A world without the WTO: what’s at stake?
CEPR Policy Insight No 84
Despite the decade-long Doha Round logjam, trade liberalisation and new rule writing has proceeded at a furious pace outside the WTO. The majority of WTO members, however, ignore the lessons of Doha failure and non-WTO successes, preferring to extend Doha deadlines and pretend it is still doable. This Policy Insight argues that this ‘extend and pretend’ approach is a mortal threat to the WTO. First, the failure is acting like ‘dry rot’ in the timbers holding up common interest in multilateral cooperation on trade. Second, the inability to conclude a Round means that the WTO has been unable to update its rulebook, so WTO judges are using 20th century rules to evaluate 21st century disputes. Moreover, relying on mega RTAs to create a natural order of trade is an illusion as they lack key elements of the GATT’s success – especially non-discrimination and its ability to foster a common interest in multilateral cooperation. Moreover, mega RTAs have only partially filled the needs of the GVCs while at the same time creating spaghetti bowls in rules and leaving third nations outside. The Policy Insight argues that all efforts should be made to salvage the WTO and move it back to centre stage of the global governance regime. The first step would be to either finish or finish off the Doha Round