Special Issue: Vol. XIV, No. 1 (Summer ’22)

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The first two decades of this millennium were marked by major political, economic, and geopolitical disruptions. The terrorist attacks of September 11, 2001, the global financial crisis (GFC), and the COVID-19 pandemic, illustrate just some of the developments that sparked the rise of populism and a backlash against globalisation in the world economy. The policy responses have in some cases hindered the process of international economic integration by interposing trade protectionism, discriminatory investment policies, and technological confrontations, among other challenges. This has led many analysts to predict that the world economy is entering a phase of ‘deglobalisation’ — that is, a retreat from the globalisation process.
In view of the interest for a wider public, this study elaborates on the Think 20 (T20) Report finalised by the ‘Primo Braga Group of Experts’ and discusses in greater detail how to address deglobalisation by making the multilateral trading system and the World Trade Organization (WTO) regime work more effectively. It focuses on the main challenges faced by the multilateral trade system and the lessons that can be derived from the new generation of regional trade agreements (RTAs). The basic message is that investing in the improvement of the rules-based multilateral trading system is essential to prevent misconceptions about globalisation. The report concludes by proffering key recommendations to indicate steps that can be taken in the reform process by WTO members.

The collapse of world trade in 2020 due to lockdowns in response to the COVID-19 pandemic has fuelled a rethinking of globalization, with policies being reoriented towards strategic autonomy and local production by means of near-shoring and in-sourcing. Comparing the impact of the COVID-19 trade shock to the Great Depression, this article focusing on resilience and recovery argues that international value chains and the global trading system have helped to weather the impact of the global unprecedented response to a health shock.

The Marrakesh Agreement of 1994 establishing the World Trade Organization (WTO) was a pivotal event in world affairs. The WTO Agreement on Agriculture (AoA) brought the regulation of farm support more firmly within the framework of rules first established by the General Agreement on Tariffs and Trade (GATT) in 1947; and held out the prospect that it was just the first step in an ongoing process of fundamental reform. The new Dispute Settlement Body (DSB), set up to oversee the collection of WTO accords, was given authority to definitively rule when WTO Members had different interpretations on how the rules should be applied. The AoA has three pillars, with constraints on import taxes, domestic support, and export subsidies. Nearly 30-years on, what can we say about the implementation of the AoA? For some, the AoA was never ‘fair’ as it ‘rewarded’ governments (mainly in the developed world) by locking-in the high levels of protection they had previously given their farm sectors, whilst strictly limiting the extent to which others could introduce new measures. Although the entitlements to grant export subsidies were subsequently withdrawn, expectations that a revised AoA would lead to further reductions in the ‘bound’ tariffs and domestic support commitments that governments had accepted in Marrakesh have never materialised. The Doha Round is moribund, and many of the AoA’s provisions have not dated well. There is evidence, nonetheless, that countries have tailored their farm policies to fit within the AoA’s constraints and conform to DSB rulings. However, without a quorate Appellate Body, future dispute settlement proceedings might be jeopardised. Trade in agricultural products increasingly takes place within Free Trade Areas (FTAs), where additional conditionalities might apply before products can take advantage of the ‘free trade’ provisions. Subsidies and mandates to encourage the use of biofuels in transport fuels do not appear to be disciplined by the AoA.

The ongoing dispute settlement crisis in the World Trade Organization (WTO) has threatened to turn the WTO rules-based system into a power oriented model of international trade governance. Unless the crisis is resolved, the WTO may start losing its relevance as the first-best forum choice for interstate trade disputes. For many WTO Members, dispute settlement under free trade agreements (FTAs) may seem superficially to be a viable alternative, which has, moreover, been tested in a recent trade dispute between the European Union and Ukraine. The article demonstrates empirically that this shift from multilateral to bilateral or regional forms of settling international trade disputes would likely have many negative consequences for economically disadvantaged WTO Members, whether they are a complainant or respondent, in a ‘north-south’, or ‘south-south’ trade dispute.

Since the emergence of the COVID-19 pandemic, there have been growing concerns about the policy measures that states have continued to adopt in pursuit of a resilient recovery and, more importantly, the implications of such policies on the future of international trade. This paper explores some of the international trade policy challenges that have surfaced in States’ COVID-19 strategies. In doing so, this paper will argue that in order to achieve a global economic recovery, there is a need for international cooperation and coordination of States’ economic policies. This recommendation is based on a systematic analysis of the policy measures adopted by States during past economic crises and an evaluation of the applicability of those measures in combating the current COVID-19 pandemic. The WTO plays a significant role in this by ensuring that trade rules are not exploited for strictly protectionist agendas and by guaranteeing that trade restrictive barriers do not impinge on supply chains and production capacities of affordable and essential products.