The World Trade Organization (WTO), established in 1995 as the successor to the General Agreement on Tariffs and Trade (GATT), was envisioned as the guardian of free and fair global trade. It was founded to ensure that trade flows as smoothly, predictably, and freely as possible, reducing trade barriers and providing a platform for negotiations. However, as it approaches its 30th anniversary in 2025, the question looms large: Is the WTO on its deathbed? The WTO’s credibility has steadily diminished over the past decade. Once hailed as the bedrock of the global trading system, it now finds itself at the mercy of rising economic nationalism, trade wars, and institutional paralysis.
The organization’s dispute settlement mechanism – its crown jewel – has been rendered dysfunctional since 2019 due to the U.S. blocking judicial appointments to its Appellate Body. Without a functioning dispute resolution system, the WTO’s ability to enforce trade rules has weakened considerably, making it nearly impossible to resolve international trade disputes effectively. The Dispute Settlement Body (DSB), once seen as an efficient and fair arbitrator, is now handicapped by political maneuvering and the unwillingness of major economies to abide by its decisions. The WTO was established to prevent trade conflicts and ensure a level playing field, but it has been powerless in the face of the U.S.-China trade war. The two countries, instead of using the WTO framework, have resorted to unilateral tariffs and retaliatory measures.
The WTO’s inability to mediate or provide effective solutions has exposed its declining relevance in an era where economic superpowers prefer bilateral and regional negotiations over multilateralism. The trade war has led to a broader breakdown of trust in the WTO’s ability to enforce global trade rules, with other nations increasingly adopting protectionist policies. One of the most contentious issues under the WTO has been the manipulation of intellectual property rights (IPR) regulations, particularly under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. Developed countries, particularly the U.S. and European Union, have leveraged IPR laws to benefit their pharmaceutical and technology industries, often at the cost of developing nations. During the Covid-19 pandemic, the WTO was criticized for its slow response in waiving patent protections on vaccines, which could have facilitated wider access for poorer nations. Instead of ensuring equitable global trade, the WTO has often been accused of protecting the commercial interests of wealthy nations under the guise of IPR enforcement. The WTO’s stagnation has coincided with the rise of regional trade agreements (RTAs), such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP).
These agreements bypass the WTO framework and provide alternative avenues for trade liberalization. With major economies prioritizing regional trade deals, the WTO’s role as the global trade arbitrator has diminished. This shift toward regionalism undermines the WTO’s authority, as countries now find it more beneficial to negotiate trade terms outside of the multilateral system. Developing nations, once hopeful that the WTO would address trade inequalities, now feel short-changed. The Doha Development Agenda, launched in 2001 to address issues faced by developing economies, remains unfinished. Wealthier nations continue to provide massive agricultural subsidies, while developing countries struggle to compete on an uneven playing field. Additionally, developed countries have been accused of using environmental and labour standards as non-tariff barriers to restrict exports from developing nations. The WTO’s failure to deliver on its promises has fuelled resentment and eroded trust among emerging economies. With the WTO’s dispute settlement system paralyzed, major economies side-lining it through trade wars and regional agreements, and developing nations losing faith in its promises, the organization faces an existential crisis.
The WTO’s foundational principles of free trade and fair competition have been undermined by protectionist measures, strategic trade policies, and growing economic nationalism. Attempts at reform have been slow and have met with resistance from powerful member states. If the WTO does not undergo significant restructuring and regain its authority, it risks becoming obsolete. Despite its troubles, the WTO is not beyond salvation. Reviving the Appellate Body, enforcing trade rules effectively, and ensuring equitable benefits for both developed and developing nations could help restore its legitimacy. Addressing the misuse of IPR, ensuring fair agricultural policies, and tackling trade distortions caused by superpower conflicts are necessary steps to prevent the WTO from becoming irrelevant. However, this requires strong political will from global leaders – something that remains elusive. As the WTO turns 30, it faces a stark reality: adapt or fade into irrelevance. If urgent reforms are not undertaken, the global trading system may soon witness the demise of an institution once deemed indispensable.
(The writer is Associate Professor, Centre ror South Asian Studies, Pondicherry Central University, India.)