The anachronism of the World Trade Organization

Mary Louise Malig*

The 12th Ministerial of the World Trade Organization (WTO) is finally taking place in Switzerland in a moment when this country has banned all flights from the South Africa region and established a ten-day quarantine for all persons coming from this part of the world plus Hong Kong, Israel and Belgium because of the Omicron variant.[1]

Update: Latest news: the 12th Ministerial of the World Trade Organization has just been indefinitely postponed due to closing of borders and travel restrictions in response to the new variant of the COVID-19 virus. The issues raised in this article remain relevant and with a new COVID variant, it becomes even more urgent that the TRIPS waiver be approved immediately.

COVID-19 will not only affect the physical gathering of the WTO but it will also be one of the main issue of discussion because until now, no decision has been taken on this matter in this multilateral organization that has the key to allow the production of generic vaccines and other generic medicines to address the pandemic. India and South Africa presented in October 2020 a “TRIPs waiver,” for the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Even though 105 countries support the TRIPS waiver, including the United States, after more than a year, the WTO has not approved this waiver because a consensus of all its 164 members is needed. More than 5 million people have died since the beginning of the pandemic and until now the WTO has proven to be incapable of putting public health first over profit.

Another issue that will be addressed in this Ministerial will be the long-standing demands of developing countries around the issue of agriculture. Most importantly in this, is the very right to food and to have food security for the peoples of the developing countries and yet the WTO has just given bread crumbs in the form of a measly “peace clause” that allows them to have public stockholding of food for their own populations. It is incredible that in times of deep economic health and food crisis that affects deeply billions of poor people around the world that the WTO resists until now to permanently allow these states to have public stockholding – a policy that governments should be able to use to ensure food security, concretely, that could be the government buying from local farmers, stockpiling and distributing the food to the poor and people in need.

Another key issue that is central for the functioning of the WTO is the Appellate body of the dispute settlement mechanism (DSM) of the WTO. The Appellate body of the DSM is akin to a supreme court but of trade. The DSM is also well known to be what makes the WTO, whose legally binding agreements carry more power in relation to other human rights, environmental or labor multilateral organizations that don’t have compliance mechanisms capable of imposing sanctions to implement their decisions. Even though this Appellate body is very important for the WTO it is not in the agenda of the 12th Ministerial because there is probably a lack of consensus coming into this Ministerial, hence, why risk a public failure even though a fully functioning DSM and Appelate body are critical to the survival of the WTO.

Also, other issues that are strikingly important for the people and nature in relation to trade will not be discussed in this WTO ministerial. For example, the shipping container crisis that is provoking an inflation all over the world and the ongoing trade conflicts among countries like the US and China that despite the departure of Trump continue to unfold. Issues like how WTO rules should change to address the deepening of the climate and ecological crises will not be on the table either.

The 12th Ministerial will be the first to be under the mandate of the new Director General of the WTO, Ngozi Okonjo-Iweala, the first African woman to hold the position. A lot of attention and time is being giving to gender issues which would be welcome if the talk concretely transforms into actual texts and clear outcomes to be negotiated and agreed in relation to gender and trade and even possibly restricting trade of corporations that do not guarantee equal salaries and rights for women workers.

From whatever vantage point you may want to look, neoliberal globalization is in crisis and the WTO Ministerial will waste most of its time in procedural and technical issues without even trying to address these crises that are affecting its own existence.

From a neoliberal global constitution to survival

The WTO was born in 1995 in the middle of the crest of global liberalization. At that time, the Director General of the WTO wanted to establish a global neoliberal constitution. That hubris would be stopped in its tracks by civil society protests and the failure of the Ministerial in Seattle 1999. A part of that “success” of the 4th Ministerial in Doha 2001 was the fact that almost no civil society were allowed entry to Doha. The Doha Ministerial adopted a very ambitious package for negotiation under the single undertaking rule which means that nothing is agreed until everything is agreed. At that time, all neoliberal governments and transnational corporations celebrated the beginning of the Doha Round of negotiations in the WTO, today all of them don’t want to hear about the Doha round because of the single undertaking rule which has made it almost impossible to implement with an agenda that was too big and overly ambitious. It is so vast that it even covers more issues than the Uruguay Round which established the WTO, and that took almost 8 years. For almost two decades the WTO was unable to deliver any agreement under the Doha round until the 9th Ministerial in Bali Indonesia in 2014 where the Bali Package was agreed. In it: the Trade Facilitation Agreement and the “peace clause” for Public stockholding in Agriculture and a number of issues that were aimed to respond to the demands of the Least Developed Countries were adopted. The Trade Facilitation Agreement is considered to be the first ever Agreement produced by the WTO since its establishment in 1995. Some thought that this would relaunch the WTO but the reality showed that the situation of the WTO was going to get more complicated.

The Agreement on Agriculture of the WTO has always inherently had rules that favored the larger agribusiness than the small farmers. It is also almost unbelievable that in a time of need, when small producer countries of the G33 were asking for changes in order to address the urgent crisis of hunger in their countries that all the WTO would offer was a “peace clause” that has so many onerous requirements of information of the country that could even be used against them in the future.

In 2016, President Barrack Obama through his US Trade Representative filed a complaint against an Appellate judge, Seung Wha Chang, for allegedly being biased in his rulings against the cases of the US. The Appellate Body, somewhat like a global Supreme Court on trade, is the final step in this legal dispute process. There are 7 members who are appointed and serve four year terms with a maximum of a second four-year term. These terms are staggered so as to ensure there would always be at least 3 Appelate Body members. Each case is handled by 3 Appellate Body members. At that time, the Appellate Body issued a statement defending Seung Wha Chang and warning of the dangerous precedent that the US was setting where Member countries can interfere with the dispute settlement process. None the less Seung Wha Chang was not reelected to be part of the Appellate Body of the DSM as it normally happens.

