The irony is that Trump launched his attacks on the body just as it began to show signs of revivalby David Tinline / October 3, 2019 / Leave a comment
Multilateral institutions often seem ill matched to the challenges they are supposed to address. Some would argue that the World Trade Organisation is a prime example of this problem, citing the prolonged deadlock in global trade negotiations among other issues.
No doubt the WTO does have real shortcomings but it continues to play an important role. This was demonstrated during the 2008 financial crisis when the WTO did its job and forestalled a damaging rush to protectionism. More recently, and mostly below the radar, the organisation has been quietly making significant progress in tackling some of its longstanding problems—delivering small but significant new agreements and taking important steps towards modernisation. One consequence of the current crisis in global trade, rising US-China tensions, and President Trump’s direct threats to the WTO is that we could undercut this progress, damaging the organisation just as it is showing signs of revival.
Turn the clock back to autumn 2013. The Doha Round of negotiations aimed at delivering ambitious reforms of the WTO was already 12 years old and was going nowhere. Talks had broken down. Out of frustration, many governments were instead pouring their energies into regional and bilateral trade deals. In the innocent world of 2013, this was considered a major crisis for the global trading system. The WTO ministerial conference in Bali in December that year was seen as make or break. The then EU trade commissioner Karel De Gucht summed up the mood, saying that “it is the fate of the entire WTO that is at stake.”
In the event, Bali was a success. WTO members struck the first major multilateral agreement in two decades—the Trade Facilitation Agreement. Then, like the proverbial buses, Bali was followed by other successful deals at the next ministerial conference in Nairobi in 2015.
These breakthroughs were reached despite huge divisions among WTO members. Decisions at the WTO require consensus, which effectively means that all 164 members have their own veto. This ensures that no one is bounced into doing something that they don’t want to do. However, the implicit threat of a veto can also be used as leverage to advance your own pet issue—a tactic known as hostage taking. In Bali, India and Cuba both threatened to use…