SPECIAL REPORT: Political Warfare, China, and the World Trade Organization

By Greg Rushford
November 9, 2021

Add the World Trade Organization to the list of international organizations where one doesn’t have to look far to glimpse China’s so-called Wolf Warrior diplomacy in action. One way or another, fellow WTO members including the Philippines, Indonesia, Ecuador, Australia, Malaysia, Indonesia, Lithuania, even Hong Kong and of course Taiwan — plus too many other Indo-Pacific, African and Latin American WTO member countries to name in one line— have been on the receiving end of Beijing’s geopolitical influence operations.

Cordell Hull, who served as Franklin D. Roosevelt’s secretary of state from 1933-44, saw firsthand how ultra-nationalistic trade wars fueled animosities that contributed to the loss of millions of lives during World War II. Today, Hull’s vision of working for peace by dismantling trade barriers still resonates amongst enlightened diplomats and international civil servants who toil inside the WTO’s Swiss headquarters, perched along the shores of Lake Geneva. Outside the building, though, in the capital cities of the WTO’s 164 member countries, it’s often a different story. Especially in Beijing.

If President Xi Jinping appreciates Hull’s wisdom, the General Secretary of the Communist Party of China certainly hasn’t shown it. What Xi has shown is a disdain for international law and, when push comes to shove, the institutions created by the western democracies that stand for respect for the rule of law.

Xi is responsible for those massive Chinese industrial fleets that have been illegally devastating fellow WTO member countries’ fishing grounds. It is Xi’s fishing fleets that have repeatedly been caught using slave labor. But inside the WTO’s negotiating rooms, it is often difficult to find smaller, intimidated WTO members who would risk upsetting the Wolf Warriors by speaking clearly about China’s pillaging of the high seas.

Nor — unsurprisingly, considering how the Chinese Communist Party has humbled the once-proud Hong Kong — has Xi spent any energies to use the WTO’s trade-liberalizing agenda to ease tensions with Taiwan, a fellow WTO member which mainland authorities consider a breakaway province. Instead of giving the (democratic) Taiwanese reason to trust that they can rely upon closer trade ties to co-exist peaceably with the (undemocratic) mainland, Xi has instead used the WTO to wage political warfare against Chinese Taipei.

Toward that end, China has bullied other WTO members like Lithuania, which have sought to expand trade ties with Taiwan. Lithuania recently moved to establish a Taiwanese trade office in Vilnius. Beijing reacted furiously, cutting off rail service and recalling the Chinese ambassador in Vilnius — signaling to the European Union’s 27 member countries that the Wolf Warriors are watching their trade routes.

Hong Kong learns to kowtow

The Chinese Wolf Warriors have even persuaded Hong Kong — which, before the mainland’s crackdown on its political autonomy, proudly behaved as the independent WTO member it is supposed to be — to help Xi implement one of his influence operations targeting Taiwan.

Taiwan and Hong Kong have each joined the WTO’s Government Procurement Agreement. The GPA’s 48-member countries have opened their lucrative government contracts to international competitive bidders. These are basically the more economically enlightened WTO members: the European Union, the United States, Australia, New Zealand, Canada, and so on. China has asked to join the GPA since 2002, but has never summoned the political will to meet the market-oriented admission requirements.

This summer, Taiwan nominated a woman to chair the GPA who enjoyed a sterling economic reputation — in everyone’s eyes except those of the Communist Party of China, it turned out. Accordingly, when the WTO’s general council met this July, Hong Kong vetoed the Taiwanese candidate.

Having a Taiwanese chairwoman would “not be conducive to advancing [the GPA’s] various work programmes… and accession of new GPA Parties,” a Hong Kong diplomat declared. Translation: China, which has never met the requirements to join the GPA, had found a way to exercise a veto over who should chair the committee that runs it.

There’s more. Last month, Reuters reported that Australians were puzzled why Hong Kong considered Aussie lobsters a threat to China’s national security. China — as part of its trade war to punish Australia for suggesting that the Chinese open their records on the origins of the Covid-19 virus — has launched a trade war against lobsters from Down Under. Unsurprisingly, considering the usual unintended consequences of economically indefensible trade wars, a lot of the crustaceans have turned up in Hong Kong. Seems some have been smuggled across the mainland Chinese border to be enjoyed by Chinese people.

Hong Kong’s new customs commissioner, Louise Ho, told reporters that cracking down on smuggling of Australian lobsters from Hong Kong to the Chinese mainland was an “important part of protecting national security.” The smuggling activities, she explained with a straight face, “undermine our country’s trade restrictions against Australia.”

