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Política Internacional / 08/07/2021


Understand how the World Trade Organization works

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Understand how the World Trade Organization works

Active since 1995, the WTO (World Trade Organization) has returned to the spotlight. The United Nations multilateral body was paralyzed after former US President Donald Trump's accusations of alleged advantages to China and survived 2020 on hard terms, when it became the target of intense demands for reform.

Responsible for the arbitration of international trade, the WTO brings together 164 nations and serves as an arbitrator, monitor of agreements and stage of negotiations. With its virtual stagnation in recent years, many countries have started to seek bilateral or plurilateral trade agreements.

Critics point out that the organization has failed its development agenda by failing to find a solution to differences over issues ranging farm subsidies to intellectual property rights.

With the economic paralysis generated by the Covid-19 crisis, the agency remained almost inert amid uncertainty about the future of global supply chains.

Still, the WTO remains active. In February, Nigerian economist and former finance minister Ngozi Okonjo-Iweala was unanimously chosen to head the agency after the departure of Brazilian Roberto Azevêdo, who stepped down in August 2020, a year before the expected end of his term. .

Although contradictory, the WTO reform hypothesis is already discussed among the most active members. Until that happens, however, understand how the world's leading commercial agency operates.

How the WTO works

In 1995, 123 countries agreed to create the WTO, which succeeded the GATT (General Agreement on Tariffs and Trade), founded in 1948. Its rules started a modern multilateral trading system – an agreement reached via consensus, as well as the great most of your following resolutions.

Since then, all WTO rules have been enforced by individual members capable of imposing retaliatory trade sanctions on violating states. It was not long before the mechanism became popular and nations began to avoid unilateral responses in potential trade wars.

Since 1995, there have been around 500 disputes – all resolved in settlements before moving on to formal litigation. Countries should be aware of the consensus-seeking nature of the organization through the dispute settlement mechanism, even before joining the body.

Still, when members file complaints against others, countries should first try to resolve the impasse via consultations. If it fails, a panel chosen by the WTO Dispute Settlement Body hears the case. The appeals system, however, has been pushed to the brink of rupture after years of US pressure to disable it, as part of a foreign policy orientation not to collaborate with bodies independent of Washington's influence.

The US, the system's most active participant with 124 complaints and a defendant in 156 cases, was already under criticism during the Obama administration when, in May 2016, it blocked the reappointment of a South Korean woman to the Appellate Body. Trump repeated the action in 2019, which prevents the industry hearing appeals. The blockade continues with Joe Biden, who claims presidential transition adjustments.


The US says it is unhappy that the Appellate Body can set legally binding precedents through the decisions – a way of “infringing on US sovereignty”, critics argue.

China is a particular target. Washington challenges Chinese government practices such as supporting domestic industries, import restrictions, intellectual property abuse and other trade policies. Between 2009 and 2017, the US took 25 cases to the WTO – 16 targeting Beijing. The agency decided to win in seven of them.

Under Trump, however, the president denounced Chinese practices and released a report challenging the WTO's ability to deal with them. there, Washington launched its own tariffs and sanctions to retaliate against Beijing – the beginning of an intense dispute that spilled over into the ideological, technological and financial fields.

Doha Development Agenda

Trump has not only affected the functioning of the WTO and relations with China, but also the Doha Development Agenda, stipulated in 2001 to prioritize low- and middle-income countries.

The measure would streamline customs procedures, in addition to making global trade easier and cheaper. By 2015, the goal was that international transactions could increase by as much as $1 trillion. The project had an important advance in 2013, after the TFA (Trade Facilitation Agreement) – the first multilateral agreement since the creation of the body.

Two years later, however, at the ministerial meeting in Buenos Aires, Argentina, the agreement did not go forward. India blocked an attempt to reduce fishing subsidies, influenced by Trump, and members characterized the meeting as a “failure”.

Negotiations continued at the base.

s of multilateralism, in subsets of WTO members – a simplified model, but which did not carry the weight of a robust discussion among the 164 countries.

The WTO has also been the target of criticism different social groups. On the one hand, farmers and labor groups accuse the agency of focusing too much on corporate interests. On the other, environmentalists warn of deregulation, while lawmakers – especially in the US – claim that the institution has failed to deal with what they classify as Chinese abuses.

Issues such as intellectual property, sovereignty and regulation, competition and importation remain at the top of the list of items to review in a likely and imminent WTO reform advocated by Okonjo-Iweala. “I feel I can solve the problems. I'm known for being a reformist," said the Nigerian leader shortly after being elected

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