The Quest for the Future of the WTO

The Quest for the Future of the WTO: From the Perspective of World Order

By Jingxia Shi[1]

This is, in my view, the place and role of the WTO and its legal order in the international legal order: a catalyst for international mutual respect towards international coherence and even for increased global governance, which I believe is needed if we want the world, we live in to become less violent, be that social, political, economic or environmental violence.

—Pascal Lamy, former WTO Director General

 

Introduction

The World Trade Organization (WTO), with its 166 member states representing over 98% of global trade, plays a vital role in global economic governance. However, as the 21st century unfolds, the WTO has encountered unprecedented challenges, including the stagnation in its negotiation functions and the paralysis of its Appellate Body. The 12th Ministerial Conference (MC12) in June 2022 succeeded in pulling the WTO back from the brink of chaos. More recently, the MC13, which concluded in Abu Dhabi on March 2, 2024, set out a forward-looking reform agenda for the Organization. Among the outcomes was a ministerial decision to rejuvenate the dispute settlement system to full functionality by 2024, as well as commitments to persevere in negotiations across areas lacking consensus. Despite the progress made in these ministerial conferences, the lingering question remains whether these efforts are sufficient to reverse the Organization’s perceived decline. The impetus for reform has intensified, highlighting the critical need for revitalization if the WTO is to maintain its central position in the architecture of the global trading system.

As articulated by Professor Michael Reisman, international law resembles an archipelago, with various islands representing different legal domains. Among these islands, the WTO law is not isolated but rather an integral part of the broader legal landscape. He further emphasized that the contemporary global landscape to which international law applies has evolved significantly from the historical context in which traditional international law principles were established. The 21st century has witnessed a profound transformation of the WTO, influenced by a confluence of geopolitical, geoeconomic, and technological advancements. Matters are complicated by rising protectionism and trade frictions, as well as the need to respond to rapid structural changes in world trade, which add high uncertainty and aggravate the multilateral trading system.

Law is frequently conceived of as fixed and stable. But law is actually a dynamic process, and its components are far less certain than popularly supposed. International law is particularly volatile. The WTO’s future is deeply intertwined with broader themes of global governance and international cooperation. In a rapidly changing world, forging cooperation is crucial to propelling global trade forward and sustaining a stable and predictable trading system that underpins the world order. More than a dozen issues facing the WTO are identified in the literature. This Essay focuses on examining the WTO crisis and reform, with specific attention to enhancing negotiation processes, improving dispute settlement mechanisms, and addressing factors such as U.S.-China competition, security, and societal concerns. The argument follows a guiding framework for envisioning the WTO’s future within the world order. It is vital for the WTO to adapt to evolving dynamics while upholding the principles of multilateralism, cooperation, and inclusivity in order to shape the future of the global trade while respecting and promoting human dignity.

 

I. NEGOTIATION FUNCTION

Acting as the forum for trade negotiation is one of the WTO’s three pillars, with an overarching objective to make trade flows as smooth and predictable as possible. Since the WTO’s inception, however, the negotiation has faced prolonged stagnation in updating trade rules apart from sporadic agreements. Extensive analysis has sought to understand why the successful multilateral trade negotiations during the GATT era no longer worked for the WTO. Factors contributing to this conundrum include the WTO’s expanded and diverse membership, the single undertaking package, and the absence of clear leadership.

Given the apparent stagnation of multilateral negotiations, WTO members have turned to alternative approaches to update much-needed trade rules. In recent decades, a substantial portion of progress in trade liberalization has occurred either through regional trade agreements (RTAs) outside the WTO, or open plurilateral agreements (OPAs) within the WTO. OPAs are distinct from the closed plurilaterals such as the Government Procurement Agreement in Annex IV to the Marrakesh Agreement. While the latter confer benefits exclusively to the participating members, OPAs allow non-participating members to benefit by implementing on the Most-Favored-Nation basis where critical mass agreements (CMAs) are reached. Since the MC11 in December 2017, OPAs have been conducted upon Joint Statement Initiatives (JSIs) by the like-minded WTO members on topics of electronic commerce, investment facilitation for development, services domestic regulation, and micro, small and medium size enterprises. The JSIs talks and negotiations are open to all WTO members for participation. By the end of March 2024, more than 150 WTO members had engaged in one or more JSIs negotiations, securing substantial outcomes including the Reference Paper on Services Domestic Regulations (SDR), Investment Facilitation for Development (IFD), to be followed by E-Commerce/Digital Trade.

