Dhaka, Bangladesh
At a critical moment, the WTO loses its leader

Off the Track

At a critical moment, the WTO loses its leader

Brad Glosserman

In a stunning move, Roberto Azevedo, head of the World Trade Organization, announced last week that he would resign his post a year early. Azevedo’s decision reflected mounting frustration over an increasingly hobbled organization, constraints that have assumed larger significance as the world battles the worst trade crisis since the Great Depression. It is also a cri de coeur to rally its members and supporters for one final attempt to restore the WTO’s relevance and capacity. The record of the last two decades does not inspire much hope or confidence, but it is a battle that must be fought. Azevedo’s second term as WTO director general was to expire in September 2021. But next year the 12th Ministerial Meeting of the WTO will also be held — originally scheduled for next month, it has been postponed a year because of the COVID pandemic — and Azevedo rightly worried that selection of a new director general would overshadow critical discussions about WTO reform. “Instead of focusing all efforts on the search for compromise … we would be spending valuable time on a politically charged process that has proved divisive in the past,” he warned. Reform is essential. The WTO has done yeoman’s work since it emerged in 1994 as the successor to the General Agreement on Tariffs and Trade. In the 25 years since, world trade has quadrupled in value and grown 270 percent in volume; global GDP, in contrast, has expanded “just” 200 percent. Trade growth has been stimulated in part by a steady decrease in tariffs, which have been cut substantially, going from 10.5 percent to 6.4 percent (on average). Reduced tariff protections have gone hand in hand with domestic reforms that have been instrumental in lifting hundreds of millions of people out of poverty. A recent agreement among WTO members to facilitate border procedures is reckoned to increase trade by an additional $1 trillion annually. That record is obscured by the WTO’s ever more apparent failures. Protectionism is on the rise; in the last year $747 billion in global imports were subject to new restrictions. The group’s 164 members have struggled for nearly two decades to conclude the Doha Development Round, launched in 2001 with an emphasis, as the name clearly denotes, on promoting growth in less developed economies, which comprise two-thirds of WTO membership.

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