Bracing For An ‘Improved' WTO

The World Trade Organization needs an overhaul, but the reform will leave even less space for developing nations

- Latha Jishnu

Outside there is anguish and fear, insecurity about jobs. It is the sacred duty of the UN system, the World Trade Organization (WTO) and the Bretton Woods Institutions to create reasons to believe in the future and to give people sound reasons to hope.” That was Rubens Ricupero, Secretary-General of the UN Conference on Trade and Development (UNCTAD) 22 years ago. The Brazilian economist was speaking to WTO delegates, many of them heads of government, on behalf of the UN chief to caution them that despite the impressive gains of global liberalisation the world was in turmoil since large numbers of people were not seeing the benefits. The turmoil has increased manifold since then, specially after the US mortgage crisis of 2008 roiled global financial markets and resulted in a contraction of economies.

Today the situation is dire. The COVID-19 pandemic has tested the ability of the world to act in concert to tackle an unprecedented challenge, and found it wanting. The disruption of global supply chains and the growing gravity of the economic downturn have spurred widespread trade protectionism, deepening a trend that set in two years ago. WTO finds trade restrictions by member governments have affected global imports valued at US $747 billion in 2019 alone. The rising uncertainty about market conditions has stalled investment worldwide and its implications for developing countries can be gauged from the World Bank’s projection that an additional 71 million people will fall into extreme poverty.