Lobsters are just one component of trade-distorting activities that have been keeping mainland Wolf Warriors busy on the high seas.

The eyes of the watching world

In less than three weeks, the WTO will hold ministerial-level meetings in Geneva. At the top of the agenda: a forceful push by the WTO’s energetic new director general, Ngozi Okonjo-Iweala, to successfully conclude the WTO’s longstanding negotiations aimed at bringing economic discipline to save the world’s threatened fishing grounds. Global fish stocks are being depleted by overfishing, thanks to more than $20 billion in annual harmful governmental subsidies that encourage such.

These negotiations have been languishing for two decades, with nothing to show for them, thus casting a — pardon a bad pun — a rotting-fish smell to the notion the WTO can finish anything important anymore. Of the $20-plus billion lavished annually on the world’s most harmful fishing subsidies, China counts for some $6 billion. Japan and Europe come in next, with about $2 billion each. India has only $174 million in the smelly subsidies — although the Indians are demanding to be given special exemptions as a poor country to continue subsidizing their fishers for the next quarter century.

Ambassador Santiago Wills, a rising young diplomatic star from Colombia, heads the WTO rules committee that is pressing to wrap up the fish talks. Born in 1986, Wills was a teenager when the negotiations began. Other talented WTO fish negotiators who also tried their best have long since retired.

Dr. Ngozi, as the WTO leader is often called by her colleagues, rightly told the WTO’s fish negotiating group this week that “the eyes of the world are really on us.”

The World’s Coast Guards Eyes

While the WTO negotiations drag on, the world’s Coast Guards have been quietly on the move. It is the Coast Guards which are vested with the necessary law enforcement responsibilities to police threatened fishing grounds — definitely including the Exclusive Economic Zones of WTO member countries where China’s huge industrial factory ships have no right to exploit.

This April, the U.S. Coast Guard “released a new strategy to enhance maritime security and the rule of law by combatting illegal, unreported and unregulated (IUU) fishing particularly in the Pacific,”the authoritative Maritime Executive reported.

The Wall Street Journal has also published a well-researched recent report that the U.S. Coast Guard has been working with Pacific island nations such as Palau to seize “tens of thousands of dollars worth of sea cucumber” that had allegedly been harvested by the Chinese. Chinese fishing fleets, WSJ reporters Lucy Craymer and Ben Kesling noted, had also “shown up in force around island nations like the Republic of Kiribati and Tuvalu, which have some of the richest tuna fisheries in the world.” The U.S. Coast Guard has also begun to work more closely with traditional American allies like the Philippines; hundreds of Chinese fishing vessels have been plundering Philippine waters for years.

Other recent headlines point to similar law enforcement actions being undertaken by a variety of countries with important Indo-Pacific interests: including Australia, New Zealand, Japan, New Zealand, Canada, and Fiji.

In Latin America, Ecuador has complained about hundreds of intrusive, illegal Chinese factory boats that threaten the fishing stocks in the Galapagos Marine Reserve. The Ecuadorians are moving to rally other Latin American neighbors to protect the reserve.

While all numbers regarding threatened global fish stocks are by nature imprecise, a 2018 report published by UNCTAD — the United Nations Conference on Trade and Development — estimated that perhaps 90 percent of global fish stocks are “now fully exploited, overexploited, or depleted.” Peter Thompson, a veteran diplomat from Fiji who is now the UN’s special envoy for the ocean, co-authored that report. Thompson summed up the sense of present urgency succinctly in an online conference convened by the World Economic Forum this July: “We have to end this madness.”

Toward ending the “madness”

All WTO trade-liberalizing negotiations are hard. As the current fish talks loom toward their hoped-for conclusion when WTO ministers forthcoming December meetings, many difficult issues remain to be resolved.

This summer, Ambassador Wills released the WTO’s first-ever public draft of what a successful fish agreement would look like. The sharp-eyed Peter Ungphakorn, a Geneva-based journalist and a former WTO official, noted that the draft contained “84 pairs of square brackets in only eight pages.” Each bracket denotes an issue where no agreement has been reached. Yesterday, Wills released the current working draft, which had 91 brackets. Of course, as Ungphakorn explains, the number of brackets doesn’t necessarily mean that all of them are going to be intractable. Such complex negotiations, as only insiders really know, can turn on only one or two really politically entrenched positions.

In fish, besides India’s insistent demands to be allowed to keep its fishing subsidies going for another 25 years, Spain has to date been adamant that it needs to be allowed to continue its fuel subsidies that enable Spanish fishing fleets to sail to distant waters.

