Addressing multiple challenges
Another priority involves modernising the WTO by bringing it up-to-date with the new realities that continue to transform the world economy – most notably digitisation, e-commerce and the virtual economy. Then there is the increasingly pressing need to rationalise domestic regulations covering the global trade in services, and the list goes on.
As George Riddell, Trade Strategy Director, Ernst & Young LLP, emphasises: “The WTO urgently needs to start delivering concrete outcomes on issues that really matter to the global economy. Members need to find ways of moving forward past the failures of the past, even if it means only a smaller grouping of countries delivering positive results rather than the full membership.”
Acknowledging the positives
Although there is a consensus that key parts of the WTO urgently need fixing, it is equally important to acknowledge the many compelling reasons why businesses, especially in the UK, should still care about the WTO.
For a start, the WTO is the world’s largest and only truly global rules-based trading organisation, with 164 members that collectively represent over 96% of international trade and global gross domestic product (GDP). There is measurable evidence that these countries have made a positive difference to world trade through their membership. Individually, they have also netted significant benefits.
Ironically, perhaps, the two countries that are currently engaged in the fiercest trade disputes – the US and China – are the same countries that have gained most from being WTO members. A study, The WTO at 25: Assessing the Economic Value of the Rules-Based Global Trading System (pdf), commissioned by the German-based independent foundation, Bertelsmann Stifung, to mark the WTO’s 25th birthday in 2019, found that the US had gained around US$87bn as a direct result of being a WTO member whilst China had gained US$86bn. The study put the EU’s gains at US$232bn.
By helping to remove barriers to global trade and boost economic growth, the WTO has also made an important contribution towards alleviating poverty and uplifting communities in some of the world’s poorest countries.
A group of the WTO’s membership is attempting to push forward negotiations on topics such as e-commerce, domestic services regulation and improving the trading prospects for micro-, small- and medium-sized enterprises through the so-called Joint Statement Initiatives. A successful conclusion to these trade negotiations would mark a significant step forward for the WTO.