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WTO: An Optimistic Pre-Mortem In Hopes Of Resurrection

Interesting perspectives by DMITRY GROZOUBINSKI, The Lowy Institute ahead of WTO elections and at a critical time for the revitalisation of this key organisation:

At a time when stability and predictability are needed most, the body at the heart of the rules-based trading system — the World Trade Organization — is reeling from far more than just a paralysed Appellate Body and antagonistic Trump administration.


  • In the midst of a pandemic and escalating global protectionism, the WTO's paralysed dispute settlement system, largely immobilised negotiations, and chronically underutilised monitoring and compliance function, are groaning under the weight of trade tensions, unilateralism, and neglect.

  • Technical work in Geneva is part of the solution, but is insufficient on its own to resolve the Organization’s short- and long-term problems.

  • Political leaders who still believe in the wisdom of predictable, rules-based trade must build coalitions to expand that structure, while forcing the difficult conversations about what a WTO acceptable to the major powers looks like, and investing in the painstaking rebuilding of business and civil society engagement with trade policy.


For decades, multilateral trade rules operated to keep government protectionist impulses in check. They provided a foundation of openness for international commerce, as well as a framework for liberalisation and integration. With the trade rules as a guarantor, capital and value chains spread across the globe.

The creation of the World Trade Organization (WTO) in 1995 saw these rules reinforced with a feature that is nigh unheard-of in international law: binding and non-optional dispute settlement. For the first time, an international panel of legal experts would have the final say on the legality of trade measures, whether those implementing them liked it or not. On 10 December 2019, a procedural blockade by the world’s largest economy, the United States, culminated in that 24-year experiment being put on hold, perhaps permanently.

The loss of the WTO’s Appellate Body does not mean the global trading system is in anarchy, but it does move it a significant step closer to unilateralism and transactionalism in trade policy. Moreover, the Appellate Body crisis is just one of the areas where the WTO is bleeding, and the WTO is just one symptom of a global trading system besieged.   

Policymakers looking to restore predictability and order must grapple with a WTO that has struggled to negotiate new rules and enforce and monitor existing ones; which civil society distrusts; and on which business has largely given up as a source of solutions. The global consensus, based on the underlying wisdom of sacrificing some sovereign policy space to allow predictable, rules-based trade, has never been weaker. There are no easy answers, but one thing is certain: technocratic fixes from Geneva and ministerial press releases bereft of specifics will not be enough. 

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