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To be, or not to be: That is the question
facing the World Trade Organization (WTO)
as it observes its 70th anniversary this
year. Founded in 1948 as the General
Agreement on Tariffs and Trade, the
WTO, together with the World Bank, the
International Monetary Fund and other
international organizations built on the
ruins of World War II, was once an impor-
tant pillar of the international economic
order dominated by the United States.
However, the WTO is currently facing
unprecedented challenges that, ironically,
are largely posed by the U.S. itself.
Heateddebate
A product of globalization and a model for
international governance, the WTO has
164 members, which comprise 95 percent
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a dispute settlement mechanism, and it
has successfully resolved hundreds of in-
ternational trade disagreements. Over the
decades, the WTO has also contributed
greatly in the defense of the international
free-trade system.
Yet criticism of the WTO has never quite
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ever in the 21st century, as seen in the
breakdown of the Doha Development
Round of trade negotiations that began in
2001 and the subsequent failure of revival
attempts ever since. The lengthy bureau-
cratic process of dispute settlement and
the principle of consensus have led to the
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Moreover, the rapid development of the
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of new business models in the information
age have left the WTO behind, its current
AtaCrossroads
Reforming the WTO is imperative, but consensus will be necessary
By Xu Feibiao
rules outdated and ill-suited to the realms
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protection, competition policy, invest-
ment facilitation and other contemporary
international economic and trade issues.
This obsolescence, coupled with the grow-
ing trend of regional and trans-regional
free-trade agreements, especially among
developed countries, has relegated the
WTO to the margins.
In recent years, the organization has
faced more severe and direct challenges,
following the election of U.S. President
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and the surge of protectionism and anti-
globalization worldwide.
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measures have unleashed a string of
damaging blows to the WTO. Proclaiming
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WTO rules by unilaterally imposing tariffs
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recently, the U.S. initiated a trade war with
China and the EU, unprecedented in scale,
by slapping tariffs on thousands of com-
modities worth tens of billions of dollars,
while the WTO could only stand by and
watch.
The U.S. has even threatened to withdraw
from the organization, and has doggedly
disrupted the judge nomination process
for the WTO Appellate Body. In May,
Ricardo Ramirez-Hernandez, a former
Appellate Body judge, said that the
organization is being gradually strangled
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Different arguments
The WTO has reached a crossroads, and its
members now face the choice of whether
to restore or abandon it. It is impossible
for the WTO to return to the past, and its
future now depends on the decisions of
the countries involved.
This predicament has been brought
about by two major factors. Firstly, the
international economic structure has
been undergoing a major transformation.
Globalization, following its rapid uptake,
has slowed as the negative side effects
of unfettered integration become more
apparent. Secondly, the willingness of
traditional hegemonic powers to share
global responsibility has declined, and
these nations now want to reshape the
international economic and trade order
to cope with competition from emerging
powers.
The U.S. has long been vocal about its dis-
satisfaction with the WTO. During Barack
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House sent repeated signals about WTO
reform, and blocked the nomination of
new judges to the WTO Appellate Body.
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Partnership and the Transatlantic Trade
and Investment Partnership, in an attempt
to rewrite international economic and
trade rules in its favor.
Trump, who considers the WTO a disaster
for his country, has taken this line of think-
ing several steps further. The president
has rattled the saber of unilateralism and
protectionism, and his administration
has initiated bilateral and regional trade
negotiations in an attempt to reshape
the international order according to his
America First policy.
Although the two presidents have em-
ployed different methods, their aims are
consistent. By signing a new generation of
bilateral and regional trade and economic
treaties, the U.S. is attempting to bring
China and certain other countries to heel,
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its own interests.
In July 2017, the U.S. issued reform pro-
posals to the WTO, which would require
that the organization make new rules on
trade and improve its dispute settlement
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discussion of whether to retain the policy
on the special and differential treatment
of developing countries.
European Council President Donald
Tusk and French President Emmanuel
Macron have also called for WTO reform
to respond to the current chaos of
international trade, and to prevent the
The author is an
associate researcher
with China Institutes
of Contemporary
International Relations.