Things got worse for the WTO with the arrival of then President Trump in 2017. Trump alleged that the WTO was favoring China over the US and when nominations to fill the vacant positions in the Appellate body from the WTO Membership started coming in for consideration, the USTR blocked every single one of them. The last Appellate Body Member’s term ended last November 2020. Since then the WTO has been working without its more powerful mechanisms.

The 11th Ministerial Conference failed in Buenos Aires in 2017. The next ministerial conference didn’t happen in Kazakhstan because of COVID-19. In 2020 the Director General of the WTO, Roberto Azevedo, resigned a full year before his term ended reportedly because of the tense relation with the US. Now after four years since the last ministerial comes the 12th Ministerial.

Trump was not a thunder in a clear sky but rather the manifestation of a new trend of national capitalism which emerged in several countries to respond to the economic crisis of 2008. Right wing political sectors in several countries started to criticize globalization from a nationalist perspective. They didn’t want to end neoliberalism but to apply neoliberal rules only when they were going to be favored by them. A combination of nationalism and neoliberalism a la carte gave birth to a bullying capitalism in the United States.  The slogan of Trump was “America First” and his practice was “my way or no way”. This tendency of national neoliberalism a la carte continues in various forms and degrees even after the triumph of Biden and in other parts of the world. After the crisis of 2008 all neoliberal governments in the most powerful economies want to keep or establish some safe guards in relation to global neoliberal rules. Nobody in their right mind advocates now for a global neoliberal constitution. The pandemic has reinforced the presence of the state in the handling of sanitary and health crises and its repercussions in national economies.

These national tendencies explain why even after one year of the Biden administration that has helped to unlock some issues at the WTO like the elections of the Director General, continues the crisis of the global Supreme Court of trade.

The TRIPS waiver[2] has made more evident the crisis of the WTO. The proposal of India and South Africa where the Omicron variant has appeared calls for the suspension of patents, copyrights, industrial designs and trade secrets that are needed to combat COVID. The supporters of the waiver argue that current TRIPS provisions on compulsory licensing are too time-consuming in times of an ongoing global sanitary and health crises. “The UK, Norway, Switzerland and the EU – including Germany – are still selfishly blocking the TRIPS waiver while other countries continue to waste time and prevaricate. Pharma companies have also behaved shamefully – pushing up prices, monopolizing intellectual property, blocking technology transfers, and lobbying aggressively against measures that would expand global manufacturing to line their pockets” says Amnesty International’s Secretary General Agnès Callamard. In a recent statement Biden said that the discovery of the new variant Omicron demonstrates that the pandemic will not end until the entire world has equal access to vaccines[3].  This is common sense, but not for the WTO that is tied to anachronistic rules.

There are several other issues to be addressed at the 12th Ministerial such as the Draft Agreement on Fisheries Subisidies, Special Session of the Committee on Trade and Environment and an agenda item on advancement of gender equality and women’s economic empowerment within trade, amongst other agenda items.

Already, the text that the chair of the WTO’s agriculture negotiations, Ambassador Gloria Abraham Peralta (Costa Rica), circulated last 23 November is eliciting plenty of dissatisfied reactions. Many have called her biased and for good reason as she “proposes to reconsider the mandated permanent solution on public stockholding”[4] which “effectively, the chair appears to have permanently undermined the permanent solution on PSH programs for food security for developing countries, despite demands for an outcome at MC12 by the G33 group of developing countries as well as the African Group, said people who asked not to be quoted.”[5]

The WTO is lost in its labyrinth. For the magnitude of the multiple crises we are facing all the items in the 12th Ministerial agenda, with a couple of exceptions, are almost irrelevant. The WTO is more attached to its neoliberal rules than to reality. The WTO wants to continue with business as usual like we were in the nineties. The crisis of the WTO is the result of the inability of free trade rules and its institutions to respond to the new situation. These rules were developed for a period that is gone. Now the pandemic, economic, environmental, migrant, geopolitical and social crises need new approaches and rules. The WTO should be opening a participative discussion on these new challenges and looking at how to reshape trade and investment rules to address these systemic crises. But, that will not happen because the WTO has become an obsolete institution that is more attached to corporate interests and free trade rules of the past than to the present needs of countries, people and nature.

The debate around these new rules and institutions has to start outside of the WTO. With the participation of civil society, workers, indigenous people, women organizations, peasants, academics, public officials and others as we need to start the discussion of the real problems linked to trade and investment without the straight-jacket of free trade. For example, to avoid the collapse of the Amazon we need a different kind of trade agreement, one that actually benefits both people and nature, one that protects, establishes limits, prohibitions, and sanctions on the extraction, production, trade and consumption of products and activities that destroy the Amazon. The increasing migrant and employment crises have to be addressed with a new scope on trade and investment. The alter-globalization movement also has to rethink its proposals for this new reality and future. A new relation between local, national and global economies has to be addressed including nature into the equation. The anachronism of the WTO is a call to invigorate our imagination.

*Mary Louise Malig is a trade analyst and has been following the WTO for several years.


[2] WTO (2021) “Waiver from certain provisions of the TRIPS Agreement for the prevention, containment and treatment of COVID-19”

[3] Al Jazeera (2021) Biden calls for intellectual property waivers on COVID vaccines

[4] D. Ravi Kanth. (2021) “Doha agriculture chair exposes her “biases” against developing countries” SUNS 9467 TWN Info Serviec of WTO and Trade Issues

[5] ibid

Photo: VCG