COVER STORY
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The WTO Headquarters in Geneva
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Trade Relations in the USA. It says that the best access conditions that have been granted to one country must automatically be extended to all other participants in the system. This allows everybody to benefit, without additional negotiating effort, from concessions that may have been agreed between large trading partners with bigger negotiating leverage. In case of trade disputes, WTO members may invoke the Dispute Settlement Understanding. Since 1995, 634 disputes have been brought to the WTO and over 350 rulings have been issued. The most recent submission was filed
However, the body has not been able to form a quorum to hear cases since end-2019 and has long been attacked by the USA – even before the current administration – citing infringements of national sovereignty. WTO decisions are typically taken by consensus among all members and ratified by their legislatures. While this has led to criticism about the efficiency and time-effectiveness of the system, the current WTO Director-General Ngozi Okonjo-Iweala recently said in a Financial Times podcast: “We’re a little bit proud that this is one organization where the voice of the smallest member is as impactful and important as the biggest. We don’t have a system where big shareholders decide what happens. There’s equality of treatment.” She also rejected claims that current political developments will cause lasting damage to global trade: “We need to not hyperventilate over the issue of trade policy and tariffs and take a deep breath, because the WTO has mechanisms with which to deal when members have issues with one another… We do have evidence that globalization may have slowed down, but it is still there.”
Instead, she predicts the emergence of “more regionalized supply chains,” especially in the Global South, with regional and bilateral trade agreements: “Even the big ones like the African Continental Free Trade Area are based largely on WTO rules,” she said. “We welcome them.” This is already happening, following recent shocks such as the COVID-19 pandemic and Russia’s full-scale invasion of Ukraine. These were major blows, but it seems that the Trump administration’s apparent aim of enforcing a whole new global economic order will have even deeper consequences. Professor Cédric Dupont of the Geneva Graduate Institute, expert in trade, law and the WTO, says: “The future of multilateralism in trade is clearly in question. Essentially it will depend not on the United States, but on other countries: to what extent are other countries going to continue working together within the WTO? There might be danger for the WTO with an inflationary spiral of customs duties, but maybe it’s also an opportunity for other countries to show this is not how problems should be resolved.”
by China on March 5, 2025 regarding the US decision to
increase tariffs on goods originating from the People’s Republic from 10 to 20 percent. A ruling at first instance can be appealed by either side.
Ngozi Okonjo-Iweala, Director-General, WTO
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Photo: WTO
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