During the first half of the 20th Century, the world had witnessed some disruptions including two large-scale wars. International trade suffered most, particularly in the run-up to and as an aftermath of the Great Depression of the early 1930s. There were no multilaterally agreed rules to arrest that decline. After almost a century, are we going to witness a similar scare?
Following the Sino-American trade wars, which have been continuing over the last few years, Brexit, the US withdrawal from the Trans-Pacific Partnership and India’s withdrawal from the Regional Comprehensive Economic Partnership of Asia and the Pacific, this question is in the mind of every right-thinking person across the world.
The COVID-19 pandemic and its likely aftermath in further disrupting the existing geopolitical and geo-economic equilibriums (howsoever imperfect that they may be) along with a largely dysfunctional World Trade Organisation (WTO), which is unable to discharge one of its most important functions - dispute settlement - the world is likely to witness many more traderelated disruptions. Recent export restrictions on essential medicines and other medical equipment and food items by many countries provide some directions towards an emerging ‘beggar-thy-neighbour’ world.
Can humanity afford such a disruptive world? While a simple answer is ‘no’ and there is hardly any effort on the part of global leaders (there are no statesmen) to stem this rot, the onus for reviving the multilateral trading system lies equally with the global trade community at large. That calls for the only multilateralism to survive the on-going onslaught against it but also and more importantly under a ‘new normal’ of polylateralism (where governments, businesses and civil society work together in a structured manner).
A rules-based multilateral trading system is an absolute necessity for this to happen in a balanced and equitable manner. This is because there is no denying the fact that it is this system that underlined peace, security, stability and prosperity in the post-war world.
Therefore, other than providing a historical narrative of the multilateral trading system under the General Agreement on Tariffs and Trade (GATT) and its successor - the WTO - this Discussion Paper analyses a forward-looking agenda for the multilateral trading system to reinvent itself in a new avatar. This agenda is based on a series of webinars, organised by CUTS International, which was held across the world virtually during April-September, 2020.
It concludes by arguing that while different systems of economic and political governance can co-exist, it is important for the global powers to understand the value of ‘agree to disagree’ and it is the responsibility of the middle and emerging powers to convince them.