Ngozi Okonjo-Iweala takes the reins of the World Trade Organization (WTO) which, 26 years after its founding, must now reform and modify the trade rules it promotes if it wants to survive in modern times. This need is especially accentuated in today’s world marked by aspirations for de-globalization, which have been exacerbated by the trade conflict between China and the US and by the pandemic’s disruption of value chains and international trade.
No one has the miracle cure to modernize the WTO and adapt it to these new times, but institutions and the general consensus do point toward a list of requirements for ensuring the functionality of the organization, which I will explain below:
Ensure a stable foundation. The WTO has provided a stable and predictable trading environment, facilitating unprecedented development in terms of world trade and providing a framework for resolving trade disputes. The organization claims to have one of the “most active” dispute settlement mechanisms in the world, which, since 1995, has reviewed 600 disputes and issued more than 350 rulings.
Adapt the organization’s structure. The WTO is currently facing a crisis, because its architecture is not conducive to obtaining results from negotiations on unresolved disputes, such as those related to cotton and fishing subsidies. The solutions to such issues must stand up to the current demands of world trade. What’s more, the organization may also be falling short of the mark in its role as a monitoring system, and updates in this regard may be required to ensure the necessary transparency and to avoid trade barriers.
Renew the organization’s standards. The WTO could stand to renew its best practices and standards to reflect new realities in trade, and this reform should be carried out “by means of shared proposals” put forward by its 164 members.
Dispute resolution. Because the credibility of a standard-based system depends primarily on an independent and generally accepted model for resolving trade disputes, the dispute resolution system, known as the Apellate Body—which has been at an impasse since December 2019—must be restored.
Incorporate the sustainable development goals. As well as incorporating the goals related to economic recovery, the organization should also focus on the environmental and social sustainability and development objectives promoted by the United Nations, on which the WTO depends. This will allow the WTO to be a catalyst for meeting these specific goals.
In short, modernizing how the organization operates is inescapable. Although it will be difficult, we should consider certain minimum requirements to ensure the WTO’s functionality in modern times.