Among World Trade Organization (WTO) summits, the 1999 meeting in Seattle was the most memorable. Delegates were met by an estimated 50,000 protesters, an episode sometimes referred to as the Battle of Seattle. Central to the demonstrations was antipathy towards trade and globalization.
Twenty-three years later, WTO meetings continue to attract protests. When global trade ministers met in Geneva this week, they got a familiar reception; the sentiment against the prevailing international trading system has only grown stronger in recent years. But what’s more worrying is that the WTO has become more divided from within, failing to find consensus on major issues. Without strong governance, global trade has become chaotic.
The 12th WTO Ministerial Conference in Geneva this week made some progress on small issues, but none on bigger issues. The delegates reached minor agreements on fishing subsidies, e-commerce tariffs and COVID-19 vaccines. But long-standing issues pertaining to agriculture subsidies, food security and protection of intellectual property rights remain unresolved.
The WTO’s struggle stems from its structure. Any major decision requires a consensus of all 164 members. In an increasingly polarized world, getting all nations to agree on a solution is a herculean task. The WTO’s appellate body no longer has enough members to adjudicate trade grievances, as the U.S. continues to block the appointment of new judges. The dispute settlement system has de facto regressed to the period of the General Agreement on Tariffs and Trade, when panel reports were easily blocked.
The goods trade barometer has dropped below the baseline value of 100, indicating weakness in global trade.
The WTO has failed to adapt to evolving economic realities. Industrial subsidies and forced technology transfer have not been effectively addressed. China, in particular, continues to offer support to its state-owned enterprises, and has failed to enforce intellectual-property protections.