The World Trade Organisation plays a vital role in ensuring fairness and transparency in global trade. Five decades ago, the world began to value economic interdependence with the belief that it would deter security confrontations. WTO was created with the intention of “policing” this interdependence.
Today, in a world dominated by geo-economic considerations and securitization of international economic reforms, unilateralism especially by developed countries is on the rise. Economic policies such as industrial subsidies and local content requirements have made a comeback. There are deliberate efforts to weaken trade multilateralism.
The World Trade Organisation needs to be reformed in order to prevent power from replacing rules in global trade relations. The Special and Deferential Treatment (SDT) gives special rights to developing countries and obligate developed countries to treat them more favourably. However, only 21 percent of SDT provisions in various WTO agreements oblige developed countries to provide favourable treatment. The Appellate Body, that it the WTO's dispute resolution body, remains paralyzed since 2019. This is mainly because of the US's lack of concern, and slowness of the consensus based decision making within the WTO.
There is a shift towards plurilateral discussions on select issues such as investment facilitation. Although member countries are required to notify all their laws and regulations that effect trade, compliance has been lacking.
G20 nations are interested in reforming the WTO for the better. These countries need to either persuade the US to change it’s position or bring to light the Appellate Body without the US.
In order to affect lasting changes, WTO's foundational principles, as embodied in the Marrakesh Agreement, need to be reaffirmed. The governance framework should include key principles of non-discrimination, transparency and inclusivity. Creating a fully functional dispute settlement system should be a top priority. More importantly, WTO members need to do more to expand the role of trade as a tool to create jobs, reduce poverty and increase economic opportunities.
