Macroscope | Turning 20 marks time for the WTO to grow up
The WTO needs to move away from the “them and us” focus of many of its rules. The virtual economy, investment and perhaps competition policy are just some of the issues that could receive closer attention
Many would be tempted to say that the World Trade Organisation can only mark, not celebrate, its 20th anniversary this year. Shot negotiating deadlines, dashed hopes and endless reiterations of entrenched positions have punctuated the WTO’s two decades of existence with a tedium that has tried even the institution’s strongest supporters.
A succession of anni horribiles has pundits wondering “if” the WTO’s multilateral goals can be reached, rather than “when”. Yet no government, or serious commentator for that matter, has suggested that a moribund WTO is an acceptable new normal.
The gap between words and deeds has persisted for far too long. One can only hope that repeated assertions of fealty to a system based on universality and inclusiveness is stubborn, if frustrated, realism and not a cynical game of blame and responsibility avoidance.
Unlike trade liberalisation, global rule-making cannot be achieved outside a multilateral setting
But to deny the WTO a record of achievement is much too harsh a judgment. For years the institution has tried to sell itself on erroneous grounds instead of playing to its strengths.
The greatest achievement of the WTO is not trade liberalisation. That record is restricted largely to a coordinating role in reducing tariffs on manufactured goods among industrial countries over several decades after the second world war.
Limited progress has been made in agriculture and services. And the WTO is not the chosen venue for developing and emerging economies to liberalise. The considerable degree of trade openness embraced by these countries in recent decades is understated and uncommitted in the WTO.
If 2015 is not going to add to the musty sense of WTO decline, progress is needed on at least three fronts.
First, while not excluding itself from trade liberalisation, the WTO should acknowledge more honestly its limitations in that field. It needs to focus more on making and enforcing rules, where it has been far more successful. Moreover, it is there where the WTO can make its unique contribution as a multilateral institution. Unlike trade liberalisation, global rule-making cannot be achieved outside a multilateral setting.