While JSI negotiations have gained much prominence in recent years, they remain a subject of contention, sparking robust debates concerning their legitimacy, as well as whether and how the new rules would be incorporated into the WTO framework. The JSI proponents argue that JSIs are supplementary to the multilateral negotiation and can contribute to building a more responsive and relevant WTO for global trade. The JSI opponents, including India and South Africa, label JSIs as attempts to circumvent the WTO’s core tenets of multilateralism. In February 2021, India and South Africa submitted a document challenging the legality of JSI negotiations for lacking multilateral mandate. In their argument, they posited that JSIs discussions stand in direct contradiction to the WTO’s foundational principle of multilateralism, undermining the Organization’s unique capacity to ensure that each member has a voice in determining the negotiating agenda. They contended that any agreement negotiated by a subgroup of WTO members should be pursued outside the WTO context (e.g., through RTAs).

Central to the debate are two critical aspects of the WTO framework. One is the “single undertaking” approach, which severely reduced the scope for pursuing a club approach to future rule-making because the WTO was supposed to be the club to end all clubs. The other is the consensus-based decision-making mechanism, which poses considerable challenges, as reaching unanimous agreement among 166 members is an exceedingly difficult task. This method was employed during the WTO’s inaugural round of multilateral negotiations, the Doha Round, with the expectation that decisions would be made by consensus and be binding on all members. The difficulties of advancing under such constraints have become evident, which often lead to deadlocks. This strategy has faced criticism for being a flawed approach, further suggesting a misunderstanding of the original intent behind the “single undertaking” principle as it was applied during the Uruguay Round.

WTO rules exhibit a nuanced stance on plurilateral agreements. Specifically, Article II.3 of the Marrakesh Agreement recognizes plurilaterals listed in Annex IV as an integral part of the WTO agreements, binding exclusively on participating members. Nonetheless, in terms of adding a plurilateral agreement to Annex IV (Plurilateral Agreements), Article X.9 requires that the decision shall be made exclusively by consensus. The firm and ongoing resistance from India and South Africa to the JSIs negotiations, largely due to concerns about diminished influence, has hindered the possibility of incorporating the JSIs outcomes into the WTO framework. Therefore, the negotiating progress in the WTO multilateral negotiation has been scant over the past two decades, with many questioning its continued relevance as they pursue liberalization through bilateral and plurilateral agreements outside the system.

At the recently concluded MC13, the implementation of new disciplines on SDR was eventually declared. However, the topic of investment does not neatly align with the categories of either “goods” or “services.” The feasible way to incorporate the outcome agreement into the WTO framework is to attach it to Annex IV of the Marrakesh Agreement, a process that necessitates consensus among all members.  Unfortunately, attempts to incorporate the IFD text into Annex IV were thwarted by the ongoing resistance from India, in spite of participating members’ arduous efforts. By the end of March 2024, the number of participating IFD members reached 128, with the text focusing on streamlining investment policies. To a large extent, India’s resistance appears to be driven more by political considerations than by legal rationales. With regard to the next step, participant members have again stressed that incorporation of the IFD Agreement into the WTO is critical for the Agreement to deliver its benefits, notably for developing and least-developed members, who are in urgent need of more sustainable investment flows.

The debate on JSIs’ legality as well as whether and how to incorporate the negotiating outcomes is crucial. It impacts the momentum for reforming WTO negotiations and, at its core, addresses the challenge of updating the WTO’s rule-making processes to align with the demands of the 21st century. Professor Reisman submits that international lawmaking can work as well as can be expected. Its problems arise from the nature of the contemporary international social and political systems within which the . That considered, the consensus itself might not be the problem. The problem is its being misused and exploited. However, blocking a consensus is politically costly and does more harm to the WTO as a negotiating forum. This in turn would also undermine India’s objective of reviving negotiations in areas of its interest. A more promising option for non-participants would be to use their leverage to maximize the benefits of the JSIs negotiations for them. To ensure that the WTO membership at large benefits to the maximum extent possible from JSIs negotiations, a multilateral governance framework was proposed. The framework includes openness to participation and future accession by any WTO member, facilitation of participation of developing members, transparency of the negotiating process, and means of protecting rights of non-participants while avoiding free riding.

