The Committee on Global Thought is a proud co-sponsor of:
WTO 2.0: The Return (to Prominence) Through the JSI: The road to renewed policy relevance for the multilateral trading regime passes through a re-orientation of its legislative activity, and the manner in which it will engage with free-trade area
The WTO (World Trade Organization) has been making negative headlines because of the judiciary crisis that it has been going through in recent months. And yet, this crisis even if solved, is no guarantee that the WTO will be back on track. Its legislative function is moribund, and for good reasons (besides the often-mentioned demanding consensus requirement). As tariffs have become almost redundant, it is behind-the-border policies that segment markets. Similar policies are hard to discipline across heterogenous players, and the WTO is now exhibiting its most heterogenous composition ever. This is so for various reasons, ranging from asymmetric preferences across players, to the fact that behind-the-border measures are often adopted on mixed motives (protect both a social value as well as the domestic player), hence reducing and/or eliminating them is not an option since distortions will remain unaddressed otherwise. The quest for disciplining similar policies is a quest for “rationalization.” The rush to inter se agreements (free trade areas, and deep trade areas as per the World Bank’s 2020 study and terminology) emerges as the natural option, as these arrangements provide a more “convenient” forum in the quest for a regulatory interface. Unlike the classic “Vinerian” analysis, free trade areas (often overlapping with global value chains) might emerge as the forum par excellence for trade integration in the years to come. Coordination then will become a necessity. in the WTO, joint statement initiatives have played exactly this role, recently. In other words, the future of the multilateralism, which continues to be a necessity, is intimately linked with the manner in which it will handle variable geometry.