An In-Depth Report on the World Trade Organization's Current Crisis

This report provides an in-depth analysis of the current crisis facing the World Trade Organization (WTO). It explores the historical context, tracing the WTO's formation and its role in global economic cooperation. The report identifies key factors contributing to the crisis, including shifts in global economic power, particularly the rise of China and the resulting trade wars, and the impasse of the Doha Round negotiations. It examines the conflicting interests between developing and developed nations, the lack of consensus on dispute resolution, and the emergence of alternative trade arrangements. The report also highlights the benefits of economic cooperation, such as access to larger markets, raw materials, and technological advancements, while also acknowledging the challenges posed by differing national interests and power imbalances. The report concludes by emphasizing the need for the WTO to resolve its internal issues to restore global confidence and maintain its relevance in international trade.

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Introduction
Owing to the need for international global cooperation, the World Trade
organization was formed in the year 1995 to replace the General agreement on Tariffs
and Trade. Among the reasons why economies feed the need to cooperate economically
include the need to access larger and newer markets, sourcing for raw materials,
international organizational membership benefits such as foreign direct investment,
technical assistance, and access to advanced technological advancements. Further,labor
migration has helped the growth of economies with labor shortage problems. Generally,
economic cooperation is expressed through regional and international trade agreements
that provide access financial and otherwise to developing economies. Until recently, the
World Trade organization‘s reputation has been reputable .However, the organization's
credibility and relevance are questioned on the latest Doha stalemate and the delay in
appointing the organization’s appellate dispute resolution body. Majorly, there crisis is a
result of power shift, different interests for developing and developed nations. Overall,
economic cooperation is important to the modern economies and hence the need for the
WTO crisis to be resolved fast and in the interest of developing and developed countries.
Principle Cause of the Current WTO crisis
Unfortunately, the impasse of the Doha negotiation exposed the cracks in the
famous World Trade organization. Notably, the impasse is attributed to the changing
global economic power balance led by the Chinese economy(Baru,2015). Arguably, the

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Chinese economy is considered the second largest economy in the world after the United
States hence there is a power struggle between the United States and the Chinese hence
the recent trade wars. Noteworthy, on the 1stt day of December 2018, Donald Trump and
XI Jinping announced a trade of the trade war which had been going on between their
two countries for a while. The Chinese were allowed to purchase agricultural produce
from the United States for ninety days pending further negotiations (Cavallo, 2019).The
trade wars between the two largest economies in the world affected the global political
economy hence proof a shift in the global economic power. The two leaders further
power imbalance can be illustrated by the impasse of the World Trade organization to
appoint new members to the appellate body of the organization.The member states failed
to agree on the new membership composition of the dispute settlement body of the World
Trade Organization dispute settlement body (Mcdougall, 2018).
Further, the lack of consensus on the composition of the dispute
resolution body of the organization if proof of disharmony in the organization. Arguably,
the impasses were due to the decision of the United States advocating for more control
over the dislike of other member states. This is a further indication of a power imbalance
in the organization hence threatening the essence of economic cooperation. Arguably,
there is a conflict of interest between the developing nations and the developed
economies. The lack of compromise on the part of the developed economies for the needs
of developing economies has been viewed as a cause for the stalemate in the
negotiations. As of march 2018, the World Trade organization was unable to have a
consensus on the composition of the dispute resolution body or the rules for resolving
disputes.This stalemate is further proof of the organization’s crisis (Payasova et.al,

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2018).This appointment stalemate is causing a lack of confidence in the organizational
activities.The deadlock of opinion among member states is eroding the international
confidence and credibility of the world trade organization to handle global trade
issuesHoekman,.If the same is not resolved fast and amicably, member states might
consider other alternatives to the World Trade organization.
Lack of consensus among the World Trade Organization member states during the
Doha Round Table negotiations in the year 2001 ended in the year 2016 with no
developments on the proposed issues of agricultural subsidies, lower tariffs among other
issues(The editorial Board, 2016).The failure of the Doha negotiations, fourteen years
later has caused a lack of credibility in the World Trade organization hence the rise of
other international alternatives. The emergence of new developing economies has caused
a balance shift in international organizations such as the World Trade organization by
coming up with alternate regional and international trading arrangements. Following the
indecisiveness of the Doha negotiations, some countries have gone ahead and made their
own alternative trading arrangementssuch as the Trans-Atlantic Trade and Investment
Partnership,BRICS and the Trans-Pacific partnership arrangements which are considered
an alternative to the World Trade organization (Baru, 2015).Specifically, the Doha
stalemate has created doubt as to the relevance of the World Trade organization to
international trade. It is important that the organization sorts out its internal woes so as to
restore global and member state confidence in the institution.
Further, the existence of different interest groups among the member states of the
World Trade organization has contributed to the lack of consensus in the Doha stalemate.
Arguably, African member states' interest was not agreeable to the developed countries