The WTO serves as the primary instrument for upholding trade order, with negotiation being its essential tool. Failure by the WTO to address contemporary issues like digital trade could lead to perceptions of its increasing irrelevance among members. JSIs offer pragmatic avenues to overcome the challenge of achieving consensus among the diverse WTO membership. The  of plurilateral agreements into the WTO framework demonstrates their alignment with the Organization’s core objectives and their ability to coexist harmoniously. Moreover, JSIs negotiations maintain inclusivity and incorporate a development dimension. For instance, IFD primarily evolved as a collaborative effort driven by developing members, aiming to promote sustainable, high-quality investment within their respective territories.

Professor Reisman observed that lawmaking, though often regulated by law, is a political process and, as such, involves another, indispensable component: power, the capacity and willingness to make a preferential expression effective. It is astutely observed that the acceptance of JSIs as the new norm hinges on political rather than legal considerations. Unfortunately, there appears to be a lack of political will or desire among major players to counteract the obstruction by JSIs non-participants, who hinder the formal integration of JSIs into the WTO’s framework. Ironically, the widely accepted notion that nothing will happen unless the United States, the EU, and China want it to does not apply to JSI negotiations. Despite the active participation of the United States, the EU, and China in JSIs negotiations, including the United States leading in E-Commerce and the EU and China participating in all JSIs, progress in incorporating JSIs outcomes into the WTO rulebook has been stalled due to opposition from India. This calls for a thorough scrutiny, as the power dynamics among major members undeniably shape the revitalization of the WTO’s negotiation function and its reform trajectory, despite India’s apparent role as the main impediment.

Achieving a breakthrough is challenging yet indispensable for breathing new life into stagnant WTO negotiations. Embracing JSIs negotiations is key to charting a positive trajectory for the WTO’s future. It is crucial to acknowledge that the GATT/WTO has operated at varying speeds, reflecting differences in capacity, willingness, and member interests. This inherent diversity should be recognized, and flexibility must be incorporated accordingly. However, if non-participants consistently exploit consensus to impede the implementation of JSIs achievements, negotiations may have to shift towards venues outside the WTO. This would carry substantial implications for the WTO’s negotiation function, challenging India’s argument that obstructing JSIs negotiations is intended to protect the multilateral system.

 

II. DISPUTE SETTLEMENT

Another pressing challenge revolves around the restoration of the full functionality of the WTO dispute settlement mechanism. Historically lauded as the “Jewel in the Crown,” this two-tier system garnered global recognition for its substantial caseload, compulsory jurisdiction, impressive compliance rates, and the authoritative Appellate Body (AB). Perhaps falling victim to its own success, the WTO dispute settlement encountered a fatal turning point in mid-2017 when the United States began blocking the appointment of new AB members, ultimately resulting in the AB’s paralysis in December 2019. The absence of a fully operational two-tier system has substantially eroded the practical relevance of the WTO’s rule-based framework, despite its formal existence.

The core U.S. complaint is the judicialization of the WTO dispute settlement process: AB has been alleged to operate as an international court building a jurisprudence, rather than a body that issues ad hoc decisions to assist WTO members in the resolution of their trade disputes. In addition to these identified procedural issues, the United States accuses the AB of overstepping its mandate, engaging in judicial activism and overreach by issuing decisions that exceed its authority and involve lawmaking. The United States’s block of AB nominations is criticized as a direct “assault” on the WTO which may dismantle the entire dispute settlement mechanism. Various proposals have been put forward to address U.S. concerns. For instance, the EU’s Concept Paper on the WTO Reform includes technical and hortatory suggestions, such as time limits for proceedings and provisions instructing the AB to address issues only when necessary for the purpose of settling a dispute. Canada’s discussion paper goes further by proposing the formal exclusion of certain disputes or issues from AB jurisdiction, along with alternative procedures for specific types of disputes. Additionally, there are suggestions to limit AB dicta, apply a more deferential standard of review, explore options like partial adoption of AB reports or non liquet decisions, and adopt a consensus-minus-one or consensus-minus-two model for selecting new AB members to avoid one or two powerful members’ obstruction of the dispute resolution system. The United States rejected all proposals responsive to its concerns and continued to call for “reform.” During the latest Dispute Settlement Body (DSB) meeting held on March 19, 2024, Guatemala, representing 130 members, once again urged the filling of AB vacancies for the 74th time. The United States reaffirmed its enduring opposition and contended that advocating for the AB’s restoration could potentially hinder collaborative reform endeavors within the WTO. It seems clear that the United States would not agree to restore the AB and a binding dispute settlement system.

