U.S. must step up to help the WTO succeed

The new head of the World Trade Organization, Ngozi Okonjo-Iweala, starts work this week. Hopefully she likes a challenge. She takes charge of an institution once seen as vital for global prosperity but now widely regarded as moribund, and she’ll need to contend with a new climate of opinion that seems to regard free trade as passé and measures to build domestic economic resilience as paramount.

Okonjo-Iweala is eminently qualified. But it took U.S. leadership to build the WTO, and it will take U.S. leadership to revive it.

The body has three indispensable functions. It facilitates negotiations to promote free and fair global trade. It provides transparency by monitoring countries’ trade policies. And it serves as a forum for settling disputes. Each mandate is on the point of collapse. WTO negotiations have achieved nothing for years. Monitoring is failing because many governments prefer not to comply. And the dispute-settlement process has been effectively shut down by the U.S. refusal (beginning under President Barack Obama) to appoint judges to its appellate body.

This breakdown, it must be emphasized, is not the fault of the WTO and its officials. In the end, the body can only do what its member governments ask and empower it to do. At the moment, they’re content to let it slide into irrelevance.

A global emergency such as COVID-19 increases the need for cooperation, in particular for stable trade relations. A retreat to protectionism will only heighten vulnerability and worsen the damage.

Certainly, Okonjo-Iweala’s WTO will need to make the system work better. The necessary agenda is wide-ranging and far from straightforward. In particular, there needs to be a new emphasis on transparency and compliance, especially in countries whose governments play a dominant role in directing resources — China, most notably. Old rules need updating for new industries, fast-changing conditions and foreseeable future pressures. In contending with all this, the WTO needs to be much nimbler.

At the same time, Okonjo Iweala must refuse to be a scapegoat. If member states — and the U.S. above all — remain content to see the WTO fail, its fate is sealed.

Last week, President Joe Biden’s nominee for U.S. Trade Representative, Katherine Tai, appeared before Congress. If confirmed, Tai will need to make the case for an approach to trade that grasps the benefits of cooperation and competition, and opposes efforts to supplant them.

So far, unfortunately, the Biden administration’s rhetoric on trade hasn’t much differed from that of the Trump administration. Robert Lighthizer, Trump’s trade representative, had no time for the WTO, an attitude that hastened its decline. With luck, Tai will see it as the ally it can and should be, in strengthening the U.S. and repairing the global economy. If she and her team fail to rise to that challenge, Okonjo-Iweala’s task will be impossible.