World Trade Organization (WTO) Deputy Director-General Alan Wolff said Monday that he is "decidedly optimistic" about the future of the multilateral trading system and the WTO, despite "serious challenges" ahead.
In a speech delivered at the Washington D.C.-based think tank Peterson Institute for International Economics, Wolff said the WTO delivers benefits through the multilateral trading system that "cannot be duplicated" in plurilateral or regional agreements, highlighting the need to defend and improve the system.
"What makes the WTO stand apart from many other international arrangements is that it creates enforceable obligations," said Wolff, who became deputy director-general on Oct. 1, 2017. "Global commerce can only thrive with certainty."
Wolff, who was deputy special representative for trade negotiations in the administration of former U.S. President Jimmy Carter, said the failure to maintain and improve the multilateral trading system can result in its deterioration or worse in these times of serious stress.
"Without the rule of law there is chaos," Wolff said.
Wolff pointed out that no member has left the WTO since it was founded on Jan. 1, 1995 as the successor to the General Agreement on Tariffs and Trade (GATT) that was formed after World War II, and 22 countries currently seek to join it.
"There is a common effort to improve the system, not scrap it," he said.
Whereas the GATT mainly dealt with trade in goods, the WTO and its agreements also cover trade in services and intellectual property, according to its official website. The birth of the WTO also created new procedures for the settlement of disputes.
Several "core challenges" have emerged over the nearly 23 years that the dispute settlement system has been in place, Wolff said. These include the fact that a number of disputes in recent years have been more "complex and complicated" in terms of the measures involved and legal arguments, more panel reports are being appealed, and more claims of non-compliance have been filed.
Wolff also noted that a decision can be blocked due to various reasons, ranging from opposition on substance to holding an item hostage as leverage to gain something else.
"No one gets anything, unless they bypass the obstacles to progress," Wolff said, referring to the consequences of hostage-taking. "That is itself a major threat to the multilateral trading system."
Wolff said that, despite numerous challenges, he believes an effort to maintain and improve the system will succeed.
"It may take more time than would be ideal, but it will be achieved," he said.
Arguing "there is growing recognition that reform is needed," Wolff noted that leaders of the Group of 20 (G20) major economies reached consensus at their summit in Buenos Aires on Dec. 1 to support the "necessary" reform of the WTO to "improve its functioning"; and the meeting of the 164 WTO members in a formal session in Geneva last week "authorized a process of consultation" on what should be done in the way of reform, if reform is to take place.
"The multilateral trading system embodied in the rules and processes of the WTO is part of the firewall against a return to appallingly bad times, an assurance that those experiences are not to be repeated," Wolff said. "It is a place where the liberal world trading order can be nurtured and improved. It holds great promise. It is a garden to be tended."