Professor John H. Jackson asserted that the WTO marked a shift toward a rule-based system. In retrospect, the AB played a vital role in advancing international trade law by adjudicating cases and shaping trade jurisprudence. Unfortunately, the vision of a robust, quasi-constitutional international court capable of both dispute resolution and jurisprudential development seems to be fading. Multiple explanations have been put forth to elucidate the United States’s steadfast endeavors to undermine the WTO’s judiciary. This Essay endeavors to shed light on several specific observations from different perspectives.

First, the crisis surrounding the WTO’s dispute settlement function is intimately connected to the breakdown of its negotiation function. The disproportionate impact of AB reports somewhat stems from political gridlocks and a nonfunctional legislative body within the WTO. For instance, in U.S.-Shrimp, the AB acknowledged that its perceived activism could be attributed to the absence of clear guidance on navigating the policy tensions between trade rules and conservation objectives. To mitigate the risk of judicial activism, WTO members should actively engage in trade negotiations to establish clear rules that guide the AB in rendering its rulings.

Second, the dispute settlement crisis underscores the intricate connection between international law and domestic politics. As Professor Reisman contends, all law inherently serves as a policy tool, aiming to achieve specific social or economic objectives. Trade law scholars often argue that law and politics are invariably intertwined, with political considerations shaping WTO judicial interpretations. The WTO’s multilateral system transcends the purely legal realm and operates in the political sphere, effectively functioning when members acknowledge that a “might-is-right” approach is detrimental to all. Those familiar with the WTO’s inner workings have long recognized the imbalance between its judicial and political processes. While the call to rebalance WTO political and judicial processes is justified, this recalibration inherently involves a greater role for power dynamics, thereby adding to the complexity, especially amid the escalating geopolitical tensions.

Third, when seen as indicative of the historical ebb and flow between international engagement and disengagement, the actions of the United States reflect an enduring political dimension, with implications for both improvement and deterioration. In this multipolar world, akin to the WTO’s negotiation deadlock, and amidst a shift in economic dominance, the United States finds itself in what can be described as “resigning without leaving.” The emergence of the new multipolarity is particularly evident in China’s role in global trade. It has been suggested that the most significant challenge to sustaining the WTO dispute settlement system stems from the increasing political and economic tensions between the United States and China. An evident result is China’s adeptness at advancing its interests through dispute settlement and securing notable victories. Although the United States maintains the highest success rate among the principal users of the WTO dispute settlement system, it is noteworthy that China has prevailed in several crucial cases against the United States. These victories have imposed limitations on U.S. policies directed towards China. More directly, it has been highlighted that the core issue revolves around the “errors” made by the AB, which have seemingly favored non-market economies to the detriment of market economies, undermined the efficacy of trade remedy laws, and encroached upon the members’ legitimate policy space. These concerns become sensitive in the landscape of U.S.-China rivalry. The United States is thus advocating for amendments that would allow for greater leeway in enforcing trade remedies against imports from members characterized as non-market or mixed economies. This situation links the challenges facing the AB to broader discussions on institutional and substantive reforms within the WTO framework.

Whether the AB is perceived as “activist” or “overreaching” varies based on one’s perspective. The inherent flexibility in treaty interpretation can indeed lead to vastly different and even conflicting understanding, particularly when dealing with undefined, ambiguous, or vague terms. Even beyond critiques of the substance, there is also no consensus as to how the AB should carry out treaty interpretation in dispute settlement. Numerous commentators have scrutinized the AB’s approaches to interpreting specific WTO agreements and its broader engagement in treaty interpretation. However, the absence of authoritative interpretations from WTO members makes it challenging to definitively conclude whether the AB has inappropriately altered the rights of WTO members through its interpretations. Essentially, as pointed out, the AB represents a judicialized system that the United States finds overly restrictive, leading to the crisis and calls for reform to reduced judicialization.

