World Trade Organization Analysis

This assignment requires a critical analysis of the World Trade Organization (WTO). Students must delve into the WTO's structure, function, and historical context. The analysis should evaluate the WTO's effectiveness in promoting global trade, addressing protectionism, and resolving trade disputes. Furthermore, students need to consider the challenges facing the WTO, including the Doha Round deadlock and its relevance in a changing global economic landscape.

The Increasing Irrelevance of the
World Trade Organization
October 7
2017
There are many who question the relevance of the World Trade
Organization. What are the causes of such irrelevance? The latest
round of WTO negotiations started in 2001 and concluded in 2013.
The outcomewere compiled in a package that did not resemble the
outcomes that were targeted at in the Doha round, but merely looked
like a shadow. Does this imply weakness, ineffectiveness and
irrelevance or does this imply a more flexible and inclusive system.
This report examines the WTO from this point of view and provides
some recommendations to the way forward.
Causes and the Way
Forward

Contents
1. Introduction.........................................................................................................................................3
2 Causes of Irrelevance................................................................................................................................3
2.1 The Increasing Popularity of Bi-Lateral and Multi- Lateral Trade Agreements..................................3
2.2 Accommodation of the Clash of Interests of Developing and Developed Countries.........................4
2.3 The decreasing clout of USA and European Union............................................................................4
2.4 World Trade Organization and Dispute Resolution.......................................................................5
3 Conclusion: The Way Forward for World Trade Organization............................................................5
References...................................................................................................................................................5

1. Introduction
The World Trade Organization formed in 1995 was a evolved version of the General Agreement
on Tariffs and Trade as countries all over the world sought a platform to discuss and regulate
international trade (Curtis, 2012).
The scope of World Trade Organization extends not only to regulating trade tariffs and barriers
but also to serving as a body that negotiates critical issues like Intellectual Property Rights,
support trade policies in member countries and is the Dispute Settlement Body for international
trade (Curtis, 2012) To some, the WTO is the leader for trade liberalization in the world.
(Meltzer, 2011)
The latest round of negotiations by World Trade Organization started in Doha in2001 and
culminated in Bali on 2013. The set of agreements and procedures that were concluded at the
conference were compiled as the Bali Package. (World Trade Organization, 2013) However, the
year 2008 was a critical point in the history of world trade. As the Global Financial Crisis hit the
world in 2008, countries all over the world also saw the negative effects of excessive
globalization. The brief period inflowing the crisis saw an increase in protectionist voices all
over the world. (Bussière, Pérez-Barreiro, Straub, & Taglioni, 2010). For example, the increasing
trade of USA with China was views as a reason for unemployment in the USA, thereby, views to
be a cause of the crisis. (Meltzer, 2011)
2. Key changes in WTO since 2008
The trend of lower trade barriers has started since 1950s. This trend has continued and has been
lower trade barriers. During the period of 2008 and 2014, the “ Tariff Trade Restrictiveness
Index” has marginally fallen for most regions, except ‘transition economies (group of some
centrally planned economies making a shift to market economy)’. Similarly, the trend of
fragmentation of global supply chains has also increased, implying that more goods and services
are now being produced and integrated outside their home country. (United Nations Conference
on Trade and Development, 2016) Yet, the Global Trade Growth, in the post crisis world has
been very slow, some even questioning if global trade has peaked. (Hoekman, 2015) Many have
questioned the relevance of the World Trade Organization in the post crisis world. (Dadush,
2014) while some have credited the WTO for being able to convince countries against
protectionism. (Meltzer, 2011)
Table 1" Tariff Trade Restrictiveness Index (TTRI)" by Importing Region and percentage change between 2008-2014
Importing Region Index value % change in Index
East Asia 2.6 -0.7
South Asia 7.1 -0.6

West Asia and North Africa 1.6 -0.3
Sub-Saharan Africa 3.9 -0.7
Latin America 1.1 -0.6
Transition economies 0.4 0.3
Developed countries 1.8 -0.3
Given below are some of the changes seen in the working of WTO due to change in world trade:
2.1 Increasing Popularity of Bi-lateral and Multi Lateral Trade Agreements
Outside of WTO
One of the key advantages that member countries have as a part of being WTO members is that
they can access foreign markets with lower trade barriers. Countries that are not a part of the
WTO would have to negotiate individually. In a post crisis world, this advantage does not hold
much weight. It has been observed that in the current environment, countries are increasingly
turning to specialized bi-lateral and multi lateral trade agreements (Dadush, 2014) . Logically,
countries have greater freedom to tailor their trade agreements to suit their needs at the multi-
lateral and bi-lateral platforms than in one size fits all treaties that are offered by the World
Trade Agreement.
The USA and European Union have recently launched the Trans- Atlantic Trade and Investment
Partnership with the inclusion of countries like Australia, New Zealand etc. Similarly, Asian
countries like India, Japan, Korea have formed the Regional Comprehensive Economic
Partnership. (Wilson, 2013)
2.2 Accommodation of the Clash of Interests of Developing and Developed
Countries
In November 2008, at the WTO conference in Geneva, member states assured that they would
not resort to following protectionist measures due to the crisis. (Bussière, Pérez-Barreiro, Straub,
& Taglioni, 2010). However, the post crisis world has forced countries across the world to see
the negative effects of globalization and caused them to negotiate harder to protect their domestic
interests.
The same period has also seen a change in the structure of the trade of the world as the output
and trade levels of emerging market economies like BRICS countries grew. (Altinkaya, 2013)
(United Nations Conference on Trade and Development, 2016) While countries like USA seek to
retain domestic agricultural subsidies to maintain exports, countries like India and China seek to
retain agricultural subsidies to protect food security. (Banik, 2013) Similarly, developing
counties like India and Brazil believe that strict Intellectual Property Rights restrict the import of
inexpensive technology which is required to fuel critical sectors and industries like agriculture
and pharmaceuticals. (Riker & David, 2014) Countries are increasing find it difficult to agree on

