Negotiating Strategies
A Grand Bargain to Revive the WTO Amrita Narlikar
T
hat the World Trade Organization (WTO) is beset with challenges has been evident for some time. The Doha Development Agenda (DDA) — the first round of trade negotiations, following eight successful trade rounds under the General Agreement on Tariffs and Trade (GATT) — was launched with high hopes in 2001 and a promise of completion by 2005. The DDA was the round that was supposed to finally address the development concerns voiced by the Global South and bring some wins to developed countries. But almost 20 years of persistent delay and recurrent deadlock have led the round to its unmarked grave.
More recently, US President Donald Trump’s supposedly “good, and easy to win” trade wars1 — exactly the kind of unilateral behaviour that the system of multilateral trade rules had been designed to curb — have further eroded the WTO’s credibility. The damage is worsened by the fact that these unilateral actions stem from the world’s largest economy, which had served as the guardian of the system. The transparency function of the WTO is also not in the rudest of health: members are often remiss in fulfilling notification requirements, and the monitoring function of the Trade Policy Review Mechanism is also handicapped in a variety of ways (for example, on the reporting of subsidies). The organization further finds its Dispute Settlement Mechanism (DSM) paralyzed. The DSM — once regarded as the pride and joy of the WTO — has ceased to function since December 2019, most immediately because the United States has refused to back down on its decision to block the appointment or reappointment of members of the Appellate Body. With its three core functions — negotiation, transparency and dispute settlement — facing an unprecedented set of serious problems, the WTO is clearly in crisis. And while it is easy to blame the Trump administration for the current miseries of the organization, the problems of the WTO run deeper and predate Trump’s arrival on the scene. Were the organization to cease to function, the costs would be high for the system as a whole. After all, the WTO has provided reliable and enforceable rules for international trade, which in turn has served as an engine for growth and development and helped lift millions out of poverty. Saving the system matters, especially if one is concerned for the well-being of not only the global poor, but also the poor in rich countries.2 However, given the high levels of dissatisfaction with the current multilateral trading system, merely resuscitating the WTO is not enough: it is in urgent need of reform and updating.
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