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Quarterly issue 4

What’s next for the World Trade Organisation: Andrew Staines

Author: ICAEW Insights

Published: 27 Nov 2020

It has been a major player in the regulation of international trade for more than two decades, but in recent years, the World Trade Organisation (WTO) has not been without challenges. As part of a global panel, Andrew Staines, UK Ambassador and Deputy Permanent Representative (Economic Affairs) to the UN agencies in Geneva, shared with us his perspective on the outlook for the WTO.

How can the multilateral system remain relevant in a changing world? It’s vital that it does because we’re in a time when we need multilateralism more than ever. When you look at the various challenges facing us – whether it’s trade or a global pandemic – globalisation is a key part of the solution and that’s not going to change. In this globalised world, we will need multilateral organisations more than ever to help manage all the necessary cooperation, whether that’s through establishing ways of working or setting global rules.

In short, the classic saying that “if we didn’t have institutions like the WTO, we’d have to invent them” is as true as ever. But the world they now work in is very different to when they were set up. 

For example, when the WTO was established on 1 January 1995, it was a smaller and more homogeneous organisation, and was operating at a time of great optimism about globalisation and open markets – the Berlin Wall had fallen just over five years earlier and the North American Free Trade Agreement had just been signed. 

Since then, the envisaged explosion of trade has certainly come true but the WTO membership has expanded and become less “like-minded”. 

And the nature of trade has changed. The internet barely existed in 1995, whereas e-commerce is now part of our daily lives. This has thrown up a number of challenges and the need for an agenda of reform.

So, from my point of view, we need the WTO more than ever, but it does need to address some of the challenges put in front of it. This is not to say that the rule book should be ripped up. Many of the rules still work well. But we do need to look for incremental reforms. 

For example, the WTO membership has launched a number of joint initiatives to take forward trade negotiations in smaller groupings, including in e-commerce. There has been an important debate on how the WTO rules can support us to build back better after COVID-19. Back in March, one of the larger members announced that it would begin to forgo special and differentiated treatment. This shows the system can accommodate a much more graduated set of steps to reform.

Many of the challenges are, first and foremost, political. What we need is a series of political steps to restore trust into the relationships between members, particularly the largest countries. We ultimately need to show citizens how beneficial the system is and earn their willingness to buy into it.

The WTO has undoubtedly delivered a major economic advantage to its members, from the smallest to the largest, and that will continue if we build a way to work together.