Pradeep S. Mehta | Amid Tariff Crisis, The World Trade Organisation Has To Be Revived Now

The World Trade Organisation (WTO) is on a ventilator, worsened by the US trade tantrums. Other than the US trade actions, that has been the case for the past several years. Of late, some attempts are being made to revive its functions, which include a number of middle powers. Alas, India is not one of them, though it should. Sceptics may say that the world is yet to see a large-scale disruption in cross-border trade, as happened a century ago, but the larger issue is about the predictable delivery of global public goods. Otherwise, there will be further erosion of trust among the comity of nations.

It took many years of intense negotiations since the Havana Charter of 1948 to shape what we see as the WTO today. For its smooth functioning several institutional mechanisms were put in place. Most importantly, the WTO agreements have many built-in agenda so as to make incremental progress in all areas, including agriculture, industry, services and intellectual property rights.

Unfortunately, from the very beginning, instead of focusing on its built-in agenda and implementation concerns of existing agreements, its members, particularly the rich countries, were more interested in introducing many new issues, putting the Global South on the backfoot. That turned the organisation into essentially a battlefield between the North (the rich countries) and the Global South.

Such differences got more manifest during the Doha Round of negotiations.

This is primarily because the nature of cross-border trade has changed significantly over the years. Today, almost 70 per cent of trade in goods are actually trade in tasks.

For the last several years, many trade experts, including Pascal Lamy, former director-general of WTO, have argued that this changed nature of trade, forced by an increasing level of turning agriculture and manufacturing into “services”, has called for a new-generation multilateral trade agreement.

Similarly, Ngozi Okonjo-Iweala, the current DG of WTO, in a signed article on September 4, 2025 in the Financial Times, has pleaded: “WTO members should use the present crisis to tackle the problems they feel bedevil the system”. Since the global financial crisis of 2009, members are arguing that trade in the 21st century cannot be governed by an agreement which was arrived at in the 20th century.

Therefore, the moot question is: will the WTO members be able to arrive at a new generation trade agreement balancing the interests of its members? It is difficult, but not implausible.

What is urgently needed is systemic reforms of the WTO as an institution. Fortunately, in July this year the Facilitator of WTO Reforms, Ambassador Petter Ølberg of Norway, has put forward a set of proposals for this purpose to the WTO General Council. In doing so, he said that the goal was to “distil and narrow down” the wide range of views expressed into “practical, well-structured options” for consideration at the WTO’s 14th Ministerial Conference to be held in Yaounde, Cameroon, in March 2026.

According to Ambassador Ølberg, there are three indicative tracks of WTO reforms -- governance (institutional issues), fairness (level playing field and balanced trade), and the “issues of our time”. Remarkably, they are in alignment with three broad functions of the WTO -- negotiations, implementation, and dispute settlement.

“From the consultations so far, one thing is clear -- we have a wide range of perspectives … Our goal is not to solve every issue now. It’s to identify where ministers can add the guidance needed to move forward decisively after MC14,” Ambassador Ølberg said.

Thus, there is hope. And, this hope was reflected in a high-level panel on WTO reforms organised by CUTS International on the side of the recently concluded WTO Public Forum in Geneva on September 17 on the sidelines of the annual WTO Public Forum. Among other dignitaries, including the ambassadors of some middle powers, Pascal Lamy argued that the nature of trade negotiations is changing from “protectionism to precautionism”, and that should be the single most important factor behind reforming the WTO.

Based on his conversations with a number of ambassadors of the middle powers, trade expert Alan Wolff argued: “Open questions are when and to what extent these WTO member countries will take the organisation forward, which they appear to be on the cusp of doing.”

One may call them a Coalition of the Willing and, among others, it includes Australia, New Zealand, Singapore and Switzerland. Many of them are part of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and very recently they formed the Future of Investment and Trade Partnership (FIT-P).

Therefore, it will be interesting to see how other trading powers, particularly the European Union, the United Kingdom and the Brics group of countries put their weight behind this coalition. At present, there is not much hope about a constructive role on the part of the United States, and already there are murmurs in Geneva about arriving at a Minus America Trade Agreement (MATA).

Time, unfortunately, is not on our side. Unless some concrete progress on reviving the WTO through reforms is made at the forthcoming Yaounde ministerial meet, many WTO members may openly start flouting their commitments to the multilateral trading system and the global trade may witness another kind of race to the bottom.

That will result in a significant dent to global welfare. India needs to change its practice of opposing any reform and take a positive stance for the sake of the global system’s future. All eyes are therefore on India.

Pradeep S. Mehta is the secretary-general of CUTS International, a 42-year-old leading global public policy research and advocacy group. He is also NGO Adviser to the WTO director-general.