The World Trade Organization and the demise of multilateralism

Seventy-five years after the creation of the United Nations in the wake of the Second World War, the resignation of the director-general of the World Trade Organization (WTO), Roberto Azevedo, does not bode well for the international trading system, multilateralism and International Geneva.

Daniel Warner is a Swiss-American political scientist and former Deputy to the Director, Graduate Institute Geneva

The WTO has had several major setbacks even before the pandemic: The Doha Development Round to lower trade barriers which started in November 2001 has not been completed; the WTO’s unique dispute-settlement system was stymied last year when the United States blocked all nominees. 

The disheartened Brazilian diplomat threw in the towel, saying, ”If I stay here will the virus go away? The virus will not go away. If I stay here will the US and China all of a sudden shake hands and say, ‘Let bygones be bygones’? No, that is not going to happen. Nothing is going to change if I stay here.”

The director-general was not without his critics. “He was not courageous enough to take positions on major issues in favour of the principles of the organisation and he was afraid to confront the United States,” said a former member of the WTO’s Appellate Body, who commented that Azevedo lacked the political dexterity of his predecessor, Pascal Lamy.

“In a sense, the WTO never recovered from the violent protests against the organisation during the 1999 Seattle Ministerial meeting,” added the former member. 

Bypassed

More recently, the US-China trade war has hindered any progress towards global trade agreements. While working on a bilateral arrangement, the US and China have bypassed the Geneva-based organisation, significantly hindering any new global agreements or completion of the Doha Round. Azevedo admitted that “we are doing nothing now - no negotiations, everything is stuck. There’s nothing happening in terms of regular work.”

In a larger sense, the failure of the WTO reflects the demise of multilateralism through the lack of American leadership. President Woodrow Wilson was the driving force behind the League of Nations. The US and its allies were instrumental in the creation of the United Nations, specifically in the establishment of the General Agreement on Tariffs and Trade (GATT), the predecessor of the WTO. 

As well as being a multilateral leader, the US has also historically been suspicious of multilateralism, as evidenced by the failure of the US Congress to agree to join the League of Nations. Today, the list of the current Trump Administration’s attacks on the system is long. Among them are failure to sign the Paris climate accord; withdrawal from the Iran nuclear agreement; withdrawal from the United Nations Human Rights Council (UNHRC); withdrawal from the United Nations Organization for Education, Science and Culture (UNESCO); suspending payments to the World Health Organization (WHO) and ending funding to the United Nations Relief and Works Agency (UNRWA). 

Marginalised 

The consequences for International Geneva and Switzerland are dramatic. The WTO, UNHCHR and WHO are all based in Geneva. Aside from a vacuum left by the lack of US. political leadership, the financial consequences could be dire. The US has been the multilateral system’s major contributor. Countries under economic pressure due to the Covid-19 pandemic will have trouble supporting the UN system. The contribution of international organisations to Geneva’s economy has been well documented. 

The coronavirus has shown the weaknesses of multilateralism. It is ironic that solutions to a global pandemic have turned countries inward. Scientists are cooperating to find a vaccine, but competition over scarce resources has shown that in times of crisis, countries look for domestic solutions to a global problem.

So beyond the chaos at the WTO, the UN system continues to be weakened. “The balance of power has changed since the end of the Second World War,” notes Georges Abi-Saab, Emeritus Professor of International Law at the Graduate Institute. “Formal structures and international organisations are too divorced from the new balance of power.” In addition, he said, “multilateral organisations lack charismatic leaders which has led the UN to be marginalised on major issues like peace and security.

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