The World Trade Organization (WTO), formerly known as the General Agreement on Tariffs and Trade GATT, was established as one of the international economic architecture pillars after World War II, along with the International Monetary Fund (IMF) and the World Bank (WB).
The organization was established after the Marrakesh Agreement, on January 1, 1995. It enjoys international membership and is chaired by a ministerial conference for all members.
According to the Marrakesh Agreement, WTO is mandated to provide a forum for trade negotiations, facilitate the implementation and operation of multilateral trade deals, manage dispute settlement mechanisms, oversee and administer multilateral trade policies, and cooperate with the IMF and the WB to achieve more coherence in the development of global economic policies…The GATT was designed to ease protectionist policies, end trade wars, and remove barriers to exports and imports, which have been already accomplished.
However, despite all of its previous formidable achievements in stimulating international economic growth, the organization, today, is unable to remove the dust floating heavily on its strategy within its elegant building on the bank of Lake Geneva.
What makes matters worse, the global economic recession, which is the largest since the Great Depression in the 1930s, the international trade has been severely affected by the coronavirus pandemic that caused the collapse of production and trade, which means that the organization enters into a real recession.
Unlike most international bodies, it has a dispute settlement mechanism, but because of the current problems suffered by the global system, the WTO, which includes 164 members, has already suffered from a crisis with the escalation of trade disputes. For example, it was forced to freeze the Appeals Tribunal for the Dispute Settlement Body because of the United States (U.S.), which has obstructed the appointment of judges since 2017, preventing the achievement of a quorum, that requires the presence of three judges.
The two largest economies in the world and I mean China and the United States (U.S.), are still fighting a fierce trade war, issuing fees and reciprocal procedures that undermine their rules, and no one is afraid of the appellate system’s rulings, because this authority has stopped for a while.
Some experts believe that the organization reached this current situation due to former President Donald Trump’s decisions, but this interpretation is not entirely correct, despite the fact that Trump paralyzed the WTO when he refused to appoint new judges inside the court, the organization was in a state of deep hibernation long before it was exposed to Trump’s international policy.
However, the world enjoys a new historical opportunity that can change the direction of international trade rules and establish a greater space for countries to benefit positively from global trade rules, improve the income of their people and create positive investments capable of facing the challenges of climate change and economic stagnation, especially after the appointment of Ngozi Okonjo-Iweala, Director-General of the WTO, to be the first woman and the first African figure to chair this organization.
Okonjo-Iweala has a rich background in the world of finance and commerce; She served twice as Nigeria’s Finance Minister and then Foreign Minister. She started her journey with the World Bank (WB) in 1982, where she worked for 25 years. The Nigerian woman chairs an institution that had been run by six men since its inception in 1995, including three Europeans, a New Zealander, and a Thai, as well as a Brazilian.
The new director will benefit from the positive signals made by President Biden in favor of the organization. In my opinion, this will make it able, during the next Ministerial Conference, to present an agreement on the official support provided to fishing, which is currently suspended, and to reconfigure the Conflict Resolution Commission.
As for thorny issues such as property rights, this will be difficult with the greed that dominates major international companies and countries; as many developing countries support the patent exemption. However, the rich countries that include many drug production laboratories believe that the current rules stipulated in the WTO Agreement on Intellectual Property Rights are sufficient and this makes the issue of reform very difficult, not to mention the repercussions of the ongoing trade conflict between the U.S. and China, which makes the organization a body that has lost all the possibility of intervention, and even of all legitimacy.