Reports that Russia is threatening to take the United States to the World Trade Organization (WTO) over sanctions imposed because of the Ukraine crisis throws the global trade body into a more geopolitical light than we have grown accustomed to in recent times.
More commonly, the WTO is associated with what are rather wearisome disagreements between industrialised economies and their developing counterparts, as well as with the periodic crises that have afflicted the Doha round of multilateral trade negotiations which have staggered on for almost a decade and a half.
In December 2013, and much to the surprise of many, WTO members reached agreement on a small package of measures that appeared to breathe new life into the Doha round. Whatever small successes the Bali package may have brought—the jury is still out on the deal’s value and indeed whether anything substantive will materialise from the agreement—it shouldn’t detract from the wider picture. Namely that multilateral trade negotiations have consistently produced asymmetrical bargains that disproportionately favour the advanced industrial states often to the detriment of their developing, particularly least developed, counterparts.
Reform of the multilateral trading system is essential if trade is going to be a driver of substantive and more equitable development. Yet, despite its well-noted faults, a head of steam for a wholesale root and branch reform of the WTO is absent. Reform of the trade body has been occupying the minds of scholars and policymakers alike for many years. Yet few have pressed for a radical overhaul of the system, the kind that would install a governance structure that is more democratic, representative, accountable and appropriate, or which connects the way we govern trade up with the way we manage other aspects of global life.
The system is fundamentally unfit for purpose because it fails to distribute economic opportunities equitably. However, because institutions such as the WTO are treated as immovable monoliths we often resign ourselves to the impossibility of change. Continuing to negotiate trade deals that favour those who already have a great deal over those who have very little is unsustainable.
Yet because a small number of states dominate negotiations it is a situation that is not likely to end anytime soon. Developing and least developed countries are consistently frozen out of global trade negotiations because their contribution to world trade is so small they are deemed to be unworthy of a seat at the table.
What is to be done, what can governments do? We need to start by standing back and observing the problems of the WTO in a longer and wider view. We have become blinded by debates about trade and the WTO that are always waged as if the very existence of the multilateral trading system was at risk, and which are acutely and unnecessarily pressured as a consequence. We need to start by acknowledging that the system is fundamentally broken and that rounds as a form of negotiating trade openings clearly don’t work and should be abolished.
The blame game needs to stop too. Pursuing questions of who really is to blame does little more than ensure future negotiations flounder—even if the villains are clearly obvious and their actions reprehensible. In truth we are all to blame.
Crucially, we need to change the way we think and talk about trade, we need to get away from the language of confrontation. We need also to disavow ourselves of the idea that trade can be separated from other areas of economic and social life.
A good starting point would be a new declaration of aims and objectives drawn from a wholesale reflection of what it is that we all agree our global economic (and other) institutions should do, how they should do it, and what their purposes ought to be. We need a WTO that is organised differently and which adopts a different mechanism for generating commercial opportunities for all.
One way to chart a new course would be to convene a global conference designed to reorient the WTO around a ‘development for all’ agenda that moves away fundamentally from competitive negotiating as a vehicle for growth and development. Such a conference has the capacity to be both vast and out of control, but it shouldn’t be beyond our capability to ensure it isn’t.
Whatever we decide, we need to start rolling the reform ball as soon as possible. Otherwise, the WTO and Doha round will continue to stutter along in a business-as-usual fashion. The gap between those that have, and those that do not, will continue to grow. And what global trade governance we actually have will be confined to further irrelevance.