A World Trade Organization for the 21st Century

A World Trade Organization for the 21st Century

The Asian Perspective

ADBI series on Asian Economic Integration and Cooperation

Edited by Richard Baldwin, Masahiro Kawai and Ganeshan Wignaraja

The global financial crisis exposed great shortcomings in the global economic architecture, generating extensive international debate about possible remedies for these deficiencies. The postwar global architecture was guided by major developed economies, centered around the IMF, the GATT, and the World Bank. Today, the balance of economic power is shifting toward emerging economies. Global governance and economic policy must reflect this shift. With contributions from prominent Asian and international trade experts, this book critically examines key changes occurring in the world trading system and explores policy implications for Asia.

Chapter 1: Introduction and overview

Richard Baldwin, Masahiro Kawai and Ganeshan Wignaraja

Subjects: asian studies, asian development, asian economics, economics and finance, asian economics, international economics


The 1995 creation of the World Trade Organization – as an institutional extension of the General Agreement on Tariffs and Trade (GATT) – held out the promise of an effective, rules-based world trading system where all countries were treated alike. In addition to establishing a global judiciary for trade disputes, the WTO was expected to provide a forum for trade negotiations and undertake other related functions. Progress on the judiciary side has been brilliant, but the negotiation promise is largely unfulfilled (Hoekman and Kostewei 2010). The world trading system is in a state of flux characterized by new developments and uncertainties about global trade governance under the WTO. Fundamental changes are occurring because of the rise of emerging economies (such as Brazil, Russian Federation, India, People’s Republic of China, and South Africa – the BRICS), the expansion of international production networks and supply chains, signs of new commercial and industrial policies, and the proliferation of free trade agreements globally. These developments are all here to stay but the WTO has not kept up with them. Furthermore, the WTO Doha Round has been going on for more than a decade. Despite being the longest multilateral trade talks in history, it shows little sign of concluding comprehensively anytime soon. The WTO’s centricity in global trade governance is eroding and risks continuing to erode.