What’s Wrong with the WTO and How to Fix It
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What’s Wrong with the WTO and How to Fix It by Rorden Wilkinson is not only a bold analysis of the failures of the World Trade Organization (WTO), but also a proposal for how to fundamentally reform it. According to Wilkinson, the primary goal of a reorganised WTO should be to improve humanitarian outcomes—not to increase and encourage free trade. If the aim continues to be on expanding free trade, with the expectation that humanitarian outcomes may follow, the system will continue to disproportionately favor developed states over developing ones, increasing the gap between the two. Hence, Wilkinson’s proposal calls not only for a fundamental rethinking of the WTO as an organization, but also, more broadly, of the entire global trading system.
The first part of the book discusses the failure of the global trading system, at the center of which is WTO’s competitive bargaining. In this context, powerful developed states enjoy a significant advantage over developing nations because they bring to the table more resources, better legal counsel, more experience, etc. As a result, negotiations necessarily involve unequals, thus leading to unequal outcomes. Attempts to reform the system, past and present, skirt this fundamental issue and fail to accept that competitive negotiations will not yield better outcomes in terms of development.
According to Wilkinson, our refusal to acknowledge that the global trading system is fundamentally unfair results, in part, from the way that we speak about trade. Wilkinson asks us to question the language used to describe the trading system, which relies on analogies to natural phenomena, such as the flow of water. By relying on this language, the WTO has become associated with free and open markets, which are then seen as a natural part of everyday life. We largely leave the language and analogies used to describe the global trading system unquestioned, because the concepts underlying the operations of the WTO tend to be highly technical. Lawyers and economists who are involved in WTO cases and negotiations may have a purchase on the actual dynamics of the global trading system. For the layperson, however, the operations of the WTO are not easily understood and need to be interpreted and explained. Therefore, ‘our belief in the inalienable good of freer trade has been such that we have seldom raised questions about the way we have pursued liberalization’ (p. 20).
A fundamental reform of the WTO would require us not only to examine the way we speak about trade, but also to accept that large-scale change is necessary. Wilkinson calls for the WTO to collaborate much more closely with United Nations institutions to implement ‘trade-led development-for-all’ (p.146). A reformed WTO would allow for meaningful knowledge transfer, merging of competencies and real aid for trade. For example, Wilkinson calls for the establishment of a fund administered by the WTO that would provide trade assistance to developing states. The reforms Wilkinson proposes often lack sufficient detail to be directly implementable, but their basic aim is to reorganise the world trading system to more directly benefit developing states.
While developing states stand to gain much from Wilkinson’s proposed changes, it is unclear how these changes would benefit the developed world and the great powers. Wilkinson makes an excellent point that the changes currently on the table do intend to improve outcomes for developing states such as China, India and Brazil. However, these countries are increasingly viewed as great powers themselves, as Wilkinson himself notes. From this perspective, these reforms are still aimed at benefiting the powerful. A more conventional perspective would claim that the impetus for change of the WTO is to accommodate countries who have a claim on great power status. In Wilkinson’s analysis, it is unclear why we should expect change in favor of the smaller, weaker states.
In sum, What’s Wrong with the WTO and How to Fix It is an interesting analysis of the fundamental failures of the WTO. It is an easy-to-read, well-written book that may be adapted to a number of settings, including the classroom. The book provides a straightforward analysis of the failures of the WTO, without being overly long. At the end, it poses a question well-worth asking: How does free trade fit in the conversation on development and humanitarian issues?