WTO facing ‘slow motion train wreck’ amid Ukraine war as expert wars of ‘systematic shock’

Therefore the WTO which struggled to survive Donald Trump’s Presidency and the Covid pandemic is now facing an existential threat to its survival.

It comes at a time when the world arguably needs an independent arbiter of trade disputes more than ever due to the fractured global trade as a result of coronavirus lockdowns and the tense geopolitical situation due to the war in Ukraine, experts have stated.

Privately, trade officials and diplomats based at WTO headquarters in Geneva described the disruption that the politics of the war is having on the body’s day-to-day work.

One trade official told Politico a group of Western countries kick off “every single meeting” with statements about the war in Ukraine, and then Russia argues back.

The Western bloc at the WTO, which includes the US, EU and Ukraine, refuse to even sit in the same room as Russian officials during small group negotiations.

This has effectively stalled WTO discussions on fisheries subsidies, agriculture, e-commerce, and investments for development, according to Geneva-based officials.

In an email to Politico, the Russian Mission to the WTO accused Western countries of turning the organisation’s meetings into a “political anti-Russian show”.

However, one EU diplomat defended the Western walkout boycott. 

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They said: “We cannot be in the same room negotiating with them while they are invading and destroying Ukraine.”

The official went on to argue that the war dealt a “huge systemic shock” to the WTO’s founding purpose to encourage the “respect of the rule of law” in the belief that increased international trade “would reduce the possibilities of having wars in the future”.

With the invasion of Ukraine, that premise is “completely coming down”, the official added.

However, there are some who argue that the crisis means that the WTO will have to reform itself from an organisation seeking agreement among 164 members to one based upon small-group or regional deals. 

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Wendy Cutler of the Asia Society Policy Institute, who’s also a former US trade negotiator, said the WTO’s value as a forum will decline as “countries aren’t going to want to spend their political capital trying to reach agreements among 164 members” with very different geopolitical priorities.

Simon Evenett argues that the WTO is more important than ever and its demise is not inevitable.

He said: “Exactly at a time when there are tensions between countries, you need a neutral arbiter.

“The end of the WTO is not inevitable — this will be a human decision. It’s not a thunderbolt from God.”

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