WTO Trumped By America

WTO's recent ministerial meeting at Buenos Aires highlights the strain on the multilateral trading bloc from US unilateralism and its own `unfair' system.

- Latha Jishnu

WHEN ELEPHANTS fight, it is the grass that suffers—an African aphorism that well describes the current state of play at the World Trade Organization (WTO). The 11th ministerial conference in Buenos Aires (December 10-13) was by all accounts a flop show with no movement on any major issue. “Collapse” was the word most commonly used, and had everyone asking the same question. Is it curtains down for the multilateral trading system, with the world’s biggest trading power, the US, accusing WTO of losing its focus besides attacking its rules? US Trade Representative (USTR) Robert Lighthizer also made clear his disdain for the organisation by leaving the ministerial conference (MC) a day before the event was wrapped up.

For long, developing countries have been mourning the death of WTO’s Doha Development Agenda, a round of negotiations that was aimed at improving their trade prospects. Now, it appears all 164 member countries will be mourning the death of the current WTO, if the US has its way. The WTO may not be the fairest of trading systems but it’s possibly the best of options now available to developing nations in a world of predatory free trade agreements and exclusionist plurilateral deals.

The WTO so far has functioned as a global club where members know their place. Although theoretically, member nations have equal rights, the hierarchies and privileges are neatly codified. The rules are fixed by the big boys and so is the system, which largely favours the powerful and rich. There was no fundamental challenge to the ruling order till China’s entry. With China’s exports showing no signs of flagging—the US trade deficit with China was $347 billion in 2016—the WTO has emerged as the villain of the piece.