Fifteen Eighty Four

Academic perspectives from Cambridge University Press


Trade Links: New Rules for a New World

James Bacchus

In a time of increasing international turmoil, the World Trade Organization is undergoing an existential crisis. Trade links the world not only through the flow of international commerce in goods, services, and ideas, but also through its economic, environmental, and social impacts. Trade links are supported by a WTO trading system founded on rules established in the twentieth century that do not account for all the modern changes in the global economy. These rules must be modernized in ways that can be utilized to combat future pandemics and climate change and advance sustainable development, all while continuing to foster free trade and encourage the peaceful settlement of international disputes.
Trade remains essential as a driver of global wealth and a creator of more potential everywhere for human flourishing. Trade is maximized by global rules as part of a global trading system. The WTO thus remains indispensable to our hopes for worldwide prosperity. Yet much has changed since what is now a system including 164 countries and covering 98 percent of all world commerce was established in 1947 during the brief international “constitutional moment” that immediately followed the end of the Second World War. The basic rules providing for the lowering of border barriers to trade and for non-discriminatory treatment of traded products remain appropriate and fit for purpose today. However, since the transformation of the system into the WTO in 1995, much has changed in the world and in the world economy that requires a new perspective on trade and new rules appropriate to that new perspective.

As the Covid-19 pandemic has revealed, the link between trade and health must be addressed by eliminating barriers to trade in medicines and other health products. This is imperative. Beyond and in addition to this, an abundance of other issues must be addressed by the members of the WTO to bring the institution fully within the 21st century. WTO members have failed for decades in repeated efforts to eliminate the host of remaining barriers to agricultural, manufacturing, and services trade. They have likewise failed to agree on new rules that are needed for digital trade, intellectual property, competition, investment, and other aspects of the new commercial economy. The failure of the rules-based multilateral trading system to address these issues undermines the system by diminishing its credibility and by compelling countries to try to resolve these old and new commercial concerns in “second-best” bilateral and regional arrangements outside of the system.

But more, the members of the WTO have thus far largely failed to engage on trade links with a broader range of global concerns that encapsulate global commerce. Negotiations on a few topics relating to the links between trade and the environment have been deadlocked for decades. The links between trade and climate change, biodiversity, the use of land and natural resources, animal life and wildlife trade, and much more that shapes the human economy that is contained within the natural ecology of the planet, are not even on the WTO agenda. Nor have WTO members yet paid anything approaching the attention they must pay to their professed overall aim of trading toward achieving the objectives of sustainable development or to the social issues of cooperation, equity, and inclusion as they are related to and are affected by their links to trade.

In Trade Links: New Rules for a New World, my latest book for Cambridge University Press, newly published this month, I set out in detail how I – as a founder and former chief judge for the WTO and an ardent advocate of the multilateral trading system – believe the WTO must be changed if it is to continue to survive and succeed in fulfilling our fond hopes for a future adorned by a sustainable global prosperity.

Trade Links by James Bacchus
Trade Links by James Bacchus

About The Author

James Bacchus

James Bacchus is Distinguished University Professor of Global Affairs and Director of the Center for Global Economic and Environmental Opportunity at the University of Central Flor...

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