Trejos discusses inequalities of trade
Former Minister of Foreign Trade of Costa Rica Alberto Trejos presented a lecture about the World Trade Organization (WTO) last Friday at Hamburg Hall.
According to a university press release, Trejos “was Costa Rica’s lead negotiator at the WTO and negotiated Costa Rica’s membership in the Central America Free Trade Agreement.”
Drawing on his knowledge of the international trade, Trejos provided an innovative take on the issues facing the WTO and potential solutions to these problems. Instead of providing a classically American vantage point of the WTO, Trejos spoke from the perspective of Costa Rica, a financially weaker nation.
Because Costa Rica’s financial standing does not approach that of the European Union or the U.S., Trejos noted, his nation was different from “successful countries in trade who do nothing where international negotiations are important to their strategy.”
Trejos claimed that larger nations are able to bully smaller countries by offering deals that may help smaller nations in some minor ways, but are far from preferable.
By using such tactics, he said, larger countries are able to pressure smaller nations into accepting deals that they may not completely agree with, but are often forced to accept due to their low financial status.
Speaking of Costa Rica, Trejos said, “We cannot push control or lobby.... For us, negotiations are very important.”
He stated that a major issue in the WTO is that high barriers, such as tariffs, are being used in order to negatively affect smaller countries. He felt that barriers should be kept low for exchange with other countries, because “nations want to play by the same rules.” Trejos also stated that the lack of organization in the WTO led to difficulty in trading relations between countries. In order to fix this issue, the former Minister of Foreign Trade proposed a more organized system with clearer laws for trade.
Matt Moses, an information security policy management Ph.D. student, was interested by the alternative system proposed, remarking that the lecture made him “think a lot about mechanism design [and] unanimity. It was refreshing to see someone like him.”
Trejos disapproved of how trading rounds used by nations are confronted with an all-or-nothing approach, so that nations are forced to make concessions. The problem with this system, he explained, is unanimity — with more than 100 parties being involved in trade talks, it is difficult to make progress by having all of the parties in agreement.
Instead, he said nations pretend they’re moving forward in trade discussions, when in reality, an agreement among nations has not been reached since 2003, almost a decade ago.
Trejos feels rules that were created 20 years ago haven’t been changed, and countries are now exhausting money, effort, and time into bilateral agreements when they should focus on the larger picture by agreeing to multilateral agreements and reforming previous rules. With international powers like the U.S. and the European Union dominating over smaller nations like Costa Rica, Trejos claimed that smaller countries have “unfairly been put into a corner” in recent negotiations and that these larger nations should not be allowed to exploit others.
An example he provided described a wealthy individual who is only willing to pay $6 for a task to another individual who wanted $10 for its completion. Although $6 is not the amount that the other person desired, he would have to accept it instead of being stuck with no payment at all. Analogous to the bullying of weaker nations, Trejos felt that this practice should be ended.
Students who attended the talk enjoyed the alternative perspective that Trejos provided on international issues.
Umer Humayun, a first-year public policy and management master’s student, agreed, “It was great. Hearing different point of views from other countries was really interesting — not just from the United States, but also countries like Costa Rica.”