various issues relating to trade in goods and services, given the increasing complexity of interest,
regional and economic alliances etc. At the WTO, countries tend to negotiate like pressure
groups such as G-20, African Union etc. One of the prime examples of such complexities is
multi –layered disagreements in Non Agricultural Market Access discussions. The clashing
interests of various countries make it difficult to reach a comprehensive agreement of trade
barriers. (Wolfe, 2013)
Different countries are at different stages of development. Hence, treaties ratified by the World
Trade agreement must he integrated enough to ensure that interests of developed, developed and
least developing countries are not sacrificed. (Dadush, 2014)
3 Conclusion: The Way Forward for World Trade Organization
3.1 Rise of Pluri-lateral Agreements and Changes in the stance of the WTO
The result of the trends reflected above is the delayed ratification of the treaty or a treaty that
does not have teeth, or “pluri lateral agreements” However ,“pluri lateral agreements” seem to
have disadvantages. Countries that were not a part of the negotiations, often, may not see the
virtue of imposing upon themselves rules that were negotiated and discussed by other parties.
(Dadush, 2014)
The non-binding nature of the Bali Agreement can imply that the structure of WTO has become
more flexible. The flexibility in such structures allows countries to accommodate the domestic
pressures without choose between domestic growth and international trade. (Dadush, 2014)
3.2 The Way Forward
 While countries are increasingly seeking cross-border negotiations, these negotiations are
also conducted according to international rules such as those laid down by negotiations at
the WTO. Thus, there is plenty of scope for the WTO to become a specialized international
body that provides standards, frameworks and guidance for trade negotiations and
agreements, regardless of the platform for these negotiations.
 The WTO can also gain more relevance by way of becoming more accessible to resolve
trade related disputes. Dispute resolution is one of the key functions of the World Trade
Organization. In the last decade, the number of disputes resolved by WTO has declined
considerable. The share of least developed countries and Developing countries as
complainants in these countries has been low to negligible. (Reich, 2017) This ia functional
area that the WTO can increase its relevance in.
References
3. Altinkaya, Z. (2013). Changing Global Trade Structure After 2008 Financial Crisis. ISS & MLB (pp. 594
-609). Istanbul: Istanbul Aydin University.

4. Banik, N. (2013, April 28). Ways to Break the Doha Deadlock. Retrieved October 7, 2017, from The
Hindu: Business Line: www.thehindubusinessline.com/opinion/ways-to-break-the-Doha-deadlock
5. Bussière, M., Pérez-Barreiro, E., Straub, R., & Taglioni, D. (2010). Protectionist response to the Crisis:
Global trends and Implications. Frankfurt am Main: European Central Bank.
6. Curtis, J. M. (2012). Intellectual Property Rights and International Trade: an Overview. The Centre
International Governance Innovation.
7. Dadush, U. (2014, January 14). How Can the World Trade Organization Stay Relevant? Retrieved
October 6, 2017, from Carnegie Endowment for International Peace:
carnegieendowment.org/2014/01/14/how-can-the-world-trade-organization-stay-relevant-pub-
54196
8. Hankla, C. (2014, December 9). Why the WTO still matters. Retrieved October 6, 2017, from The
Conversation: https://theconversation.com/why-the-wto-still-matters-34624
9. Hoekman, B. (2015, June 26). Has global trade peaked? Retrieved October 8, 2017, from World
Economic Forum: https://www.weforum.org/agenda/2015/06/has-global-trade-peaked/
10. Meltzer, J. (2011). Gobal Economy and Development. Washington DC: The Brookings Institution.
11. Reich, A. (2017). The effectiveness of the WTO dispute settlement : A statistical analysis. San
Domenico di Fiesole: European University Institute, Department of Law.
12. Riker, A., & David, M. (2014). The Economic Implications of Strenthening Intellectual Property rights
in Developing Countries. Journal of International Commerce and Economics , 1-9.
13. United Nations Conference on Trade and Development. (2016). TRADE AND DEVELOPMENT
REPORT, 2016: Structural transformation for inclusive and sustained growth. Geneva: United
Nations Conference on Trade and Development.
14. Vickers, B. (2012). The Role of the BRICS in the WTO: System Supporters or Change Agents in
Multilateral Trade? The Oxford Handbook on The World Trade Organization .
15. Wilson, J. (2013, November 15). Multilateral, regional, bilateral: which agreement is best? .
Retrieved October 6, 2017, from The Conversation: http://theconversation.com/multilateral-
regional-bilateral-which-agreement-is-best-19664
16. Wolfe, R. (2013). First Diagnose, Then Treat: What Ails the Doha Round? Sam Domenic di Fieslo:
Rober Schuman Centre for Advanced Studies, European University Instiute.
17. World Trade Organization. (2013, December 07). Days 3, 4 and 5: Round-the-clock consultations
produce ‘Bali Package’. Retrieved October 6, 2017, from World Trade Organization:
https://www.wto.org/english/news_e/news13_e/news13_e.htm

18. World Trade Organization. (2017, October). Understanding the WTO: Settling Disputes A unique
contribution. Retrieved October 6, 2017, from World Trade Organization:
https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm