of what's now been a, a, a, a longer than 50-year conflict, uh, there's been essentially a war economy install- installed, uh, especially in FARC-controlled territories, that is in some ways morphed into basically a, an organized criminal network, uh, that includes drug trafficking, but also taxation on local economies, and protection rackets, and things like that. 7:11 And so basically, a big challenge is to convince, uh, uh, an armed fighter or group of fighters that giving in their weapons, integrating into an economy that will obviously be less lucrative for them individually, uh, is in their best interest. 7:30 Uh, so the, the danger is that you'll have this sort of atomization of small armed groups that are no longer under a chain of command, but also not under the rule of law of the Colombian government. 7:41 Um, and, and that's something that we, we, that we see often in post-conflict, uh, countries and territories, and it, it just underlines again something that we've talked about previously, that the, the transition from war to p- to peace involves a lot more than just silencing the guns and stopping the fighting. 8:01 There are, there are long-term transformations that accompany conflict that take quite a bit of time to actually, uh, resolve and, and, and transition back into a peacetime, uh, fabric, social fabric. Exactly. 8:17 And, uh, then you had a, an interesting, uh, uh, piece by Ellen Laipson, one of your regular contributors, um, on Iran. 8:26 On Iran's global and regional engagement, or more accurate- or more accurately, the lack of it, uh, in the year or so since the signing of the nuclear deal with, uh, major Western powers. 8:38 Um, again, the deal was primarily an arms control agreement to get Iran back into compliance with its nuclear non-proliferation treaty obligations. 8:48 But part of the guiding logic of the negotiations was also to create conditions in which less hostile and more cooperative relations might emerge. 8:58 Uh, Ellen underlines that no one expected any miracles, but so far, by all indications, uh, Iran's supreme leader, Ayatollah Ali Khamenei, seems to want to make sure that no such change takes place, whether in relations with the West or with Iran's regional rivals, beginning with Saudi Arabia. 9:17 Uh, as she explains, Khamenei added fuel to the fire on Iran's dispute with Saudi Arabia over the deaths of Iranian pilgrims at last year's Hajj pilgrimage, pilgrimage, uh, basically accusing the Saudis of being unable to serve as the guardians of Islam's most important and sacred sites. 9:36 That dispute is a topic that Frida Ghitis, uh, has more on, uh, with her column today as well. 9:42 But at the same time, Ellen, in her column, points to the lack of any real momentum in Washington, uh, to build on the momentum of the nuclear agreement to improve relations and even, uh, to some degree, a hostility to Iran that has been exacerbated by the election season and in particular, the presidential election campaign. 10:04 So again, none of this is necessarily a huge surprise, uh, and it all could prove to be a transitional period for both sides. 10:11 Uh, but what Ellen concludes with is that real progress in building a more constructive relationship, uh, will really require a shift in thinking in Tehran in order to give Western leaders who do support an improved relationship something to work with. 10:26 Excellent. So glad to have you back, and, uh, thanks for, for coming on the show again. Thanks. It's great to be back. 10:33 [Instrumental music] It isn't the greatest time to, to be a proponent of free trade and international trade agreements. 10:42 With both major candidates in the US presidential election criticizing trade deals and a shadow over free trade and movement of people in the wake of Brexit, the movement, uh, to lower barriers on commerce has experienced a backlash. 10:56 For this week's report, Kimberly Ann Elliott explains how it has come to this and what needs to change. Uh, I'm Kimberly Elliott. 11:07 I am a senior fellow at the, uh, Center for Global Development, and I work on, um, a variety of globalization issues. 11:16 So trade policy, trade liberalization has never been a particularly popular with the general public, um, despite the fact that it has, liberalization has been, you know, going on successfully for decades since the Second World War, uh, lowering prices, opening markets, um, increasing competition, having lots of good benefits. 11:37 It's, but it hasn't been a, a, a, you know, a central issue in most campaigns. 