by
Susan Esserman and Robert Howse
While providing a moment of high drama, the recent collapse of trade talks in Geneva is not the real threat to the World Trade Organization. The WTO risks irrelevance to the issues of today and tomorrow. Food and energy security, climate change, human rights, terrorism, international crime and corruption are reshaping the global economy and affecting how governments steer trade. The WTO is not grappling with these issues.
New global power politics, the dramatic rise of emerging economies and the diversity and number of WTO members today demand a rethinking of traditional approaches and mechanisms. Traditionally, the WTO has focused on reducing trade barriers at the borders, such as tariffs and quotas. Today, however, regional and bilateral free trade agreements are completing much of this work.
The WTO must now shift focus. The challenges of our times call for a more up-to-date understanding in an interdependent world. In areas such as climate change, the challenge is to coordinate or reconcile domestic policies to promote a common global objective while also avoiding trade barriers.
In this era, when global trade and regulatory issues are intertwined, the WTO should enhance its ties with other international institutions and processes.
The WTO should also move beyond the straitjacket of the "grand bargain" negotiating round, in which progress cannot be achieved unless all countries reach agreement on all subjects. Instead, certain negotiating subjects could proceed separately or in clusters, expediting agreement and making the WTO more responsive to rapid changes in the global economy.
Agreements in certain areas should move forward on a reciprocal basis when a smaller subgroup of members finds sufficient common ground. This approach permits countries seeking more ambitious goals to proceed, even if others, such as China and India, are not ready. Only those countries accepting the obligations would enjoy the benefits, but such accords would be open to other countries that may wish to join later.
The WTO should revamp, at least for some purposes, the outmoded and overly broad distinction between developed and developing countries that determines a country's WTO obligations. It bears little relation to the world of 2008, particularly with the rise of emerging economies like India, China and Brazil.
The WTO should instead consider more creative and appropriate approaches. For example, in the case of energy and food security, whether a particular country is an exporter or dependent on imports may be more relevant than whether it is developing or developed.
Issues of global equity are simultaneously becoming more challenging; the WTO cannot afford to ignore the question of who gains and who loses and the fairness of those consequences. In collaboration with other international institutions, the WTO should begin to evaluate the effects of its agreements on working men and women and vulnerable communities.
The WTO also needs to embrace values of good government--transparency, inclusiveness and accountable decision making. Ironically, the WTO appellate court, its oft-criticized judicial branch, has been the most progressive in this area, opening up the dispute settlement process to amicus submissions of nongovernmental organizations and, most recently, allowing public hearings in disputes where the parties consent.
Whether in tackling subsidies or services, the WTO must take into account newfound questions about the wisdom of broad deregulation. Contrary to the enthusiastic embrace of deregulation that prevailed at the time the last negotiating round drew to a close, the context today is anxiety about inadequate domestic regulation. Consider, for example, Sept. 11, 2001; the financial crises; and health and safety concerns about imports.
Here the public needs to be heard. Mechanisms need to be found to solicit input from stakeholders and draw on the expertise and perspectives of domestic regulators as well as the knowledge of businesses that must deal with regulation.
Embracing this new mission at the WTO may require a revolution in thinking for some officials and diplomats within the organization, but it need not await a rewriting of its charter. As the example of transparency in dispute settlement suggests, incremental change within the existing structure can advance the agenda.
The challenge is not to rebuild the WTO from the ground up but to rethink how the WTO can better address emerging global issues of our time.
Susan Esserman is chair of the international department at the law firm of Steptoe & Johnson and was deputy U.S. trade representative in the Clinton administration. Robert Howse is Lloyd C. Nelson Professor of International Law at the New York University School of Law and co-author, with Michael Trebilcock, of The Regulation of International Trade (Routledge, 1999).Forbes
