US suspends payment to WTO, where is plan B?

World Trade Organization (WTO) is a member funded entity where contributions are paid into its annual budget on the basis of total trade transacted individually by the 166 member nations. For the year 2003 its budget was Swiss Franc 205 Million.

Succeeding the General Agreement on Tariffs & Trade in 1995, WTO is tasked with the following trade related duties:

(1) Set and enforce rules for international trade

(2) Provide a forum for negotiating and monitoring further trade liberalization

(3) Resolve trade disputes

(4) Increase the transparency of its decision-making processes

(5) Co-operate with other international economics entities in concerned areas.

From stats available at the time of writing the highest percentage of contribution at by USA at 11.67% makes it the largest contributor. China follows at close step with 10.76%. Germany perched at 3^rd with 7.19%. I have worked on the figures available with WTO web page for the tear 2023 and derived the following observations:

1. Although China paid 10.76% the part contributed by Hong Kong of 2.81% and Macao by 0.11% add up to 13.68% of the total contribution to WTO Budget for the year 2023.

2. The European Union consisting of 27 member countries paid a whopping 31.05%.

3. Leaving Hong Kong and Macao out, the five founder members of BRICS group i.e. Brazil, Russia, India, China & South Africa paid 16.36% of the budget

4. New BRICS members Egypt, Indonesia and UAE together paid 2.56%

5. Seven partner countries approved by BRICS to become full members in due course put in yet another chunk of 2.73%. These countries include: Bolivia, Kazakhstan, Cuba, Malaysia, Thailand, Uganda and Nigeria

6. Put together BRICS as a group accounted for a walloping 21.65% a figure that is more than one-fifth of the WTO budget for 2003  closer to the EU and more than the double of US contribution.

According to latest news America has suspended the payment due for 2004 that must be paid at the beginning of 2005.  WTO officials are still searching for a way out of the current quandary. They declare that they have the Plan B, if US suspension becomes a permanent one.

As a business strategist navigating amid geoeconomics, I tend to see a solution to the quagmire from the point of view of EU-BRICS co-operation. May be the Plan B? Now that the WTO headwaiters is situated in Geneva this can be easily done.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

Iran – Russia Treaty upstages Article 51 of U N Charter

Just 3 days before Trump inauguration, Russian President Putin and his Iranian counterpart inked “The Iranian–Russian Treaty on Comprehensive Strategic Partnership” in Moscow. Critics rushed to dismiss it as just another agreement devoid of any mutual defence relationship. None understood the business strategy behind it.

Comparison was made between the earlier one signed between Putin and Kim Jong Un in Pyongyang on June 18, 2024 which was all purposes a mutual defence and security treaty between North Korea and Russia. The absence of any definitive clause in the Iran-Russia strategic partnership was cited as proof that this is purely a commercial agreement.

True enough, subjects of geoeconomics interest such as energy, transport, regional development, bilateral relationship and host of others were alluded to in the body of the agreement. Missing words & phrases implying defence, security and mutual assistance in military affairs are self-evident. Put it in perspective the pact does not constitute formally as a military alliance and requires no direct obligations from either party in the event of conflict.

Just savour this:

Article 3. In the event that either Contracting Party is subject to aggression, the other Contracting Party shall not provide any military or other assistance to the aggressor which would contribute to the continued aggression, and shall help to ensure that the differences that have arisen are settled on the basis of the United Nations Charter and other applicable rules of international law.

But the devil is in the details. Two clauses of the treaty show the slip. Here we go:

Article 12: The Contracting Parties shall facilitate bolstering of peace and security in the Caspian region, Central Asia, Transcaucasia, and the Middle East, cooperate to prevent interference in the specified regions and destabilizing presence of the third states there, and exchange opinions on the situation in other regions of the world. Plain stuff.

Now let us look at the catch in the Article 47 of Iran–Russia treaty which alludes thus:  “By mutual written agreement of the Contracting Parties, this Treaty may be amended and supplemented. Such amendments and supplements shall form an integral part of this Treaty and enter into force in accordance with its Article”.

Then comes the statement by the permanent representative of Iran in the U N:

Iran's military action against Israel was based on Article 51 of the UN Charter regarding the legitimate right to self-defence and in response to the deadly Israeli attack against the Iranian consulate in Syria. Russia accepted & supported his position.

Here is the Article 51 of the U N Charter:

“Nothing in the present Charter shall impair the inherent right of individual or collective self-defence if an armed attack occurs against a Member of the United Nations, until the Security Council has taken measures necessary to maintain international peace and security”.

Russia and Iran understand how to navigate business strategy. Without calling the pact plainly as mutual defence one they have come roundabout way to imply as such.

No wonder despite all those blusters “bomb bomb bomb Iran” the old beach boy’s song rhymed by the late Senator John McCain still remains in the chart only.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

Russia transforms her geoeconomics

Sir Winston Churchill made this pithy statement: “Russia as never as strong as she looks nor as weak as seems”. Known for his wit, wisdom & eloquence Churchill hit the nail on the head. But Russia is transforming a lot, of late in the area of geoeconomics thanks to NATO. Here is my survey:

The Soviet legacy stays put. It is because Russia realized her dream as a super power not under the rule of Czars, but under the yolk of Stalin. He made the production base and military industrial complex that raised her to level with USA in terms of domestic economics to some extent and in the prowess of military to a great extent.

Under Putin led autocracy, Russia is blossoming into a novel geoeconomics power house: self-sufficient in every aspect of domestic life with a trading base widely spread across the nation having the largest land mass of the world, Arctic included. The alchemy is surprisingly not export led growth but domestic demand led growth.

Exports would continue to be there but the dependency over fuel & energy often belittled in the West as “gas station economy” would be a thing of the past. Opting out of supply of gas to Europe is the prime goal with a concomitant factor of pushing Europe being a dependency of America in liquefied gas and other energy sources. Put it in other way, the era of cheap gas that catapulted European industrial base would cease to exist.

Does that mean Russia is going to be ensnared in the consumer economy? Not at all. One lesson learned in the proxy war by the West in Ukraine is never to get entrapped in “consumerism” that led to the decay of democracy and the birth of a neo-liberal cabal who runs the world from Brussels & New York not to forget perennial London.

Therefore, domestic economy would not be equated to consumer economy. A holistic set-up would be built such that every Russian has the means to live a comfortable life in a triangle where food, energy and social security would occupy the three prongs.

Now comes the big blow, briefly enumerated below:

1. Cosy relationship with BRICS nation is the sine-quo-non. Putin understands that the rule based international order (RBIO) is on the way out and to be  replaced by law based international order (LBIO) where equality amongst members is sacrosanct and progress peters down to every nook & cranny of the global south.

2. Bilateral, trilateral and multilateral relationship to be forged in a step-by-step process. For example, Russia-China bilateral, Russia-China- Iran   as well as Russia-China-India trilateral co-operation would be taken forward along with BRICS initiated multi-laterals.

3. Corridor mania arises in geoeconomics.

a) A key element is the Arctic Road which is the newest corridor for ferrying passengers and carrying cargo across the northern sea.

b) Secondly, Central Asia–Western Europe corridor that covers almost the entire Eurasian land mass dubbed as “The Middle Corridor” & “Trans-Caspian International Transport Route”.

c) Thirdly, North-South corridor also called as “The International North–South Transport Corridor”, a 4,500 mile long multi-modal network consisting of ship, rail, and road routes.

Once all these elements are put in place and start functioning Russia gets elevated to the level previously occupied by the British Empire in geoeconomics power play.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist