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The World Trade Organization and the Demise of Multilateralism

Image Source: Map of World Trade Organization members and observers – Public Domain

Seventy-five years after the creation of the United Nations in the wake of the Second World War, the recent 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.

The organization has had several 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 U.S. and China all of a sudden shake hands and say, ‘OK, 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 favor of the principles of the organization 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 organization during the 1999 Seattle Ministerial meeting,” the former member added.

More recently, the United States-China trade war has hindered any progress towards global trade agreements. While working on a bilateral arrangement, the United States and China have bypassed the Geneva-based organization, 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 United States 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 United States has also been suspicious of multilateralism, as evidenced by the failure of the U.S. Congress to agree to join the League of Nations. Today, the list of the 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).

The consequences for International Geneva and Switzerland are dramatic. The WTO, UNHRC and WHO are all based in Geneva. Aside from a vacuum left by the lack of U.S. political leadership, the financial consequences could be dire. The United States has been the multilateral system’s major contributor. Countries under economic pressure due to the pandemic will have trouble supporting the United Nations system.

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

 

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Daniel Warner is the author of An Ethic of Responsibility in International Relations. (Lynne Rienner). He lives in Geneva.

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