On November 13th, 2015 the Bretton Woods Committee hosted a virtual conference discussing the WTO’s evolution, current challenges, and future opportunities. The event featured speaker David Shark, Deputy Director-General at the World Trade Organization (WTO), and John G. Murphy, Senior Vice President for International Policy at the U.S. Chamber of Commerce, who offered follow-up commentary and questions. Bretton Woods Committee member Bill Frymoyer, Senior Advisor at Stewart and Stewart, moderated the discussion.
As the WTO celebrates its 20th anniversary this year, Shark reviewed its history and past achievements. Founded on principles of economic cooperation and inclusion, the WTO created a constitution for international trade replacing the previously established GATT (General Agreement on Tariffs and Trade). The WTO’s most notable and unique feature of consensus-based decision-making – which differs from other multilateral organizations like the World Bank and International Monetary Fund which use a quota system for their governance – enables member countries to have an equal voice at the table. Additionally, the WTO provides technical assistance, training, and a formal dispute settlement mechanism, which reached a historic milestone hearing its 500th case this year.
The WTO has substantially promoted global economic growth by increasing trade volume and value. In Shark’s view, developing countries have largely benefitted from the international trading system and have an increasingly important role in the future. Since 1995, developing countries' share of global trade has grown from 27% to over 43% and their share of global GDP has risen from 41% to over 53%. Emerging economies such as China and Russia have joined the membership and become integral players in global trade. Currently, the WTO has 161 members from all over the world representing 98% of the world trade. At the upcoming conference in Nairobi, the WTO is expecting to welcome Pakistan and Afghanistan to its membership.
Shark also noted that while the achievements of the WTO have been significant, an ever-changing and complex global trading system has given rise to more challenges. While the WTO has done much to lower tariff barriers and quotas, the organization finds itself tackling difficult and contentious subjects, such as agriculture. Shark concluded that the future of the WTO and the role it plays within the international trading system will ultimately depend upon its founding principle – the extent to which its member countries are willing to cooperate and deepen their economic integration and interdependence.
Murphy provided commentary on the accomplishments and relevance of the WTO from a U.S. business perspective. Like Shark, he emphasized the significant contribution that the WTO has made to global trade over the past 20 years, in particular to the economic growth of developing countries. He acknowledged some recent accomplishments of the WTO in adopting the Trade Facilitation Agreement (TFA) and working toward the Information Technology Agreement (ITA) and Environmental Goods Agreement (EGA). Murphy also touched upon the global business community’s frustration with the sluggish implementation of the Doha round and hoped that Nairobi would represent a moment of truth for the WTO to move forward with a new or reinvigorated agenda in global trade.
The virtual conference concluded with Q&A from audience participants, where Shark and Murphy addressed questions on the future of Doha implementation, the goals and anticipated outcomes for the 10th WTO Ministerial Conference in Nairobi, U.S. export-import bank legislation, and the role of the WTO going forward as regional trade agreements multiply.
To listen to the full audio of the virtual conference, please click here.