Reform the WTO for a post-coronavirus world. The global economy needs a champion to lead it out of the crisis

Collapsing trade must be rebuilt to spur recovery. The WTO can work on addressing trade restrictions on key supplies in the short term, and lead discussions to lower tariffs and facilitate e-commerce and agricultural trade in the long term

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Gantry cranes stand idle at APM Terminals in Elizabeth, New Jersey, US, on May 11. The lockdowns and travel restrictions put in place to contain the coronavirus pandemic have hammered the world economy. Photo: AP

Published: 1:00am, 14 May 2020Updated: 6:32am, 14 May 2020

In 1941, at the height of World War II, Winston Churchill and Franklin D. Roosevelt met secretly in a desolate bay off Newfoundland. Over the next four days, they thrashed out what would become one of the most important documents of the 20th century: the Atlantic Charter. It laid out principles for the post-war order, key among which were economic cooperation and a trading system open to all.

Even as war raged, there was good reason to worry about the role of trade in the peace that would follow. A decade before, the Great Depression had seen a vicious spiral of protectionism, economic hardship and nationalism wipe out two-thirds of world trade and sow the seeds of war. By contrast, after 1945, collective arrangements that grew out of the Atlantic Charter fed a virtuous cycle of openness, trade, prosperity and stability.

Scholars now see international trade as a key contrast between interwar instability and post-war recovery. Trade was also crucial after the 2008 financial crisis, enabling countries to feed off each other’s growth and offsetting fiscal and financial pressures.

History shows that trade can support recovery from the global calamity we are living through – it will help balance global supply and demand, and fuel long-term growth. The steps we take to limit or liberalise trade can profoundly affect our course out of the coronavirus crisis.

Frozen beef filets from Australia, the US and Canada are seen on sale at a supermarket in Beijing in May 2019. China has suspended imports of beef from four Australian producers following a threat by Beijing of possible trade retaliation if Australia pushed for an inquiry into the origins of the coronavirus pandemic. Photo: AP

There is a steep hill to climb. Trade has cratered as factories and borders close while demand and trade financing shrink. The World Trade Organisation expects global trade to drop by between 13 per cent and 32 per cent in 2020. The latter decline is on par with that seen in the first three years of the Great Depression.