The World Trade Organisation (WTO), which has been regulating and facilitating global trade for the past three decades, has come under criticism regarding its relevancy and policies.
Some have suggested that the organisation’s relevancy has waned over time, making it unsuitable in an era of fracturing multinational alliances, protectionism and isolationist politics.
“If the WTO is at its weakest point, why is everyone joining. Does anyone join an organisation at its weakest point,” WTO director-general Ngozi Okonjo-Iweala said while launching a staunch defence for the organisation amid opposition to some of its pillars, nondiscrimination, reciprocity, enforceable commitments, transparency and safety valves.
For developing countries, the WTO, where decisions are reached by consensus, is a platform to resolve trade imbalances with each other but also with developed countries. “We spend our time complaining that developing countries don’t have a voice because of the share of voter system [at other global multilateral organisations]. At the WTO, the smallest member can block and has blocked,” Okonjo-Iweala said during a press conference ahead of the WTO public forum in Geneva, Switzerland.
“The consensus system is not easy to operate but if we do away with it, we do away with the voice of small countries.”
It in its world trade report, released on Monday, the WTO warns against increasing protectionism that threatens openness to international trade.
According to the WTO’s forecast, the volume of merchandise trade is expected to increase by 2.6% in 2024 and 3.3% in 2025, after a 1.2% contraction in merchandise trade volume in 2023.
The report highlights the importance of adopting a holistic approach that combines open trade with complementary domestic policies to promote inclusive trade. This includes implementing measures such as vocational training programmes to enhance workforce skills, unemployment benefits to support those affected by trade changes, education initiatives to foster a more skilled and adaptable workforce and competition policies to ensure consumers reap the benefits of lower prices.
“A key message from the report is that protectionism is not an effective, or cost-effective, path to inclusiveness. More and better trade is the path of bringing people and places from the margins to the mainstream of the global economy. But the report also makes clear that trade policy alone is insufficient to achieve this goal. Complementary domestic policies are necessary to make trade — and the wider economy in general — work for everyone,” Ngozi Okonjo-Iweala said.
It had been 30 years since the establishment of the WTO and the organisation was subject to reform, said WTO deputy director-general Xiangchen Zhang. “We need to reform the organisation to make it more relevant to the new dynamic of economic development.... One of the major targets of reform is how to help the developing country to better integrate into the multilateral global trading system.
“But I have to recognise that allocation of the benefit of the developing country in the integration of global economy is uneven. Some developing countries, especially those countries in African continent, they fail to benefit sufficiently from the integration. There are lots of reasons behind this. For example, we need to recognise ... those ecosystem, the rules, the books, often, rules are not valid. We need to improve it.”
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