From “The WTO is Needed Today as Much as Ever.” Lead Editorial from the Financial Times (May 19, 2020).
The World Trade Organization is under attack, above all by the US, the country most responsible for its creation.
Donald Trump clings to the delusion that bilateral pressure will rebalance trade in favor of American exporters. Yet, as Jeffrey Schott of the Peterson Institute for International Economics notes, the president’s deals “have barely done anything to improve US access to foreign markets”. Worse, his bullying has caused costly retaliation.
The US cannot abolish the WTO. But it can wound it. Indeed, it has already done so by rendering the WTO’s appellate body inquorate. Others are trying to create a temporary substitute. Yet this can only be a makeshift solution.
Worse, the collapse of the judicial function is far from the only peril confronting the WTO. The legislative function, which requires fresh agreements among members.
Again, the delusion has surfaced that the WTO undermines sovereignty. But trade relations always involve at least two governments. If all insist on absolute sovereignty, the security needed by enterprises located in all others disappears. That is why wise leaders understand that binding mutual commitments increase effective sovereignty. Again, the more global the agreements the greater is the security.
If we did not have the WTO, we would have to invent it. Today, that would be impossible. Happily, we only need to make sure it survives, in order to underpin the open global economy we will all need on the other side of the pandemic.
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