Since the MC12, the United States has initiated informal discussions aimed at reforming WTO dispute settlement to improve its effectiveness, cost-efficiency, and accessibility. Adopting an “interest-based” approach seeking to understand the underlying interests, the discussions do not tie particular members to particular provisions and presumably avoid some hostage taking. The discussion consists of two tracks: a consolidated text and the appeal/review mechanism. The draft text, known as the Molina Paper, is named after Mr. Marco Molina, who convened these informal discussions over the past year. In an unexpected turn of events, just a week before the MC13, the Guatemalan government dismissed Mr. Molina without providing a reason,  complicating the ongoing efforts to secure a dispute settlement reform agreement at the MC13. The Molina Paper contains valuable recommendations. These include increased reliance on good offices, conciliation, and mediation. It also provides ideas on how these methods would function. Additionally, it suggests how panels are to operate, how they are staffed, and how panelists are chosen. Other recommendations focus on conciseness, judicial economy, and maintaining a prima facie case. The Paper emphasizes that decisions should not be considered binding precedent. Transparency is also highlighted as an important factor. However, the proposal for adopting a negative consensus for all DSB decisions is considered too radical. Following the MC13, WTO  members agreed to expedite discussions in a manner that is both inclusive and transparent, to build upon the existing progress, and to address unresolved matters, including those related to appeal/review mechanisms and accessibility, aiming to fulfill the objectives set during the MC12 by 2024.

What is the path forward? The ideal aim should be to establish a binding dispute settlement system that is applicable to all members. However, considering the intricate issues involved, including concerns about precedent setting in relation to anti-trade defense measures, political national security considerations, and accessibility for developing members, a viable solution may involve offering members the option to choose whether and how to engage with the appeals mechanism. It is possible that the United States supports a shift towards a GATT-style dispute resolution system that is less judicialized, incorporating third-party dispute resolution but maintaining the power to block case filings and the adoption of DSB reports. In this context, members could create a binding, ad hoc appeals system through arbitration, like the Multi-Party Interim Appeal Arbitration Agreement (MPIA), catering to the demand for voluntary appeals. Designing the specifics of this flexibility necessitates careful consideration. It is worth noting that this flexibility may result in the fragmentation of the dispute settlement mechanism, though it is still a preferable alternative to a resurgence of great power politics in dispute resolution, which could have potentially catastrophic consequences.

 

III. A WORLD ORDER WITH A FUNCTIONAL WTO

The phrase “world order” implies a degree of predictability, or patterned regularity, in interstate relations. Historically, all enduring international orders have relied not only on a stable power distribution but also on some basic consensus among nations on principles of conduct. As new global powers emerge, the world order becomes more volatile and complex, challenging the traditional dynamics of global markets and trade governance. The rise of multipolarity does not necessarily foster multilateral cooperation. Instead, it often leads to a diminished efficacy of multilateral institutions, hindered by discord among members over strategies for achieving collective goals and distributing responsibilities.

This landscape of multipolarity, intertwined with the trend of reterritorialization, sets the stage for understanding the current challenges faced by the WTO. It also offers insights that could shape the direction of its much-needed reforms. Currently, the WTO faces multifaceted challenges beyond negotiations and dispute resolution. The escalating geopolitical tension between the United States and China, coupled with heightened national security issues and diverse societal concerns, complicates the management of the WTO’s reform agenda. This Essay makes the case that the effectiveness of WTO reform hinges crucially on the vision and collaborative efforts of leading powers, especially the United States and China.

The compatibility of China’s trade practices and economic structure with the liberal international order has been an ongoing inquiry. The Marrakesh Declaration advocates for a multilateral trading system grounded in openness and market-oriented policies. However, WTO rules fall short in reflecting the varied economic systems of its members and do not explicitly endorse any particular economic model. Consequently, WTO rules are often seen as insufficient in countering unfair trade practices stemming from non-market economies. The United States contends that its unilateral measures aim not at protectionism but at safeguarding national security in the long term. Thus, the current U.S. trade policy is perceived not as a retreat from global engagement but as a strategic move to balance domestic and international mechanisms. This approach seeks to reformulate trade norms and address the competitive challenges posed by China effectively. and address the competitive challenges posed by China effectively.

Over time, the WTO system has evolved with a focus on market-oriented economies, implying that the advantages of membership are closely linked to embracing market capitalism. For China to demonstrate a stronger commitment to free trade and multilateralism, it is essential to rigorously adhere to WTO rules, further deepen domestic reforms and openness, and eliminate trade-distorting subsidies. Such actions will not only be advantageous for China but also play a significant role in fostering a more predictable, equitable, and open international trade landscape. A more durable approach to address China’s trade practices, which may be protectionist or otherwise problematic, involves leveraging international trade rules to guide China towards a more market-oriented path. Despite prevailing skepticism regarding China’s commitment to compliance, an examination of cases filed against China indeed reveals a relatively positive record of adherence to WTO obligations. The WTO has thus far served its purpose effectively as a forum to enforce China’s trade obligations. On the occasions when the WTO has ruled against China, the Chinese government has willingly complied with the decision and usually altered its laws or regulations to comply with WTO rules.

