The obsolecence of WTO

Daniel Alt­man exag­ger­ates just bare­ly when he warns of the obso­les­cence of WTO in a Newsweek col­umn in hon­our of this week’s WTO Gen­er­al Coun­cil meet­ing. The Orga­ni­za­tion is get­ting nowhere with the Doha nego­ti­a­tions, unable to make deci­sions, los­ing rel­e­vance as trade bar­ri­ers are dis­man­tled by bilat­er­al agree­ment or uni­lat­er­al deci­sion. Alt­man could add that WTO’s boost­ers have exhaust­ed creduli­ty with their fan­fares of atmospherics.

But Alt­man’s out­look for a WTO-less glob­al trade regime is naive:

The only way for­ward is lib­er­a­tion from the WTO. The major­i­ty of nations can sim­ply leave the obstruc­tion­ists behind and move for­ward with region­al trad­ing part­ners. Even­tu­al­ly, most of the world’s trad­ing nations will arrange them­selves into just a few big blocs. These blocs will be diverse, includ­ing rich and poor coun­tries, since these com­ple­men­tary group­ings often unlock the biggest gains from trade; rich coun­tries like to use cheap mate­ri­als and labor in poor coun­tries, and poor coun­tries like to export their prod­ucts to high-income con­sumers. In fact, the blocs may be so big and diverse that they won’t need to wor­ry about low­er­ing trade bar­ri­ers” Extract from The WTO Is Obso­lete — Newsweek

Been there and done that. It was called colo­nial­ism; it struc­tured world trade between rich and poor coun­tries for about three hun­dred years until 1945 when a few peo­ple with the same lofty aims but more sense than Dr Alt­man agreed that dis­crim­i­na­to­ry trad­ing blocs had achieved nei­ther full growth nor equi­ty but had caused ter­ri­ble con­flict. Would such a world even be pos­si­ble today with­out giv­ing up the ben­e­fits of glob­al­ized sup­ply-chains? Which ‘bloc’ would include Chi­na? India? Indone­sia? Vietnam?

There’s no short­age of ana­lysts who agree about WTO’s malaise but who offer more inter­est­ing and con­struc­tive sug­ges­tions for the future of lib­er­al mul­ti­lat­er­al­ism than Alt­man’s sim­ple-mind­ed block-world. Three of my favorites: 

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