Can Baydarol
Since I first became interested in international relations, I have always tried to understand the concept of the ‘new world order.’ This time, I admit that I am tired, I am giving up trying to understand it, and I prefer to look at disorder rather than world order.
Following the Second World War, one of the key findings when questioning why the war had broken out was the trade restrictions imposed by countries to protect themselves through high customs duties and quotas.
In order to prevent such a situation from arising again, an important agreement was signed in 1947: the General Agreement on Tariffs and Trade (GATT). Under this agreement, countries were divided into three categories, and long-term negotiations were envisaged to remove trade barriers. The reason for dividing countries into three categories was their differing levels of development. The reason for not immediately liberalising trade was to prevent the emergence of a new system of exploitation that would favour developed countries.
In this regard, middle and less developed countries will be allowed to maintain their protections for a while longer, and full trade liberalisation will emerge as these countries develop. During the long negotiations (rounds), an important principle was that if a country took steps to liberalise any tariff in favour of another country, it would be obliged to do so for all countries. For example, if we have very good relations with Azerbaijan and decide to eliminate tariffs on ‘x’ goods from that country, we would be required to apply the same treatment to ‘x’ goods from the rest of the world.
The protracted nature of the negotiations also revealed that world trade was not liberalising as desired. As a result, two exceptions were provided for within the GATT framework. By deviating from the principle that tariff elimination should apply to all countries, some countries were allowed to form a customs union or free trade area among themselves, meaning they could eliminate all barriers to trade among themselves while pursuing certain common trade policies towards third countries. The most typical example of this is the customs union established among EU countries. Turkey also joined this customs union on 31 January 1995, in line with the provisions of the 1963 Ankara Agreement. A brief reminder for those who criticise the customs union: this was not a right but an obligation for Turkey, as some politicians at the time argued. Let us not delve into the debates of that era and prolong this discussion.
In 1995, GATT ceased to be merely an agreement and transformed into an institutional structure, taking its place on the world stage as the World Trade Organisation (WTO). In an increasingly globalised world, services emerged as a category that needed to be liberalised, alongside goods. Was this implementation successful? The answer to this question is probably ‘no.’ The fact that the latest round of negotiations dragged on for over a decade without concluding does not indicate success.
Now, let’s fast forward to the present day. How compatible do you think Trump’s new trade war, launched with high tariffs, is with the line that stretches from GATT to the WTO? Won’t the US’s approach further exacerbate the economic crises that are already being felt more and more around the world? Are the recent tensions between the US and Russia a sign that we should prepare for worse days ahead?
Naturally, we must also criticise ourselves a little.
While the US announced a 15 percent tariff on EU countries, some of our political authorities interpreted this as a development in our favour. The reason was that EU industrialists exporting to the US would prefer to use Turkey’s customs union to export to the US via Turkey. In technical terms, this led to a preference for trade diversion. However, since we were not the only ones to foresee this possibility, the Trump administration immediately removed Turkey from the category of countries subject to a 10 percent customs duty and raised it to the same rate as the EU, 15 percent.
We must hope that the trade wars do not lead to further armed conflict. In particular, the developments between the US and China appear likely to exacerbate the disorder in the coming days.
Will there be a transition from disorder to order? Will we live long enough to understand this order? Let’s end this article without darkening your mood any further.