Handbooks of Research on International Political Economy series
Edited by David Deese
Chapter 16: Looking back, looking forward: multilateral and regional trade Governance
The World Trade Organization (WTO) is seen as one of the pillar institutions in global economic governance and aims to promote free trade globally. As it operates on a one-country-one-vote consensus basis, and has an effective dispute settlement mechanism, it has been viewed by many as the most legitimate and enforceable multilateral institution in global governance. However, today it has to deal with one big institutional challenge: its 160 member states are unable to reconcile their divergent interests in order to break the deadlock and conclude the 13-year-long Doha Development Round (DDR) negotiation. The stalled negotiation can be attributed to many factors, including the lack of political will of the key members, a decline of US leadership in multilateralism, the imbalanced agenda setting, the unexpected global financial crisis in 2008 and the following global recession. In addition, developing countries are frustrated by the apparent disengagement of the developed countries and in multilateralism their retreat to regional trade agreements (RTAs). In the past decade, RTAs that deeply liberalize trade between two or more countries have proliferated. Almost all the members of the WTO are now members of at least one RTA. Mongolia, the only exception, is also proactively negotiating bilateral free trade agreements (FTAs) with Japan and China. The average African country belongs to four different agreements, and the average Latin America country belongs to seven agreements. More negotiations are under way.
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