It has been a tough decade for the World Trade Organisation. Six years ago the so-called Doha round of multilateral talks collapsed. An attempt to rescue a largely symbolic fragment from the rubble failed: this year, a deal on “trade facilitation” – streamlining border bureaucracy – was blocked by India and a few allies to make a point on an unrelated issue.
But let us not write off the WTO just yet. Several leading powers including the US and EU are discussing ways to ease the legal path for plurilateral agreements – coalitions of the willing making deals among themselves – to avoid the need to secure unanimity across the WTO’s 160 members. This constitutes making the best of a bad job and is an encouraging development.
Nothing benefits the trading system as much as multilateralism, the basis on which the WTO was founded. For one, any pact that does not involve all members is unlikely to be able to win substantive agreement on subsidies, as opposed to import tariffs. Since the effect of government handouts cannot be segmented according to trading partner, accepting constraints on subsidies in a plurilateral agreement would mean handing a competitive advantage to countries outside it.