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Experts warn of existential threat to WTO

A panel of independent experts warned the WTO could become irrelevant if trade wars and tensions cause wider "backsliding" towards trade protectionism.

GENEVA (AN) — A panel of independent experts warned that the World Trade Organization could become irrelevant if U.S. President Donald Trump's trade wars cause "backsliding" among major economies towards trade protectionism.

The report, prepared for WTO's Director-General Roberto Azevêdo by the German private foundation Bertelsmann Stiftung, said the trade tensions pose a serious threat to global trade governance. And without a major shakeup at WTO, it warned, the international organization faces a "gradual demise."

Azevêdo, in his response to the report, acknowledged the issues are "high on the agenda" among those in the international community who care about preserving the multilateral trading system's rules.

The panel's report recommends that WTO revitalize itself as a forum for trade cooperation and conflict resolution to prevent "further erosion of the WTO's credibility" due to the United States and other nations bypassing the global trade body through unilaterally imposed tariffs and retaliatory measures.

That and other urgent measures are needed, it said, to prevent further "backsliding by WTO members towards unilateral use of protectionist trade policies" and to resolve disputes "effectively and efficiently."

The U.S., China and India

The panel's 14 experts who prepared the 56-page report had four main recommendations for WTO:

  • Member nations should have more discussions about "trade-distorting policies."
  • For the sake of efficiency, not every new negotiation or initiative needs to involve all members.
  • The secretariat must take on the role of supporting policy dialogue throughout the organization.
  • A new internal review mechanism is needed to ensure that the organization performs well.

The report's leader and main author, Bernard Hoekman, said WTO's 164 member nations need to maintain open channels of communication if the organization is going to survive.

"It is by keeping the channels for policy dialogue open that WTO members can best determine the way forward for the organization as an effective multilateral forum for trade cooperation and conflict resolution," said Hoekman, a global economics professor at Italy's European University Institute.

WTO, which has previously weathered public skepticism over its relevance and future, handled some 500 disputes since its creation in 1995. But the report said WTO's body for handling appeals could grind to a halt by the end of 2019 if Trump continues to block judicial appointments as new vacancies arise.

The report also suggested WTO has even more to worry about than the Trump administration's enmity of international organizations — China and India complained of being treated unfairly.