MULTITRADE

Does Trade Multilateralism have a Future?: Reviving the WTO’s Credibility as the premier Multilateral Trade Negotiating Forum

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 Obiettivo del progetto (Objective)

'In the present climate of weak economic prospects, the developed countries have seen a growing disenchantment with globalisation and trade liberalisation. Irrespective of their stated interest in enhancing export revenue to bridge fiscal gaps, strong protectionist tendencies are surfacing. Also, the focus seems to be shifting from multilateralism, made evident from the failure to conclude the on-going Doha Round of WTO negotiations and the recent spurt in FTA negotiations worldwide. On the other hand, developments since the recent financial crisis indicates that the WTO is yet to lose it’s relevance as the multilateral referee of global trade relations, as least insofar as its rule-making and dispute-settlement roles are concerned. The laudable resilience of the global trading system and WTO institutions notwithstanding, recent experience with Doha Development Round negotiations has highlighted the need for systemic changes in WTO, in the interest of making the organisation more credible and efficient. It is in this context that this project proposes to analyse possible contours of a reinvigourated multilateral trade negotiation system and trade liberalising philosophy, one that can meet the trade challenges and political-economy realities of the 21st century. To do this, the project will look at the contours of a more constructive engagement and leadership by emerging economies (and in particular Brazil, India and China) in the international trade negotiations, especially given that the major industrialised countries have now reduced their leadership in the WTO-led multilateral trade negotiations. The project will also evaluate the acceptability of a developing-country-led negotiating template that might emerge as result. Finally, we would discuss how the WTO could be reformed to institutionalise systems and governance modalities that foster/boost dynamic comparative advantages for all Members, and the specific role of emerging markets in restoring WTO’s supremacy.'

Introduzione (Teaser)

The renewed focus on regional trade agreements (RTAs) is impacting major emerging markets. An EU initiative looked at the multilateral trade system and its implications for Europe and emerging countries.

Descrizione progetto (Article)

Despite globalisation, protectionism and the exclusion of emerging markets from global trade deals, there is a will to take the multilateral trade agenda forward. With EU funding, the MULTITRADE project analysed the potential structure of a multilateral trade negotiation system and trade liberalisation approach.

The project focused on the emergence of RTAs and their effect on multilateral trade. It also investigated the future of the World Trade Organization (WTO) as a leading multilateral trade negotiating body, and how it can be reformed to optimise its functions.

Two key papers were published in this respect. The first examines how large RTAs can influence the multilateral trading system and how this may affect China and India. The new economic governance system that is likely to arise given the rejuvenated interest in regionalism was also analysed. The working paper notes that market fragmentation is caused by imbalances. These imbalances are the result of free trade agreements that were not opened up on a global scale.

The second paper explores the potential implications of the recent global shift towards regionalism for the two emerging markets. It studies how various regional agreements being negotiated can be brought in line with the WTO. Future challenges and reforms that need to be addressed by the WTO have also been set forth.

By emphasising deeper multilateral engagement between EU Member States, findings are also relevant to the wider EU community.

MULTITRADE provided extensive insight into emerging market concerns over multilateral trade governance. The EU should be well positioned to enter into trade negotiations with emerging countries while supporting trade multilateralism.