To be sure, the US is not alone in undermining the WTO, though it has undoubtedly provided a major boost to those eager to challenge the body. A group of hard-nosed developing economies – especially Cuba, India, South Africa, and Venezuela – have also been doing their part.
Ignoring the negative impact of domestic policy on their economic prospects, these countries claim that the WTO is biased against developing countries. (Trump insists that the opposite is true.) So, they want to condition any WTO reforms on the satisfactory conclusion of the all-but-defunct Doha Development Round. In doing so, they are abetting Trump’s effort to dismantle a rules-based system that provided predictability to investors and thus enabled many developing countries to prosper.
Even Japan has been mounting its own challenge to free trade. Last month, apparently inspired by Trump, it imposed tighter controls on chemicals that South Korea imports to produce semiconductors (Korea’s top export item), ostensibly over national security concerns. It then removed South Korea from its “whitelist” of trusted trade partners, prompting South Korea to demote Japan on its own list of trade partners and to withdraw from a military intelligence-sharing pact.
At last month’s G7 summit in Biarritz, leaders again paid lip service to reforming the WTO. But there is little reason to hope that they will follow through. Instead, we may well be headed toward a new world order, in which trade deals replace trade rules, and raw power politics stand in for dispute adjudication.
Hector R. Torres, a senior fellow with the Centre for International Governance Innovation’s International Law Research Program, was previously executive director at the International Monetary Fund and a staff member at the World Trade Organization.