The World Trade Organization (WTO) faces a critical juncture as former chief Roberto Azevedo warns that the future of global trade could be determined outside the organization unless significant reforms are implemented swiftly. According to Reuters, Azevedo emphasized the urgency of reform at a WTO anniversary event, cautioning that failure to adapt could render the WTO obsolete.
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Current WTO Director-General Ngozi Okonjo-Iweala echoed the call for reform, urging members to initiate a comprehensive process in Geneva ahead of the upcoming ministerial meeting in Cameroon. She stressed the importance of crafting pertinent questions to guide the reform process and ensuring it is driven by the member states themselves.
The global trade landscape remains volatile, with markets experiencing turbulence despite a temporary pause in tariffs imposed by U.S. President Donald Trump, which primarily affected countries other than China. The WTO’s challenges are compounded by its consensus-based decision-making process, which has hampered efforts to update rules and resolve the paralysis of its top appeals court since Trump’s first term. Former WTO Director-General Supachai Panitchpakdi highlighted the dire consequences of inaction, warning that a failure to reform could precipitate a trade-led recession more severe than the 2008 financial crisis. He proposed a structured approach involving a month of tariff negotiations followed by targeted discussions to reduce trade barriers and establish new rules.
In a show of support for the WTO, a coalition of 39 countries, including China, Canada, and Britain, called for decisive and collective action to maintain the organization as the cornerstone of a free, fair, and rules-based global trading system. Data from the IndexBox platform underscores the potential economic impact, with global trade volumes remaining under pressure amid ongoing uncertainties.
