Society problems

It’s not business as usual at the World Trade Organization

national interest

March 11, 2022

The following is an excerpt from ASPI Vice President Wendy Cutler and ambassador Rufus YerxaCommentary originally published in The National Interest.

Vladimir Putin’s brutal invasion of Ukraine was a seismic event for the world’s major democracies, bringing them together in a way that only a few weeks ago seemed unimaginable. A stronger and more unified NATO is an example of this, as is the impressive solidarity between a range of countries in implementing far-reaching sanctions and winning a vote of condemnation at the United Nations.

As the collective will grows to confront the destabilizing authoritarianism of Russia, as well as one of its staunchest supporters, China, what must become of the institutions that enabled their rapid integration into the global economy of Europe? post cold war? The beleaguered World Trade Organization (WTO) has opened markets for Russia and China and granted them equal status in the drafting of international trade rules. Does the WTO continue to drift into irrelevance as Cold War rivalries reappear and divisions between competing economic systems intensify? Or can the market-oriented democracies that created the WTO find a new unity of purpose and forge a common agenda that challenges the growth of authoritarianism and attacks the Chinese economic model?

Critics believe the WTO has made it too easy for authoritarian systems to reap significant benefits while delivering little in return. So far, governments have failed to resolve this dilemma, but recent events have changed this dynamic. In addition to the financial and other sanctions already imposed, Russia’s advantages under the WTO are now under attack. Key countries set to scrap Russia’s most-favoured-nation (MFN) tariff status, a keystone of WTO membership, or completely block imports from Russia despite their rights at the WTO. President Joe Biden has suspended Russian oil and gas imports. Congress is agitating for a complete cut off from the NPF. Canada has already acted, and the United States, other G7 members and the European Union (EU) are about to act.

Revoking Russia’s WTO membership would present a much more difficult path under the organization’s consensus rules, where Russia could block its own suspension. China also would not support an expulsion resolution. But the fact that the expulsion of Russia is even under discussion reveals the depth of the determination to remove Russia from world trade.

Read the full article in The National Interest.