WTO in Times of Major Change

The international trade world has been changing over the last decade or so. Since 2008 there has been a shift in the pattern of economic growth, away from western economies and towards Asia. There are now effectively four distinct groups in the World Trade Organization: the old “OECD” countries, the new “emerged economies,” other developing countries, and the least developed countries.

The relationship between these groups needs to be defined in order for the organisation to move forward. The need for this is evident from the standoff in the Doha Round negotiations, where China, Brazil, and India acted within the core G-5 group as representatives in some sense of all developing countries. It makes little sense that Brazil and India argue that they need the same special and differential treatment as all other developing countries when their trade performance shows that they are competitive in global markets. It equally makes no sense for the United States and the European Union to insist that all developing countries should aim at impossible targets, in terms of levels of bound tariffs post-Doha, or much expanded services commitments, whereas it might work to ask for such efforts from the ‘emerged’ group.

One way of addressing this issue lies in a change in the institutional architecture. An intermediate body is needed between the current 159 members, who can be consulted individually, and the General Council, which acts for them collectively. This will lead to a re-examination of the relationship between developed and developing countries that has existed since the 1960s.

Tag: Commercial Frictions & Uncertainties, Deliberations, Functioning of the WTO, Global Trade & Investment Architecture, Multilateral, Negotiations, System Legitimacy