Nine
candidates are vying to succeed World Trade Organization Director-General
Pascal Lamy when he retires this year.
As the next Director-General knows, the WTO does three things:
- establishes
and enforces global rules for trade among nations,
- serves
as an impartial forum for resolving disputes, and
- facilitates
negotiation of global trade agreements to boost economic growth.
The
WTO is doing fine on the first two duties, but has failed on the third.
The
WTO’s Doha Development Agenda is all but dead.
Why?
- Perhaps
it was doomed from the start by the WTO’s all-or-nothing approach where nothing
is agreed until everything is agreed – enabling small groups of countries to prevent
progress if they didn’t get what they wanted.
- Perhaps
the world has changed in the dozen years since the Doha Round was launched and
countries then seen as developing – such as China and India – now are global
economic powers who no longer deserve “developing” status.
- Perhaps
the final nail in the coffin, so to speak, was the rise of bilateral and
multilateral agreements among nations willing to more forward when the WTO
couldn’t – such as the Trans-Pacific Partnership and the potential new
agreement between the United States and the European Union.
Willing
countries are attempting to build on the progress made during the failed Doha
Round and soon will launch negotiations toward a global services agreement and
a global trade facilitation and customs agreement. These agreements will call into question a
fundamental WTO mission.
What
should the WTO do?
We
expect the new Director-General to continue to strengthen the WTO’s rulemaking
and dispute resolution systems. But what
about trade?
One
suggestion: Abandon the all-or-nothing requirement for progress on global trade
deals.
Allowing
the majority of countries to agree on terms and move forward would be a good
start. Doing so with the next WTO
agreement would help boost economic activity and would strengthen the WTO’s
role as a global venue for enhancing trade.