Global trade in a fragmented world

photo_camera PHOTO/FILE - OMC/WTO

Trade is an extremely complex ecosystem involving not only an importer and an exporter, but also other actors in physical and financial supply chains, covering multiple countries and industries. This gives rise to different standards, rules and legal frameworks. 

Since 1990, global trade has quadrupled, and global GDP has doubled. As a result, the number of people living in extreme poverty has been reduced. 

Trade and investment are engines for growth, innovation, and employment. The contribution that a thriving global economy makes to the multilateral system is recognised. But even the strongest advocates of free trade know that for the international system to foster cooperation and competition, and avoid trade or military wars, it is necessary for institutions to create mechanisms to foster cooperation, coordination and even integration, as well as peaceful resolution of disputes. It is clear that the current system is not fulfilling its objectives. Bodies such as the World Trade Organisation (WTO) and others are inadequate, and reform is needed to improve their functioning and drive progress. 

Years and decades without real development of a multilateral system have not only led to paralysis, but have also threatened the effectiveness of specialised international agencies, the backbone of the international system's success. 

The WTO is going through a delicate phase that requires hard work and consensus among its members, as well as the flexibility and political commitment necessary to succeed. All countries and trade actors are called upon to show flexibility and work towards consensus building to overcome the challenges and impasse and to reaffirm the commitment to the principles and objectives set out in the Marrakesh Agreement establishing the WTO, and the strengthening of the multilateral trading system and the commitment to a fair and balanced system embodied in a reformed WTO, ensuring an equitable distribution of the benefits of international trade and guaranteeing the right to development of the least favoured countries. 

Climate change and geopolitical security, epidemics, overpopulation, inequality, hunger, food security, migration or unemployment require collaborative approaches to solve them at the global level, but no global consensus emerges. Some of these problems are interconnected and cannot be rescued through stop-gap solutions. 

A new impetus is needed to revitalise the multilateral system to meet the new challenges, a fresh start that could lead to a review of the agenda not only of the WTO, but of all UN agencies, as well as the role of the Security Council, which would necessarily entail a review of the role and priorities of the UN General Assembly. This could be followed by a modern process of "networking" between the political and development apparatuses of the UN and the other specialised agencies. If this materialises, the process of modernising the multilateral sector would have begun. However, this is not an easy matter, it will take time and the transition of the reform process will not be automatic. 

We are entering a new phase of trade and geopolitics in a fragmented world, to counter this and protectionism. More collaboration, strengthened multilateralism and partnerships are needed. We must also think about building resilience in supply chains as a long-term investment. 

Governments and businesses must work together to invest in new infrastructure, smart systems, climate technologies, education and training. This will not only boost resilience, but also enable inclusive and sustainable growth. Failure to act now could have political, economic or climate impacts, especially in emerging markets and developing countries. 

The WTO's role in setting rules that promote free, fair and inclusive trade and facilitate a transparent and open business and investment environment needs to be strengthened. 

The urgency of a more inclusive and sustainable economy in an increasingly complex world requires a focus on the planet's systemic challenges, favouring collective action because today's problems can no longer be solved by governments alone. New answers and clarity of vision, agility and pragmatism are needed. 

Cooperation is key to driving the change needed to ensure resilience, sustainability and prosperity in the future for all communities around the world.