American Leadership is needed in the WTO

Without American leadership, the WTO will persist but will be unable to accomplish much more toward freeing and thereby enhancing the flow of world trade multilaterally through modernization of its rules for the 21st century. And the world will be worse off because of it. That said, the “few successes” Ngozi highlights are worth noting. Formalization of new rules that will reduce domestic regulatory barriers to services trade (of great value to the U.S.) New rules to help the poorest members of the WTO advance economically. A commitment to cooperate on trade action to help end global plastic pollution. And not least, a hard-won extension for another two years of the moratorium on taxation of electronic commerce (though at the potential price of ending this vital moratorium in March 2026 if it is not further renewed then). Perhaps even more significant is a new “plurilateral” accord agreed by 125 members to eliminate red tape and other bureaucratic barriers to domestic and foreign direct investment which could save participating members up to $1 billion a year and boost Foreign Direct Investment. It shows the right way forward for an organization that can no longer afford to make decisions on new rules only when all 166 of its members agree. Only opposition of India and South Africa to anything other than fully multilateral agreements kept this new agreement from being incorporated into the WTO legal framework in Abu Dhabi, so that is the next task. Perhaps more leadership from the United States would have overcome India and South Africa’s myopic obstructionism in Abu Dhabi. Instead, the Biden administration stood on the sidelines — an unfortunate yet unsurprising turn, given years of frequently ignoring the WTO, increasingly flouting its rules, and disingenuously opposing the restoration of an appellate tribunal that would again help the institution enforce its rules on all WTO members (including the United States and China). The administration should reverse course. It should return the WTO to the center of its trade policy and work for the conclusion of more plurilateral agreements — such as the new one on investment facilitation — on crucial issues in the American interest such as services, industrial subsidies, digital trade, technical standards, intellectual property, energy and environmental sustainability, and more.