"Dealing a huge blow to the WTO, President Donald Trump in August 2018 threatened to withdraw from the organisation if it fails to upgrade operations to reflect a modern, rapidly changing world. If this threat is executed by the WTO, it would not only impact multilateralism and global cooperation but also the entire international trading system."

Dealing a huge blow to the WTO, President Donald Trump in August 2018 threatened to withdraw from the organisation if it fails to upgrade operations to reflect a modern, rapidly changing world. If this threat is executed by the WTO, it would not only impact multilateralism and global cooperation but also the entire international trading system.

The Geneva-based WTO facilitates trade deals and settles disputes to help producers of goods and services, exporters, and importers conduct their business. Its 164 members account for almost 98 per cent of all global trade. The organisation recently initiated several measures to boost developing economies through preferential trade policies. One of the reasons why the US plans to exit WTO is it loses all trade disputes settled by the body. The country wins all the lawsuits that are filed by it but loses around 90 per cent of the cases filed by other countries against its trade practices. These rulings threaten the country’s national sovereignty and ability to strictly implement its trade laws.

US’ refuses to nominate new judges to the WTO

The US has also accused the WTO of failing to keep up with changes in the global economy, with rapid growth in services and technology sectors difficult to regulate effectively. The country, which has the power to nominate judges at the WTO's final court of appeal, has refused to allow any new names to be put forward to decide disputes. As the term of several judges on the Appellate Body is likely to expire this year, the US’ refusal to nominate new names would leave less than three judges at the organisation, posing a serious existential threat before it.

Need for unanimous approval delays reforms

In November, the Chinese Ministry of Commerce proposed three fundamental principles and five proposals for reforming the WTO reform. Thus many parties seek reform in the WTO. However, none of them seek the same reform posing one of the biggest challenges to the organisation. Any major change needs unanimous approval from every member. A case in point is the Doha Round of Negotiations, a draft of WTO reforms that still has not been approved by the 164-member body, almost 18 years after first being proposed.