Moreover, it is crucial for the United States and China to collaborate in driving positive outcomes for the WTO reform. While challenging, such cooperation is mutually beneficial. On a global scale, globalization has been a key driver of world affairs for decades, yet its dynamics have proven to be more complex and less predictable than previously thought. Economic globalization has inevitably led to interdependence among nations. For instance, a halt in China’s export of rare earths can shut down factories in Japan, subsequently disrupting supply chains for a vast array of products and components in various countries. This chain effect can lead to unemployment, labor unrest, and even epidemiological issues elsewhere. Addressing these global challenges necessitates a global solution, at the heart of which lies the cooperation of major powers like the United States and China.

Contemplating the realities of international affairs and the rapid changes underway, a simplistic view of the 21st century as merely a struggle for dominance between the United States and China may be reductive. Such a perspective does not adequately capture the nuanced forces shaping geopolitical dynamics. Although the U.S.-China rivalry poses significant challenges to the global trade order, the notion of deglobalization may be exaggerated. Indications of reglobalization are evident, as highlighted by the 2023 World Trade Report, which underscores the benefits of diversifying trading partners, bolstering resilience, and reducing the likelihood of economies leveraging trade policies against one another. Central to the reglobalization effort stands the revitalization of the WTO, not its dismantlement. The effective WTO reform demands collaborative action, with leading powers at the forefront, steering the initiative.

Despite escalating mistrust and antagonism, the United States recognizes the economic interdependence and shared interests with China in tackling critical global challenges, such as climate change, health security, global macroeconomic stability, and emerging risks from artificial intelligence. China should similarly recognize this interdependence. In acknowledging the necessity of coexistence and collaboration to avert a new Cold War, both nations must responsibly navigate their competition while fostering a stable global order. Moving from a mindset of decoupling to one of derisking could signal a willingness to accommodate and provide a constructive framework for cooperation on WTO reforms.

Furthermore, the WTO is confronted with crises stemming from non-trade issues like economic inequality, development stagnation, climate change, and environmental sustainability. To align more closely with the global community’s interests, the WTO must aim to achieve its economic objectives while being mindful of other crucial goals and values, such as poverty reduction, environmental conservation, and public health promotion. Concurrently, maintaining transparency, inclusiveness, and public participation is essential for the WTO to retain its relevance and legitimacy as it strives for an improved world order. This also necessitates a concerted effort, openness to innovative ideas, and a dedication to addressing the pressing challenges, ultimately promoting global prosperity and safeguarding human dignity.

 

Conclusion

The international trade order, underpinned by the WTO system, is a global asset that plays a crucial role in fostering a more secure, inclusive, and sustainable world. Beyond generating economic prosperity, a key purpose of the trading system is to maintain peace and stability by preventing the use of trade policy as a conduit for political hostilities. All members would face severe consequences if the WTO continues to diminish in its central role in the global trade order. However, for multilateralism to be effective, domestic politics must either support it or, at the very least, not hinder it. Consequently, the current impasse in WTO negotiations and dispute settlement is not solely a trade issue; it reflects a trend of inward-looking domestic policies that overlook the imperative of international cooperation. This trend risks tarnishing the global trade environment, stalling reform efforts, and eroding the long-term framework that upholds the rule of law in trade.

In another aspect, the WTO’s stability is threatened by the rising significance of geopolitics. As a member-driven organization, the WTO’s essence lies in the members’ collective action. Therefore, the primary challenges reside not with the WTO itself, but among its major members. The inability of the major players, particularly the United States and China, to cooperate puts the WTO’s effectiveness at risk. For a better future, cooperation is not a choice but a necessity. Members should jointly seek out ways to reduce trade’s potential harm and maximize its benefits. This pursuit of balanced and beneficial trade relations holds the key to global governance, which should be embraced rather than disregarded.

The 2023 World Trade Report illustrates that trade has been a key factor in promoting security and peace, driving poverty reduction, and serving as an essential instrument in combating climate change. In the pursuit of more secure, inclusive, and sustainable economies, reglobalization emerges as a far more efficient strategy than fragmentation in addressing global challenges. A reformed WTO, equipped with contemporary trade rules and an efficient dispute settlement mechanism, will play a central role in this process. Such a framework contributes to global stability and predictability in trade relations, which, in turn, stimulates economic growth and prosperity, thereby reinforcing a stable world order.

[1] Jingxia Shi is Wu Yuzhang Chair Professor at Renmin University of China Law School.

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