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hence a stalemate on the recently ended Doha round table talks (Zhuawu, 2015).It makes
sense that different countries have different needs hence the conflict of interest between
developed and developing countries \Halper,2010.The lack of compromise on the interest
of developed and developing countries has contributed to the current crisis in the World
Trade organization.There is an assumption that developing countries interest are
compromised at the expense of developed nations.It is believed that developed countries
have more weight over the organizational policies and decisions as compared to
developing countries.Lack of consensus on trade liberalization as expression in the failed
Doha negotiations are a prime example of the lack of compromise and conflicting
interests between the different memerstates.The recent stalemate undermines the
creditability of the organization to the world.Further,the stalemate might cause a
diintergration of the member states to seeks workablle solutions to their economic
interests.
Causes of cooperation
Notably, the benefits accruing from membership to economic cooperation bodies such as
the World Trade organization, the International labor organization and the organization
for economic cooperation and development influence the decision of many countries to
join such organizations. Such benefits include preferential trade agreements (World
Trade Organization, 2011).Through preferential trade agreements, there
arefewerprotectionism measures among member states hence international trade is

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encouraged. Through such agreements negotiated by the economic body such as the
World Trade organization,memberstates trading with each other enjoy lower tariffs,
access to large single markets and lower customs among other economic benefits.
Through membership to international trade organizations, member states have access to
single large markets, lower rate of tariffs, free labor movements and technological
expertise among borders. Member states to organizations enjoy such economic privileges
which might not be as advantageous trading with non-member states(Ruddy,2010). These
organizations offer trade liberalization options to member states who are able to grow
their economies. Through economic integration, countries enjoy free market trade thus
boosting their domestic economic outcomes.
Majorly, the sourcing of the market for finished and raw products has led to
international trade which is a form of economic cooperation. Notably, developed
countries source African markets due to the fact that they have better technologies,
manufacturing industries,financial access (Verter, 2017).Equally,African countries
endowed with natural raw materials required for the manufacturing industries in
developed countries to get their market in exchange. Globalization is proof of mutual
interdependence among different countries.The fact that no country is self-sufficient
makes sense for economic cooperation (Sammi et.al, 201).Further, regional and
international specialization has created the need for cooperation economically. This is
because some regions of the world have specialized in different products that other
regions have not hence there is a need for exchange of goods and services to meet
domestic needs(Vjaysari,2013).For instance,OPEC countries produce oil and supply to

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the majority of global countries. The fact that most vehicles in the planet use oil and yet
not many countries are ale to source their own oil needs makes sense for countries to
outsouce oil from Opeccountries.Through the free movement of labor, capital and
technology developing economies are able to source materials they are unable to source
within their economies and grow their individual economie(Kahler2013).
Outsourcing of raw materials and technological know-how is proof of mutual
interdependence which is a form of economic integration.Most African countries export
iron ore, gold, agricultural produce such as cotton and other natural resources to countries
such as China which deal with finished goods. Also, African countries import finished
and manufactured products from china such as machinery,electronics, and textiles. This
importation and exportation of goods is a form of economic cooperation between two
continents of the global economy.Through economic cooperation countries, acquire
products and technological know how they cannotprocess ,invent or develop on their own
hence economic integration. Globalization as a form of economic cooperation enables the
speedy movement of technological knowledge which is necessary for the growth of
developing economies. Economic cooperation expressed through the importation and
exportation of goods and services enables economies to induce efficiency and
productivity through the importation and exportation of technological equipment and
knowledge.Also,developing economies benefit from research and development
conducted by developed countries(Payosova et.al,2018)
Through economic cooperation, poverty levels in countries such as India
have significantly reduced .According to statistics, India as a closed economy in the
1960s and 70’s experienced high poverty levels which began to reduce with increased

