Even as trade ministers from 159-member countries are going to meet in order to hammer out a global trade deal in Bali in less than a week, the proliferation of several bilateral and regional trade agreements might weaken the World Trade Organization (WTO) as an institution that monitors multilateralism, according to renowned trade economist and professor of economics and law at Columbia University Jagdish Bhagwati.
Bhagwati has stressed on that fact that while both the developed as well as developing countries have failed to push the Doha round of global trade talks forward, which began in 2001, it is crucial that WTO retains its stature as a credible platform for conducting a rules-based trading system and resolution of trade disputes.
In an article – Dawn of a New System – published in Finance and Development, a quarterly publication of the International Monetary Fund, Bhagwati has underscored the challenges the new chief of WTO, Roberto Azevedo, faces at a time when gigantic trade agreements such as the Trans-Pacific Partnership, or TPP led by the US and the Transatlantic Trade and Investment Partnership or TTIP led by the European Union (EU) is taking shape gradually.
These agreements, though they are at a nascent stage presently, have indicated rewriting global trading norms much beyond what is laid out under the WTO. But these will, nevertheless, result in killing the Doha round of talks. Bhagwati stresses that this will lead in diminishing WTO’s role in rule making and settling trade disputes.
Hence, he suggests in what he refers to as ‘Doha Lite and Decaffeinated’, to agree to a slimmed down version of the proposed global trade deal during the ministerial conference in Bali next week. According to Bhagwati, this could be the only solution to salvage WTO. This is because declaring Doha dead would mean losing even some of the small benefits that could have been obtained that might be beneficial for some of the least developed countries.