11:45 And it sort of since the Great Recession, um, the, the depth of that, uh, of the economic pain, uh, the fact that growth in many countries has been relatively stagnant since then, and then layered on top of that, um, the immigration crisis in Europe and concerns about immigration in the United States, globalization in general and trade agreements in particular have become much more of a flashpoint. 12:12 And we see that with the, the Brexit vote in the United Kingdom this, earlier in the summer, and we see it very much in the American campaign, where, uh, President Obama has what he views as a key legacy of his presidency being this Trans-Pacific Partnership, a, a trade agreement among 12 Pacific Rim countries, including the United States and Japan. 12:37 Um, he, he very much wants that agreement, which he signed, uh, back in February, to be approved by Congress. But both of the, the US presidential candidates are opposing that trade agreement. 12:49 Both Hillary Clinton, who favored it when she was Secretary of State, um, and even more strongly Donald Trump on the Republican side. 12:58 [instrumental music] You're here today touting the Trans-Pacific Partnership, but Hillary Clinton is against it. Her vice presidential nominee, Tim Kaine, has now reversed himself and is now against it. 13:10 Donald Trump is too, meaning that the next president is opposed to this deal. Mm-hmm. So my question is, if you take both candidates at their word, how do you plan to get Congress to pass this deal during the lame duck? 13:22 Well, right now I'm president, and I'm for it, and I think I've got the better argument. Uh, a- and I've, I've made this argument before, I'll make it again. We 13:37 are part of a global economy. We're not reversing that. It can't be reversed. The notion that we're gonna pull that up root and branch is unrealistic. 13:50 [instrumental music] Um, obviously there would be debates around each trade agreement as it came up. 13:57 Um, they became, uh, in the United States at least, um, if you look at the votes in favor of trade agreements, the margin has been steadily declining over the last, oh, three decades or so. 14:11 So it's become more and more of a concern. 14:16 The other trend here that has, that correlates with the declining popularity of trade agreements is the increasing, uh, inequality, um, especially in the US where the safety net is much weaker, but in other countries as well. 14:31 Traditionally, the arguments in favor of, of liberalizing trade, um, are to get, uh, rid of barriers that make imports more costly. 14:39 Um, that feeds into protection for domestic industries that, that their products then also are more costly. Um, it reduces competition, which can, um, undermine the quality of products. 14:53 Uh, you know, industries can become, uh, complacent and, and not, um, you know, work as hard to make a good product at the best price for consumers. Um, 15:06 the, the problem with where trade agreements have increasingly gone is that ch- tariffs in the rich countries now, the United States, Europe, and Japan, and other, other countries, are relatively low. 15:17 So trade agreements are more and more about behind the border issues that can affect trade indirectly or, or that's not their major, uh, the major point is not trade. 15:30 It's, you know, it's a domestic regulation, like food safety or technical, um, qualifications, specifications for products, um, that can also affect trade. 15:43 And as the trade agenda has moved more into those behind the border issues, uh, many, many people in, in a lot of countries have become concerned about what that means for national sovereignty and for democratic choice. 15:57 So when I talk about this, you know, the, the concerns about trade policy as being, um, or at least as being more politically salient in rich countries relatively recently, um, there's long been a dispute, um, uh, up, up, with developing countries about how much trade liberalization, um, they should be required to do under the international trade rules at the World Trade Organization. 16:25 And, uh, many developing countries have argued that they need to have more policy space in order to develop. 16:32 They need to be less constrained by international rules, and that tariffs, uh, import protection can be a useful part of what's called infant industry protection. 16:42 That in order to get manufacturing and other industries even started, they need to be able to temporarily protect their market. So this, this tension between, um, 16:56 firms in the developed countries wanting increased access in the, the fastest-growing markets in the world, which tend to be the emerging markets, China, India, Brazil, um, that has run up against those countries, what they see as, as a need for more flexibility to, to tackle their development agenda. 