The Globalization Reader, 5th Edition

34 The Future of the Multilateral Trade System – What Role for the World Trade Organization?

Ann Capling and Richard Higgott

[…] As we come to the end of the first decade of the twenty-first century, we live in a period of acute economic crisis – by common agreement, the worst since the Great Depression of the 1930s. The attention of global leaders is focused on providing the necessary fiscal stimuli to reboot the world's major economies and securing the necessary level of global institutional reform to both underwrite and regulate the global banking system. But the WTO is under duress. Its problems were identifiable prior to the eruption of the financial crisis, but they have been exacerbated by the current crisis as much as they are part of the current crisis – notwithstanding that, for once, no one thinks that trade is a contributory factor.

The dramatic problems in the financial sector are accompanied by a dramatic decline in cross-border trade; indeed, the first such decline since 1982. This has affected all of the world's major economic powers including the wealthy countries of the Organisation for Economic Co-operation and Development (OECD) and the emerging economies, including Brazil, Russia, India, and China (BRIC). In 2008, global trade grew by 2 percent in volume, but the WTO expects it to fall by 9 percent in 2009 – the biggest contraction in trade since World War II. Whereas most members of the WTO appear to have kept the worst domestic protectionist pressures ...