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globalization and international trade (Virajasri, 2013).Essentially, economic cooperation
is a form of economic development that can be evidenced by global funds being allocated
to poor countries to fight global challenges such as hunger, climate change, infant
mortality rates among other sustainable goals funding. Through economic cooperation,
countries enjoy foreign direct investment which creates employment opportunities in
national economies hence raising the living economic standards of the countries invested
in. Majorly, economic cooperation has made it possible for foreign countries to invest in
foreign countries.Arguably,it is easier to attract foreign direct investment opportunities
among member states of an economic international trade body hence the motivation
behind the need to cooperate economically among different states.Under regional trade
blocs,countries are ale to bargain collectivitely hence they are able to get better prices and
trading conditions with other countries.Essentially,economic trading blocs such as the
European Union,Comesa offer collective bargaining power to their member states.
Further, the availability of technical assistance,training, and funding are
some of the benefits of economic cooperation.Specifically, member states of the World
Trade Organization enjoy technical help to improve their trading capabilities through the
enhanced integrated framework.Further,through the World Trade organization and the
International monetaryFund, member states with unstable financial position have access
to the trade integration mechanism in the stabilization of their respective balance of
trade(International Monetary Fund,2019).The need to uplift the economic standing of
their member states, some international organizations offer funding for several essential
economic projects such as infrastructure, education to uplift the economic living
standards of member countries. Also, international trade partnership provide technical

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assistance to stabilize member state economies though policy guidelines, provision of
foreign specialized expatriates to turn around the economic downturns in developing
economies of member countries.The fact that international trade organization conduct
global research on educational and development tissues makes them skilled in offering
technical assistance to developing countries that requires economic boost.
Also, the need to strengthen relations among different countries has been
cemented using economic relations.Specifically,the Chinese involvement in construction
and infrastructure in Africa has strengthened the relationship between China and the
African Continent through economic cooperation. The Chinese government has provided
loans, equipment, and construction services to many African countries thereby
strengthening its relationship and influence over most African economies(Davies, N.d).It
can be argued that the Chinese exercise their influence over African countries through
different forms of economic interests. In the interest of economic development,
nationsconsider memberships in economic cooperation bodies regional and international.
Through membership to international cooperation trading blocs such as the Organization
for economic development, countries are able to attract foreign funding which can boost
the economic performance of their domestic economies. Through international
membership of a reknown trading organization, member states get international
recognition that might inspire foreign direct investment by other member states in the
organization. This international reputation y association can open doors to other
economic benefits such as loans and donations thus oosting the economic outcomes of
developing countries.

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It can be said that organizations such as the World Trade organization and the
Organization for economic cooperation and development act as “quality seals”for
member states to consider trading and investing in other member and non-member states
economies(Iglesis,2016).Economic cooperation can be evidenced in
globalization.Specifically,economic forms of globalization include the global flow of
capital,tairiffreduction,immigration and technological exchange among borders
Jones, .This form of cooperation increased the growth of domestic economies. It is
argued that high and middle income countries are the major beneficiaries of economic
cooperation as compared to low income countryEverett,2014).Noteworthy,globalization
has encourages economic cooperation.Through globalization,labor shortages have been
resolved through encouraged migrant laborprograms. There are countries with a largely
aged or young population hence there is labor shortage as a way of curing shortage, some
countries have partnered with other nations through visa or green card programs to
outsource foreign labor to grow their domestic economies Iglesia,2016 .Through
controlled migration programs,human capital is able to move borders and boost economic
development of various economies( Dicken )
Further access to innovation technologies makes economic cooperation
worthwhile. In the ages of closed economies, it took 1000 years for the paper invention to
reach the shores of China(Aslam et.all,2018).Nowadays, due to economic integration
through globalized trade,countries are able to share information,technology faster than
the olden days .This goes to show the need for economic integration at the international
levels.Countries such as China, Japan, and the United States have advanced technological
knowledge and equipment which makes production efficient and productive hence it is

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necessary for African countries that lag behind in technology to engage in economic
arrangements to acquire latest technological advancements for efficient and productive
economy is a motivation for international economic intergration.It is no secret that
deveped countries have superior technology as compared to developing nations.This
makes it necessary for developing countries to trade with developing countries to develop
and acquire advanced technology for etter economic outcomes.Through international
research and development programs ,developing countries benefit from technological
progress hence better economic outcomes for countries that are developing.
Overall, economic cooperation implies international trade,arrangements and
international and regional trade organizations which is in crisis as evidenced by the Doha
negotiations failure and the failure to compose members of the Word Trade organization
dispute resolution body.Largely,there stalemate is attributed to conflicted interest,power
imbalance between developed and developing countries.The world Trade organization is
a global examples of international economic cooperation.The modern term for economic
cooperation is globalization which involves the transfer of goods and
services,labor,technology among borders.The need to access new markets,outsource labor
and raw materials are some of the motivation behing economic cooperatuion.Further,the
association benefits from membership of international trade organization such as the
WTO and the OECD such as funding and technical assistance drives states to economic
intergration.Subsequently,I hold the view that economic intergration is key to economic
growth and so it the World Trade organization despite the crisis.

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