The U.S. trade representative, Ambassador Katherine Tai, was recently in Geneva to express the U.S. position on the future of the World Trade Organization (WTO), an institution that most people agree needs reform. Tai stated that the U.S. remains committed to the WTO. She cited the 1994 Marrakesh Declaration and Agreement on which the WTO was founded, particularly the recognition that trade should raise living standards, ensure full employment, promote sustainable development, and protect and preserve the environment.
In some ways, it was a relief to hear a Cabinet official confirm the U.S. commitment to the trade body, especially after the tumultuous years of the Trump administration, which had threatened to withdraw the U.S. from the WTO altogether. But in other ways, her remarks left me feeling empty-handed.
I think you need to go back further than Marrakesh to really capture what drove countries to come together after World War II and lay the foundations on which the WTO and other key international institutions were built. Only then can we have an honest conversation about our commitment to them and about effective reform.
Founding the World Trade Organization
In 1944, nestled in the ski resort town of Bretton Woods, New Hampshire, hundreds of delegates from 44 nations came together to lay out the foundations of postwar cooperation. The transcripts of Bretton Woods show a reality very different than what Tai and most others point to when expressing support for the WTO.
Bretton Woods participants had two main goals: one, rebuild from the biggest and deadliest war in history, and two, make it too costly to ever allow the horrors of political extremism to reemerge. To make war too expensive, the delegates aimed to tie the economic interests of buyers and sellers across borders. If one country’s prosperity were tied to that of another, that bond would disincentivize public support for policies that would restrict cross-border economic activity. By nearly all accounts, it worked. Rebuilding occurred, and decades of peace and prosperity followed.
That moment in time at Bretton Woods was formative and has been a guiding star for the world’s leading economies ever since—until now. Today, the world’s leading economies include countries that were not active participants in Bretton Woods. That does not make the newcomers bad actors, but it means they don’t necessarily share the same motivations for international cooperation that we have relied on and have come to take for granted over the past 75 years.
Recent crises in three international organizations illustrate the dangers of these divergent views.
First, take the WTO, whose mission is to deal with the global rules of trade among nations. Its main function “is to ensure that trade flows as smoothly, predictably and freely as possible.” The WTO has laudably seen over 30 new members accede to the single global trade regime, including China, Saudi Arabia, Russia and other nations that have not always aspired toward the goals of lower trade barriers and greater transparency. Today, 98% of global commerce is conducted by WTO members.
Yet, even as tariffs and other trade barriers among members have come down since the WTO’s inception in 1995, Beijing’s persistent use of subsidies is broad and deep, distorts global markets, and seems beyond the reach of WTO rules—so much so that the United States no longer sees the use of continuing with a dispute settlement system. Meanwhile, China’s practices of intellectual property theft and cybertheft—state-sponsored, no less—appear beyond the reach of the WTO and have led the U.S. to impose tariffs on Chinese imports, with no end in sight.
In other WTO forums, members have been in negotiations for nearly 20 years on overfishing our seas and using forced labor to do it. In the growing shadow of these conflicts, the stated objectives in the Marrakesh Declaration ring hollow. Meanwhile, the new head of the WTO, Ngozi Okonjo-Iweala, is rumored already to be over the job and threatening to quit due to the inability of the organization to move anything forward. (For the record, she says she enjoys her job.)
Second, consider the World Health Organization (WHO), which is “dedicated to the well-being of all people and guided by science.” It seeks to lead and champion “global efforts to give everyone, everywhere an equal chance to live a healthy life.” Yet the organization appears incapable of even completing an investigation into the origins of a virus that has circled the globe, killed 4.55 million people (and counting), and continues to cripple the world economy.
The WHO is credited with successful campaigns to combat or even eradicate smallpox, polio, Ebola, HIV-AIDS, malaria and tuberculosis, among other illnesses. But its ability to study the most recent global communicable disease, COVID-19, has been hampered by China’s lack of cooperation, which is most unfortunate given the mounting scientific evidence that it originated there. Instead of being a team player and joining other countries in learning the virus’s origins and how to keep this from happening again, China has taken offense at the call for cooperation and has actively impeded the WHO’s ability to move forward. Further, Beijing has retaliated rather severely against its trading partner Australia, which originally called for the inquiry.
Third, look at the World Bank, whose self-proclaimed mission is to “provide a wide array of financial products and technical assistance, and help countries share and apply innovative knowledge.” It provides loans and grants to low- and middle-income countries for the purpose of pursuing capital projects and aims to end extreme poverty by 2030.
Recently we learned that a highly regarded data report called “Doing Business,” which provided data on the ease of doing business in 190 countries at a detailed level, can no longer be trusted. It appears some of the numbers were manipulated, and a recent report into the data scandal reveals that the problem was rooted in a desire to appease China, one of the World Bank’s largest members and donors. The World Bank categorizes the faulty numbers as data irregularities, but they are damaging in light of the organization’s mission.
Forging Ahead and Finding Common Ground
While the examples discussed previously all involve China, the broader point is that international institutions are now being forced to reckon with worldviews and behaviors that weren’t contemplated at their founding. So, it is time to remind ourselves what we wanted out of our institutions in the first place and whether we still want those things: the WTO to help countries set rules to facilitate international trade; the WHO to provide science-based work to promote global health and disease eradication; and the World Bank to promote resources and research to end world poverty. These goals were deemed worthy after World War II. Are they still worth pursuing, or have our needs evolved?
There is no wrong answer. We simply owe it to ourselves and future generations to identify common goals and then set in place international organizations to carry out that mission. If the members of our current international institutions do not contribute to a robust discussion, then new members like China appear all too ready to fill the void. The clear lack of trust among countries, particularly with respect to China, underscores the urgent need to identify shared interests.
The Bretton Woods participants may have come from different ideologies and backgrounds, but they pursued a common goal. At that time in history, the common goal was to prevent the horrors of political extremism from reemerging. It was this intense shared commitment that built the foundations and enough trust needed for the institutions to succeed. In other words, we don’t all need to be the same; there just needs to be something that we all want.
Recent G-20 and G-7 statements suggest countries’ interests align over recovering from the global pandemic and acquiring new tools to address, adapt to and survive climate change. I do not know if those interests are enough to draw genuine commitment to these tools we created over 75 years ago. But whatever it is that brings members—both founding and new members—together, now is the time to reassess and identify those shared interests. Our international institutions will suffer if we don’t.