The WTO Fights To Remain Relevant

The World Trade Organization is struggling to settle international tensions.

Free trade has been a force for good over the past few decades, but international commerce without rules will be an unmitigated disaster. Members of the World Trade Organization (WTO) recognize this. Yet, they are unable to agree on reforms that would enable the WTO to deal with modern-day challenges.

Attempts to revive the body met a dead end again at the 13th ministerial conference of the WTO this month. Serious divisions remain among the 166-member body. Brinksmanship over aid for farmers and fishing subsidies remained the biggest hurdles in progress on a broader agenda. Subsidy disputes and countervailing duty investigations at the WTO have increased steadily over the past decade and a half. Yet, the main functions of the world trade body—negotiation and dispute settlement—have been paralyzed since 2019. Appeals cannot be heard and disputes are left in limbo as the WTO’s appellate body lacks adequate members to adjudicate trade grievances. China, which benefitted the most from the WTO, also stands to gain from its decline as Beijing seeks to reshape trade terms with developing nations through its own trade deals.

Last week’s conference, however, delivered an extension of the moratorium on customs duty on e-commerce by two years. The development is significant, considering that about 25% of all global trade is now conducted digitally and is expected to continue rising.

FRAGMENTATION IS THREATENING THE WTO’S RELEVANCE.

Annual Fisheries Subsidies