When the General Agreement on Tariffs and Trade (GATT) was first agreed by 23 original contracting parties in 1947, there were no guarantees that the rules would endure. Today, WTO membership stands at 164 countries — representing collectively, more than 98 percent of global trade. But for an institution to endure, it must remain relevant.
What’s important about these summits is not the prepared statements delivered at the main table, but the frank discussions and informal meetings that take place in the corridors and meeting rooms around the main conference.
New WTO members Afghanistan and Liberia are cheerleaders for other countries seeking WTO membership, including Iraq, Somalia and Timor-Leste. These countries are resolved to rebuild their post-conflict economies and believe that making commitments in the WTO will undergird necessary, but difficult, economic reforms at home.
WTO Ministerial Conferences are held every two years. They aren’t really strategy retreats, like the management team off-sites that companies hold, but maybe they should be.
It would be a costly error to take the WTO for granted. It is one of the indispensable international institutions that underwrite the functioning of the world economy. Yet, the institution and its rules need to keep pace with the evolution of world trade. Without change, the WTO is at risk of not remaining fully relevant.
In 1944, the global economy was in shambles. Forty-four nations gathered in Bretton Woods, New Hampshire, to discuss how to rebuild an economy devastated by protracted depression and two World Wars. From these discussions emerged a 1947 agreement on a lasting framework for post-war commercial relations whereby trade barriers were contained and then gradually reduced over time.
As a new resident in Geneva, I consulted with a number of WTO Ambassadors to the WTO as well as senior members of the secretariat. Several members offered a bottom line value to the WTO: the WTO system is providing essential stability without which business would have far less certainty. Without the WTO system in place, economic activity — both cross border and domestic – would be sharply reduced. Anyone who cares about either the level of economic activity for a country or for a company should pause and consider that truth.
WTO members voluntarily agreed to rules to create a more secure and predictable trading environment for their traders. By and large, members comply with these rules so that others will as well. But when one member believes that another is not complying, the WTO has procedures for settling disputes.