A logo is seen at the WTO in Geneva
Credit: Reuters Photo
Recently I attended the annual alumni reunion of the Madras Christian College in London. That former students of this institution in Chennai are found all around the world is a testimony to the globalised world we live in. However, it stood in contrast to the theme of the World Trade Organization (WTO)’s Public Forum held at its headquarters in Geneva this year titled ‘Re-Globalization: Better Trade for a Better World’, revealing a pressing concern for the trade policy community: whether the world can turn the clock back in a world increasingly fragmented by protectionist and nationalist policies.
The nature of global politics has shifted, and the WTO, under the leadership of Director-General Ngozi Okonjo-Iweala, is at the forefront of addressing challenges posed by it. Her positive tone at the forum reflects the WTO’s continued efforts to make the case for free trade and multilateralism, emphasising the organisation’s role in lifting billions out of poverty since its founding in 1995.. In conversations, Okonjo-Iweala, while acknowledging the problems, never failed to hit a hopeful optimistic note.
All in all, it did seem rather astonishing that a case even had to be made considering the WTO’s contributions to economic growth; but, should I have been astonished at all really? The fact also is that the WTO’s narrative coexists with stark realities that cannot be ignored.
On one hand, for example, the WTO’s World Trade Report 2024, a significant highlight of the forum, which explored the complex inter-linkages between trade and inclusiveness reiterates the role of trade in supporting numerous jobs and providing access to affordable goods and services. On the other, undoubtedly, the economic benefits of globalisation have been concerningly uneven which has led over time to what Walden Bello called ‘Deglobalization’ or which maybe more accurately termed ‘slowbalisation’.
A direct outcome in trade terms is growing protectionism that has emerged in many countries buoyed by nationalist policies reflecting public disillusionment with global institutions and trade agreements. The malaise deepens a long-running crisis at the WTO that escalated in 2019 when then US President Donald Trump, angered by rulings he perceived to be favouring China — vetoed the appointment of new judges to its top appeals court. The Joe Biden administration had also upheld that decision.
Closer home, India has also opposed any attempt to impose mandates on non-trade issues, and on more than one occasion, this author was witness to comments that expressed frustration with the Indian position at WTO deliberations. Whether or not these positions have merit, what is undeniable is that the WTO dispute resolution process has broken down, and the body has lost some of its standing as the primary referee of the rules-based global trading system, which the director-general is at pains to try and resurrect.
So where do we go from here? In the words of a trade negotiator, it is reform or perish, thus setting out the scale of the task before the WTO. This year’s forum took that to heart with numerous sessions focusing on what reform means and pathways to achieve this. Importantly, the private sector’s role in this process was duly acknowledged as being invaluable to enabling free trade given its important role as a critical source of capital for financing development and investment. It was therefore encouraging to see the private sector show up in larger numbers this year and be given a seat at the table which some would say, was long overdue.
These are all positive developments with the view to resurrecting the multilateral trading order, but the fact also is that trade today is deeply fractured along geopolitical lines. This is evident in the barbs that are exchanged between major powers on issues like critical minerals or tariffs only to name two. In this situation, the WTO must be commended in trying and turning the focus on itself, and pursuing reform. However, who will address the elephant in the room because that seems a much bigger challenge, and possibly out of the hands of the organisation, private sector, or civil society? The upcoming United Nations General Assembly (UNGA) in New York may provide some answers to the nearly 4,400 hopeful delegates gathered at the WTO this past week.
At the end, protectionism is an unlikely path to inclusivity if that remains an ideal the world still aspires to.
(Bharat Ramanan is an international affairs and political risk expert. X: @bratistotle)
Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.