Is it the end? Or a new begining? The WTO and the changing international economic order -Kate Cornman

The WTO is in decline but not by its design. As an international organization, it promotes nondiscrimination towards developing countries through practices such as Most favored nation and national treatment, however, the world is shifting from one economic system to another and this may mean that the efforts of the WTO to provide a forum of communication between states has become flawed. Just as the world economy shed itself from the Bretton Woods system and entered the world of neo-liberal trade practices, this inefficiency in this trade apparatus may be the warning sign that an open market economy is not the solution for all problems. This process is triggered by an unset and has a transitional period, not a moment in time. It may take a decade for the world to identify the new economic system. I argue that the 2008-2009 Great Recession was an unset to a change in the world economic system, thus, international economic organizations which have promoted a free open market economy will have to adapt or lose its influence.

The WTO exists to provide a forum for trade negotiations, administer the trade agreements that governments conclude, and provide a mechanism through which governments can resolve trade disputes. The absence of this kind of forum would trigger an abundance of regional trade agreements, which could trigger regional disputes leading to political conflicts. For example, if two nations set up a trade agreement that isolates another nation, that other nation will not have an outlet to express its concerns over market disparities. Without a place for countries to present their issues, developing countries would be worse off.

The Doha Round, which started in November 2001 and continues today, has had many obstacles. The largest obstacles: 1.) Developing countries were demanding deeper liberalization of agriculture than the U.S. and the EU were willing to accept. 2.) The EU was insisting that negotiations on the Singapore issues be initiated in 2004 but developing countries were unwilling to negotiate on new issues until they had achieved substantial gains in agriculture. These obstacle illustrate the global north and south equality problem but maybe also the decline in the ideas of neo-liberalism in the economy.

Just like Bretton Woods, economic systems die out because of the changing politics ; The WTO will not end tomorrow. But similar to the Bretton Woods system, its influence will fade and nations will no longer turn to the WTO to solve trading issues and will depend on Regional Trade agreements.

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2 thoughts on “Is it the end? Or a new begining? The WTO and the changing international economic order -Kate Cornman”

  1. The author accurately describes the issues facing of the WTO. I agree that the influence of the WTO may begin to fade in the coming decades and that states may begin to settle their trade disputes through Regional Trade Agreements. I think the 2008 Financial Crisis has made many nations, particularly the developing nations, question the effectiveness of the open market and neoliberal trade policies as well as the expertise of the Western powers, such as the United States. Furthermore, the inability of the member states to come to an agreement and resolution of the Doha Round, which began in 2001, has added to these doubts. I think the only way to prevent decline is for the WTO to find a strong resolution to the Doha round where it proves it can still settle the difference of the various members and it can adapt to the changing beliefs in policy.

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  2. I agree with both the author and the previous commenter of this post: the WTO, as it is cannot stand. Like many other organizations that the great powers devised in the aftermath of the Cold War were just that: products of the two Great Wars. The problem is that the world is not the same as it was sixty years ago. The world is not even the same as it was fifteen years ago. The international organization has to rise to meet the new challenges, especially with the rise in influence of the developing nations. However, like the author stated, the developing nations are losing their faith in the WTO especially with the recent crisis in 2007-2008. Unfortunately, the Doha Round seems to have done nothing to ease these feelings as it continues into its 14th year. The WTO needs to adapt or to give way to a new system that better suits the needs of the world economies. This change cannot happen overnight, though, as history shows, for these kinds of organizations need time and incremental change to truly be effective.

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