In a Peterson Institute for International Economics Policy Brief (an accessible 11-pager) Professor Robert Z. Lawrence of Harvard University addresses the issue of the precariousness of the WTO in the light of unilateral sanctions by members against one another in recent years.
That the WTO isn’t functioning properly is a problem not helped by America’s refusal to nominate judges to it’s Appellate Body thereby, de facto, suspending its authority.
Is this the end of multilateralism or can compromise be found to get the wheels back on a system that seemed to have served the world so well, and for so long?
The Professor believes the way forward is for the WTO to adopt a “variable geometry” and move away from it’s historic modus operandi of ‘one for all, and all for one’ rule making and implementation.
In future if some Members want to form a special interest bloc for, say, fintec they should be encouraged to do this beneath the WTO umbrella. That way non-participants can have access to the workings of such blocs and a common adjudicator for disputes could still be contained within it.
A failure to fix the WTO and further trends towards trade ‘Balkanization’ would be a retrograde step and the Professor cautions: “..if order cannot be maintained in this sphere, there are even greater dangers that the problems in trade spill over into the other geopolitical frictions that plague the broader international system today.”
You can access the brief in full via this link How to save the WTO.
The ball on this seems to be very much in America’s court. Let’s hope they have the good sense to return it in the not too distant future. For their and all our sakes.
Happy Sunday.