August 11, 2023, 3:02 am
The global trading system, with the World Trade Organisation (WTO) at its core, is being reshaped in ways that may render the system fundamentally different from how we have known it in the past. As unilateral, protectionist and beggar-thy-neighbour policies proliferate, the system is struggling to reclaim its relevance and regain continued efficacy in promoting trade liberalisation and maintaining transparency, certainty and predictability in the world economy. New policy priorities in the post-pandemic era – economic security, climate change, supply chain resilience, sustainable development – plus new geopolitical tensions and economic fragmentation are complicating the challenges facing the global trading system.
Meeting these challenges requires reflection on what the system was designed to do and what it has achieved, then rethinking what the system should look like going forward: a process of repurposing the system and realigning its objectives. Do we want a mechanism to strictly enforce the rules? What policy space do governments need? Where is the boundary of the system? The process of reconstructing the global trading system must be driven by governments collectively, with a genuine and sustained political will for cooperation. The system’s continued effectiveness and legitimacy will require a delicate balance between law and diplomacy working jointly in response to changing circumstances and new challenges.
Content Creator – Australian Institute of International Affairs
