World Trade Organisation left languishing on life support

• Author: CommentFrom the Financial Times editorial board
• Published date: 24 June 2022
• Publication title: New Zealand Herald, The (Auckland, New Zealand)

Yet the WTO remains, in many ways, on life support. Keeping it alive is important; if it did not exist, the world would need to reinvent it — which would be very hard today

Indeed, with multilateralism under such strain, and problems of managing global public goods multiplying, it is arguably needed even more today than when it was created in 1995.

Globalisation has stalled. The global financial crisis was followed by a populist backlash against open borders. Donald Trump’s election led to a US trade war with China. The COVID-19 pandemic gummed up global trade and prompted companies to reconsider the wisdom of extended supply chains.

That makes the likelihood of further big rounds of trade liberalisation in the foreseeable future almost non-existent. Indeed, preferences on how to regulate some of today’s main growth areas, such as digital services, differ so much across the world it is hard to see a basis for agreeing on global rules.

Yet open trade remains so important to global prosperity and there are so many issues countries must deal with that a forum such as the WTO can still play a key role. One example is limiting subsidies for fishing that are destroying global fish stocks. Another is climate policy. The carbon border adjustment mechanism being implemented by the EU — putting tariffs on imports where the producer is not paying a cost for emissions — is bound to lead to arguments over which are legitimate and which are protectionist. Without at least a way to resolve disputes, trade wars could result.

Ngozi Okonjo-Iweala, the WTO’s energetic director-general, deserves great credit for keeping the body’s heart beating. Its future health and vitality...