A first step to staying relevant

From saddened to death to jubilant: This is how the mood on Lake Geneva in the halls of the World Trade Organization (WTO) can be described over the past few days. On Friday morning the twelfth ministerial conference of the WTO ended with liberating applause and mutual slaps on the back. The Ministerial Conference is the highest decision-making body of the organization. It seems that, as in the story of Baron Munchausen, the Geneva institution has taken hold of itself and pulled itself out of the swamp.

premature farewell

Despite all the death notices that have been posted by many quarters for the WTO over the years, the 164 member states have given a strong sign of life for a rules-based trading system and multilateralism. Multilateral means that all sides are involved in the decision and agreements are decided unanimously. It is indeed a success that the member countries were able to pull themselves together. Among them are the geopolitical rivals USA and China as well as the war opponents Russia and Ukraine.

This is balm for the soul of the organization: the attacks by former American President Donald Trump, the US blockade of the WTO arbitration court, the protectionist reflexes during the pandemic, the disruptions in global supply chains and the Russian war of aggression have put faith in the Functionality and the relevance of the World Trade Organization clouded.

But the feeling of dealing with a paper tiger has existed for years: ever since the Doha Round, a comprehensive package to improve world trade, which began in 2001, failed miserably. The WTO did not have an immediate answer to the most pressing problems, such as the health crisis of recent years or the most recent food crisis.

“Hooks and Eyes”

However, the guardian of world trade is only as strong as the members want and allow it to be. The big signal that this ministerial conference is sending out is above all the wish of the members to continue to use the WTO as a platform. This is good news, especially for medium-sized and smaller trading nations such as Switzerland, Canada, Australia, South Africa, Indonesia and Brazil. The WTO is a guarantee that the law of the strongest does not prevail in the trading world.

In order to remain relevant, however, primarily political signals are not enough. Ngozi Okonjo-Iweala, the hands-on WTO director-general, concluded by saying she was amazed at how long one word in a footnote could be discussed. This also shows that the agreements are characterized by compromises and still have many “snags and snags”, as Olaf Wientzek from the Konrad Adenauer Foundation puts it. Some things were left out, some things were postponed, and the WTO members saved the major systemic issues anyway. Therefore, the success of the Ministerial Conference can only be a first step towards proving the usefulness of the organization.

Clear goal

Okonjo-Iweala issued the slogan by stating that strategic coordination can exist alongside strategic competition. The multilateral momentum should be used, but given the difficult process, it should not be overestimated either. One must not be under the illusion that the US-China rivalry will be settled within a multinational body. This is certainly happening outside the WTO. And this has to adapt to the busy zeitgeist of an increasingly fragmented world.

One way out of this are so-called plurilateral agreements, which already exist within the WTO system. A “critical mass” of members can enter into an agreement that is also open to non-participating countries. The motto is: as multilateral as possible, as plurilateral as useful. The means can change, but the goal must be clear: Largely open trade borders are an important basis for prosperity.

You can contact the business editor Gerald Hosp follow on twitter.