17:15 And so that disagreement over how much liberalization developing countries should do has stalled, uh, negotiations at the international multilateral level for, you know, almost a decade now. 17:29 Um, and, and those negotiations have basically, um, uh, are basically dead. 17:35 The, there was a, a, a trade round launched in two thousand and one called the Doha Round that effectively collapsed around two thousand and eight. 17:45 Um, so the response of the rich countries to that collapse of negotiations at the global level has been to increasingly pursue these, uh, bilateral and regional free trade agreements. 17:58 And so that's where we, um, got the US negotiating, uh, the North American Free Trade Agreement with Canada and Mexico. 18:07 Um, Europe has negotiated with a number of, uh, both developed and developing countries around the world. 18:14 Um, and then the new development, um, in, in the last five years or so has been what are called these mega-regional trade agreements, and this is where we see the Trans-Pacific Partnership coming into, um, uh, a f- not coming into effect, but being signed by the United States, Japan, um, and 10 other Pacific countries, um, that would open up trade, uh, in that region. 18:42 Um, that was signed in February but is now awaiting congressional ratification. And then you have with Europe, um, the US launched the Transatlantic Trade and Investment Partnership talks. 18:53 And so those are, those sort of raise this regional trend up to a new level that is potentially, uh, is a, is a big concern to a lot of developing countries that are outside of these trade agreements that have no say in, in what rules are being negotiated there. 19:09 So that's raising a new set of issues, um, between developed and developing countries. 19:16 But these mega-regionals are also raising, and even going back to NAFTA, the North America Free Trade Agreement, um, that's been another source of concern for a lot of people in the United States and to some degree in Europe about some of the 19:31 new areas that are being addressed in these, in these regional trade agreements, um, where some of the concerns that developing countries have raised in the multilateral context, um, have been sort of pushed aside because of the fact that you have fewer countries and you have the United States generally negotiating with much smaller, um, and weaker countries. 19:54 And so they've been able to push this, um, behind the border agenda that many view as being a pro-corporate agenda. 20:03 So rather than being primarily aimed at providing benefits to consumers through lower tariffs and therefore lower prices, more choice and better quality, um, it's about protecting, um, corporate interests. 20:17 So intellectual property, having stronger patent protection for medicines, for example, has been a big issue. 20:24 Um, providing a special, um, grievance mechanism called the Investor State Dispute Settlement System, um, whereby, uh, multinational corporations can sue governments over, uh, regulations or other policies that they think, um, lower the value of their property has been a- another flashpoint, um, in the United States, but also that one in particular, the Investor State Dispute Settlement System, has been a very big issue, um, in Europe. 20:52 Um, uh, and then there are, um, services, uh, are a big part of these, these newer agreements, and those involve things like, um, you know, what are the qualifications for someone to be a lawyer or an architect or a doctor. 21:08 Um, and so those raise concerns that potentially, um, consumer safety or, or, uh, consumer protections are being undermined by these trade agreements. 21:19 And so that has become much more, has made these kinds of agreements much more controversial. Some people have said that my policies on trade will lead to a trade war. 21:31 Well, I guess when you think about it, we're already in one. We're losing tens of thousands of manufacturing plants. We're losing thousands of companies. Pfizer is moving to Ireland. We can't let it happen. 21:47 In my view, in general, the, both the benefits and the costs of most trade agreements, including the, these mega-regional trade agreements in the Pacific and across the Atlantic, um, are exaggerated. 22:00 Um, the, you know, US and European and, and tariffs in, in many other countries are mostly low already, so there's not much additional to do there. 22:11 Um, the newer areas, clearly the US is trying to stake out, um, you know, new ground for, uh, new rules. 22:20 Um, but quite often when, when you actually dig into some of the newer areas and the behind the border issues, um, the language in these agreements is more oratory. 22:30 Some of the more sensitive language is, is excluded from, um, dispute settlement, so it's, it's not, um, strongly enforceable. 