Meanwhile, China, the world’s second-largest economy, a country with a space program, ballistic missiles, and nuclear submarines, has been demanding to be given special exemptions to continue some subsidies — claiming implausibly that China is still a poor, developing country. Inside the negotiating rooms, nobody’s laughing out loud. Many of China’s fellow WTO members —Pakistan, to cite just one supporter of China’s negotiating positions — face difficult financing issues with China’s Belt and Road infrastructure. So they play along with the Wolf Warriors.

Devastating African Fishing Grounds

A July 13, 2021 authoritative report by the UK-based Environmental Justice Foundation highlighted Ghana to illustrate how the Chinese typically operate in West African waters: “A particularly destructive form of illegal fishing in Ghana is known as saiko, where industrial trawlers illegally target small pelagic fish, the staple catch of small-scale canoe fishers, and sell this catch back to coastal communities for profit.”

Some 90 percent of Ghana’s fishing fleet is “linked to Chinese ownership,” the EJF report added. “Ghana’s fisheries are at the point of collapse…Ghanaian authorities need to act urgently,” urged Steve Trent, the foundation’s CEO.

But if there is such a sense, this reporter has been unable to unearth it. Repeated e-mails earlier this year to the West African’s trade office in Geneva went unanswered. It was much the same when I reached out to trade officials in other West African WTO members.

A 2019 press release posted on the website of the Chinese embassy in Ghana perhaps illuminates the reticence. That December, Ghana’s president, Nana Akufo-Addo, “thanked China” for helping the construction of a $50 million Jamestown Fishing Port Complex, near Accra. The Chinese dredging and construction deal, estimated to be completed by 2023, was struck during President Akufo-Addo’s 2019 state visit to China. According to a March, 2021 report by Xinhua, the CRCC Harbour and Channel Engineering Bureau Group, a Chinese marine engineering company, has now completed some 20 percent of the construction.

It’s About the Geopolitics

There are encouraging hints that the WTO will successfully negotiate a fish deal in Geneva next month. Several well-connected diplomatic insiders say they believe that the Chinese negotiating position is more nuanced than it appears to outside observers. Beijing will, at the last hour, play a constructive role in wrapping up a deal, some insiders believe.

These observers believe that Xi is aware of the many reports that his Wolf Warrior diplomacy is making China increasingly disliked in the WTO. The Chinese are already celebrating the 20th anniversary of China’s accession to the WTO — and don’t want to ruin a good party by helping kill the fish negotiations, also in their 20th year, according to this view.

Still, it’s worth noting that when China became a WTO member in 2001, China had begun to occupy the South China Sea in the mid-1990s. For instance, Mischief Reef, an atoll in Philippine waters, had already been seized in 1995. In October 1998, Philippine Air Force reconnaissance planes took photos of Chinese warships tied alongside a dock on Mischief Reef, which Beijing had already started to weaponize.

There was a helicopter pad, gun turrets and sophisticated communications equipment on the once-deserted atoll more than 1,600 kilometers from the Chinese mainland. Chinese diplomats claimed that the construction was only to help its fishing fleets. This was the beginnings of a deep-water armada envisioned by Chinese Gemnral Liu Huqaing, a veteran of the Long March who envisioned that a strong, blue-water navy was “supremely important” to Chinese ‘Honour.” Today, Mischief Reef has an 8,675 foot runway, protected by anti-aircraft Chinese weapons, plus a missile-defense system.

Elsewhere in the Pacific, by 1998 the Chinese had built a satellite tracking station on Tarawa, to keep their eyes on America’s Kwajaein Missile Range, 800 kilometers to the north in the Marshall Islands. Beijing was also building new destroyers, frigates and nuclear submarines to complement naval equipment purchased from the cash-strapped Russians.

There is no doubt: China’s maritime strategy to seize- and weaponize the South China Sea was already clear when the WTO’s fish negotiations began two decades ago — and years before a tribunal in The Hague determined it was in violation of international law.

Even as the WTO’s trade ministers prepare for December’s fish negotiations, in recent weeks hundreds of Chinese fishing vessels have again shown up in the Exclusive Economic Zones owned by the Philippines, Indonesia, Malaysia, and Vietnam.

Xi and his Wolf Warriors might reflect upon a suggestion floated in Foreign Policy magazine by two influential figures on the Atlantic Council, Franklin Kramer and Hans Binnendijk. NATO, they wrote, “should form a new partnership with willing Asian partners negatively impacted by China.” Whatever NATO does, China has to worry about other similar security arrangements across the Pacific that are being made, as the WTO fish talks continue in Geneva.

Cordell Hull would understand where all this is headed.