Buenos Aires is an Opportunity for the WTO

Published on Project Syndicate - Oct. 2017

In a few weeks (December 11-14) trade ministers from around the world will converge in Buenos Aires. WTO’s ministerial conferences take place every two years. But this may be quite special.

WTO ministerial gatherings have never been easy. Deals are always postponed until the very last minute. Spells of reasonableness only emerge after desperate efforts from the hosts. Eventually something, typically wrapped in constructively ambiguous language, is delivered (and marketed for more than its value). But this time ministers may not even agree on lip-service language.

A protectionist sentiment is growing in countries that used to champion trade liberalization. The case of the United States is not unique, but it is particularly worrisome as it used to be the leader of trade liberalization.

Protectionism is a symptom of distributional tensions and assuaging concerns over international trade will require adjusting domestic policies. Admittedly this cannot be achieved from the WTO, let alone by a ministerial gathering. Yet, the WTO itself needs some updating and recalibration to recover its capacity to serve as a consensus building forum.

My article illustrates this point by addressing two dysfunctional working practices that lie at the core of the WTO’s predicament and that could be fixed through updating and recalibration. Finally, the paper proposes that trade ministers could contemplate the creation of an independent policy watchdog, such as those existing in the International Monetary Fund (IMF) and the World Bank. This would engrain a learning culture into the WTO’s day-to-day business, facilitate incremental reforms and avoid wake-up crisis.

In sum, my article argues that trade ministers meeting in Buenos Aires should not paper over WTO problems, because if they fail economic nationalism may shape a new world—and it could be quite an ugly one.