The World Trade Organization as a key player in promoting sustainable development within the revitalization of the multilateral system
UNIBO-MAECI Project
The multilateral trading system represents one of the main expressions of the principle of international cooperation that characterized the governance of international relations after World War II. Based on the World Trade Organization (WTO), it constitutes an essential driver for the promotion of sustainable development in the global economy, as indicated by the 2030 Agenda and reaffirmed by the Pact for the Future. In fact, already in its Preamble, the WTO clearly promotes a model of sustainable economic development, where the use of natural resources must be optimal, and attention to the needs of developing countries needs to be constant and timely, being able to be based on a set of multilateral rules aimed at ensuring the preferential treatment of these countries. Universal in scope, thanks to its 166 Members, the Geneva-based organization can count on an articulated institutional apparatus and is capable of attracting and aggregating dossiers and know-how on the most challenging issues of the global economy. Despite the crisis it is currently going through, due to the blockage of the Appellate Body, the difficulties in defining new rules for international trade, and the increasingly complex geopolitical framework that generates and multiplies the problematic aspects of the WTO, the multilateral system nevertheless remains central to governing the unrelenting globalization of the economy with fairness and balance, and successfully addressing the challenges of climate crisis, inclusiveness, health, and more generally, full and widespread sharing of the benefits of technological progress.
In the current difficult international scenario, imbalances, exploitation, and continuous litigation lead to fragmentation that harms the weakest subjects, originates unacceptable asymmetries in access to resources and in the distribution of produced wealth, impoverishes social groups that have achieved relative economic well-being, and impairs the environment. Such fragmentation creates an environment where it is not easy to renew the multilateral trading system: but free and fair trade, and therefore, the presence and reform of the WTO are part of the solution that the International Community must provide to de-escalate tensions and overcome them, guaranteeing stability and peace, and achieving, thus, sustainable development.
The WTO is already an undisputed player in the debate to reform the governance of the world economy. It proposes variable geometry solutions such as the Joint Initiatives adopted at the Buenos Aires Ministerial Conference on e-commerce, investment facilitation, small and medium-sized enterprises, and national disciplines on services. Moreover, the institutional framework of the WTO, wisely directed and utilized, provides the best context for open and constructive meetings -i.e. an information sharing context- in which to study and debate the issues of trade and global environmental challenges, massive public intervention in support of specific industries, the inclusiveness that is intended to characterize WTO membership as well as participation in the discussion of its reforms, the continuous reskilling of workers required by new production models (the so-called domestic active labor market policies (ALMPs) that must now side the traditional trade policies of WTO Members). In fact, the Trade and Environmental Sustainability Structured Discussions (TESDDs), the informal dialogue on plastic pollution and environmental sustainability of plastics trade, the initiative on reforming subsidies for fossil fuels, several informal groups, including the group on gender issues and the promotion of women’s participation in global trade, as well as the group on Micro-, Small and Medium-sized Enterprises (MSMEs), have been set up since 2020. In various WTO Committees, convened in ad hoc formulas, attempts are then made to introduce regular consideration of the various domestic carbon taxes, energy issues and the circular economy.
The multilateral system has also promoted institutional reforms for the optimal functioning of the WTO, from the dispute settlement system (including discussion on the justiciability and scope of national security exception clauses) to decision-making mechanisms (with the proposal for a responsible consensus), to the full implementation of already existing multilateral rules on transparency and monitoring.
The 30th anniversary of the WTO, which entered into force on January 1, 1995, provides an opportunity to review and reconsider past progress, reflect on and analyze current trends, and identify the way forward to make trade work for all. This is a complex undertaking, not least because it is characterized by the need to make trade liberalization policy consistent with the many “trade and” challenges -for example, climate, digital transition, geopolitical tensions- that characterize our time.
This Project, founded on the collaboration of the University of Bologna with the Italian Ministry of Foreign Affairs and International Cooperation (Ministero degli Affari Esteri e della Cooperazione Internazionale, MAECI) and co-financed by MAECI, aims to celebrate the 30th anniversary of the WTO by seizing this, challenging, opportunity. An international research team will contribute to this effort by building on the valuable “quartet” of World Trade Reports produced by the WTO from 2021 to the present. The UNIBO-MAECI Project will analyze the complexities outlined previously. First, it will emphasize that the interpretation and application of liberalization rules in a sustainable manner are already embedded in the DNA of the multilateral trading system. Subsequently, the Project will present a dossier of proposals for the consideration of the Ministry of Foreign Affairs. These solutions aim to be balanced and to promote equity and the protection of diversity in the global economy.
Given the nature of exclusive competence of European Union (EU) trade policy, the research team will be guided by continued attention to Italy’s mechanisms of interaction with European institutions to define EU action in the management of multilateral issues in the WTO, not least also with reference to the involvement of African countries in the broad reform process of the Geneva system, for their full inclusion in the benefits of sustainable trade liberalization. Also continuing will be the consideration of ways for civil society to be involved and participate in the activities of the World Trade Organization.
Elisa Baroncini
Coordinator of the UNIBO – MAECI Project