Spiegel: WTO Faces Existential Threat

Free trade adds efficiency to the world’s marketplaces. The WTO’s 164 members make decisions by consensus with the goal of leveling “the playing field between strong and weak countries, between industrialized and developing economies, with the goal of increasing prosperity for all,” reports Martin Hesse for Spiegel Online, but the organization has become less relevant as countries pursue bilateral and regional trade agreements. Threat of a trade war between the US and China is another challenge. The US led in establishing the WTO in 1995, encouraging reduced tariffs and more protections for intellectual property. The US also files more complaints with the WTO than any other country. At the same time, the US threatens the WTO’s Dispute Settlement Body. Members unhappy with that body’s decisions can appeal, but the US blocks appointments to the Appellate Body – if the body loses a quorum, it cannot resolve cases. “That would mean that those countries that lose their cases before the Dispute Settlement Body could avoid compliance by simply appealing the case to a non-functioning Appellate Body,” Hesse explains. “And if rules are no longer enforceable, they lose all meaning.” The largest economies would have more power, and the United States could struggle against rising China. – YaleGlobal