22:40 So I think in principle, you know, many of the, the new rules, the investor state dispute settlement system, um, increased patent protection for medicines and, and much of the intellectual property agenda in general, there, these are things that in principle I think have gone beyond what is socially useful. 23:01 Um, they have, they are in the direction of more, um, of, you know, allowing rent seeking on the part of multinational corporations than they are, um, part of a, you know, freer market pro-trade, um, uh, agenda. 23:18 So I think there are, that, you know, in principle, I think some of these rules have gone too far in terms of en- encroaching on natural, national sovereignty and protecting investors over the interests of others. 23:29 I think in practice, the, the implementation, um, has been and probably will continue to be weaker and for, that these agreements will have less power than the critics, um, expect. 23:44 In my view, there are two, um, parts to, uh, restoring the credibility and the legitimacy of these, um, trade agreements. 23:56 Um, let me just say first that I think that my own pre- preference is for the multilateral system, and I think there are a range of problems with these bilateral and regional agreements that I think, um, that in general, the trade rules would be better addressed multilaterally, but that, you know, has been stalled. 24:16 And so I think these, these mega-regionals and, and the bilateral agreements are not going away. So if countries are going to continue, I think there are, um, a couple of tracks that, that need to change. 24:29 One is the substance of the agreements of themselves, scaling them back in some of these areas where, that are touching on, um, more behind the border issues that are challenging national sovereignty, um, or that are beyond what is socially optimal in terms of, of protection for corporations. 24:49 Um, so the, the intellectual property provisions, the investment provisions, some, some of those things, I think the substance needs to change to address legitimate concerns. 24:59 The other track is on the process side, that to the degree that, um- You know, uh, some regulatory issues, uh, need to be addressed and can be addressed, um, in, you know, in ways that are pro-consumer and pro-competition. 25:19 Then I think the process of how negotiate, trade negotiations are conducted and approved by legislatures needs to change to be more transparent, to be more open, um, and to better, more effectively engage, um, civil society. 25:35 Uh, and without that, whatever is in the trade agreement, I think it's gonna be continued to be difficult to get the public to buy into these agreements and, and to get legislators to approve them. 25:49 One other thing that in the United States in particular, 25:53 um, needs to happen to, to provide a foundation for an open trade policy is to improve, um, one, the overall safety net, um, and the ability of people to, uh, benefit from globalization. 26:11 Um, the US has a pretty weak, uh, trade adjustment system, pretty weak overall unemployment, uh, uh, system. 26:21 Um, healthcare is still good health, good affordable healthcare is still mostly available to people who have regular employment, and they lose that healthcare when they lose their job. 26:33 So even with the Affordable Care Act, um, having that key benefit tied to your job is a, is a big, makes people very anxious about the, the dislocations that accompany trade. 26:47 So there's a big domestic agenda that in the United States we need to undertake in order to provide a, a stronger foundation for an open trade policy. [Instrumental music] My thanks to Kimberly. 27:01 Her in-depth article on the issue and a lot of other coverage on international trade issues can be found on worldpoliticsreview.com. 27:09 There you can also subscribe to the World Politics Review newsletter while you should visit iTunes or another podcast app to subscribe to this show. Just search for Trendlines wherever fine podcasts are offered. 27:24 And finally, a bit of a follow-up to our briefing at the beginning of the show, which we always record one day in advance of, uh, publishing this episode. 27:34 Uh, since this show was recorded, um, as, uh, Judah had su- suggested, Uzbekistan's Prime Minister Shavkat Mirziyoyev was indeed named interim president by the parliament until an election can be held. 27:50 Trendlines is produced and edited by me, Peter Dirie. 27:52 You can follow me and World Politics Review on Twitter, and you can find links to pieces covering the issues we talked about in the show notes on worldpoliticsreview.com. 28:02 Have a fantastic weekend and see you next week for a new episode of Trendlines. [Instrumental music]
