Strengthening the Multilateral Trading System: the ‘WTO Rising’ Imperative

The World Trade Organization (WTO) – which was built around yesterday’s consensus to tackle yesterday’s challenges – is being pushed to breaking point by the entrenched disagreements of today. It will need reimagining if it is to rise to the 21st century challenges confronting humanity. And rise it must. The great trials confronting humanity imperil lives, not just livelihoods. Climate change, the pandemic, and persistent economic inequalities threaten to tear communities apart, spark social upheavals, and foster extremist politics within nations. Between nations, the same factors create strife that may lead to a fractured global economy, to commercial wars, or even real ones. What does trade and the WTO have to do with this? Trade is not the only thing we need to tackle these problems, but there will be no solutions without trade. We cannot fight climate change, repair the economic and health damage caused by the coronavirus disease (COVID-19), or redress economic inequality unless goods, technology, data, expertise, services, and capital move from nations where they are abundant to nations where they are scarce. This is exactly what trade does. International commerce is driven by arbitrage that moves things from where they are abundant, and thus relatively cheap, to where they are scarce, and thus relatively dear. Much more international commerce will be needed to solve the existential problems. However, the required trade growth will not happen without a high-performing multilateral trade system to provide certainty and to smooth inevitable frictions. This, in turn, requires a WTO that has the status, the clout, and the resources it needs. Call it the ‘WTO rising’ imperative. This short paper focuses on how the WTO can help with two of the challenges: climate change, and economic recovery from the pandemic. This is not to deny that there is ample room for improvement in other areas of the WTO’s portfolio (see Wolff, forthcoming 2022, and others).Before turning to concrete recommendations, we lay out the case that the WTO is simultaneously indispensable and inadequately equipped to handle the scale of difficulties thrown up by climate change and recovery from the pandemic.