COVID-19 and the future of world trade | VOX, CEPR Policy Portal – voxeu.org

Alan Wm. Wolff 01 June 2020

First posted on:

Remarks at a webinar hosted by the Korean International Trade Association, 27 May 2020 (published on the WTO website here)

The pandemic is an unprecedented challenge in our time not just to world health but to the global economy.

National governments, pressed for a response, enacted both trade restrictions and import liberalizing measures with respect to medical supplies.

Fortunately, in terms of numbers, the liberalizing trade measures have exceeded those restricting it.

The WTO Secretariat has obtained notifications of measures from its Members and published information on its website.This provides essential transparency for planning both by national policy makers and for businesses.

The WTO has also alerted members to the effects of the pandemic and the responses to it, by issuing a Trade Forecast.Due to the direct effects of the pandemic, depressing both supply and demand, as well as to a much lesser extent trade measures, the WTO has projected that global trade will decline by 13% to 32% this year.

Keeping trade open in the face of the pandemic has been the subject of trade initiatives led by Singapore, New Zealand, Canada and Switzerland.These initiatives have been circulated to the 164 Members of the WTO and have gained additional adherents.

The evolving shape of world trade, including global supply chains, will be shaped primarily by a how businesses view future economic conditions.There will be some limited on-shoring to the extent that government policies will be available to support this reflow from an era of globalization.But government budgets will already have been strained by fiscal measures to fight the pandemic.The availability of funds to support on-shoring is likely to be limited to targeted efforts, primarily perhaps for medical supplies.And even there, government stockpiles (with domestic sources preferred) may be preferred to direct industrial support.The products effected and duration of the support may be limited.On-shoring is likely also to be affected by tax measures designed to restore government finances.

Supply chains will also be affected by some likely diversification among foreign suppliers.But again, this will be limited by economic viability.Businesses can plan for contingencies but in the end must preserve revenues and profits.

The leanest of just-in-time supply chains may be a level of efficiency that can no longer be afforded.So, inventories will rise, but again be constrained by the economics of running a business.

Outside of supporting the production and stockpiling of medical supplies and vaccines, technology and market forces will be much greater factors determining trading patterns than government policies, including the use of regional trade agreements.In an extreme emergency, even membership in a customs union did not prevent some individual national actions which were at odds with the ideal of a single market.

Regional trading arrangements can be useful for exploring paths forward for rule-making where progress would be more complicated to achieve on a global basis.In addition, regional integration can be productive and should be fostered.Nevertheless, in terms of total trade flows, sub-multilateral agreements are not determinative.Businesses still have to serve markets wherever they are located and will continue to need to reach out beyond the regions in which they are located.

As a WTO official, my primary concern is with how well-prepared the multilateral trading system is for the challenges that it now faces and that it will face.For the World Trade Organization, there are three classes of challenges:

Epidemiologist predict that there will likely be a series of second waves of the coronavirus.There is the potential for additional national restrictions being placed on the availability of vaccines and pharmaceutical remedies outside of the country of their invention and/or production.The values of the multilateral trading system will be needed more than ever in order to minimize disruptions of the necessary means to meet upcoming health and economic challenges.

Collective actions are now essential.

Suggestions that have been made include that WTO Members:

Suggestions that WTO Members could consider include:

In addition, the WTO Secretariat could engage in heightened coordination with international financial institutions and private sector actors to restore trade finance.

In the current upsurge in criticism of the inadequacies of the collective responses to the pandemic, the WTO is receiving heightened scrutiny.

Were the WTO Members to join together to meet the trade challenges of the coronavirus and the desperately needed economic recovery, most public criticisms of the WTO would likely disappear.But the problems preceded the pandemic and will, absent reforms, persist after the pandemic is over and its after-effects have been addressed.

It is necessary to understand what values the multilateral trading system is designed to promote before it can be reformed.

A serious inquiry into this subject would serve three purposes:

1. to know the value of what we have in the current system,

2. to determine if the values of the current system enjoy the support of all WTO Members, and

3. to address the degree to which the WTO is of sufficient continuing relevance as it is at present or whether it needs fundamental change.

My list of the underlying values of the WTO has 16 entries.They include a number of basic principles.

The first two, not obvious to all of us today, are supporting peace and stability. This was the key concern of the founders of the multilateral trading system in 1948 and the central objective of conflict-affected and fragile acceding members today,

Other values, such as nondiscrimination, transparency, reciprocity,international cooperation and the rule of law are more obvious.

Still others are more nuanced, less obvious perhaps, and emerge only upon reflection. They include well-being, equality, sovereignty, universality, development, market forces, convergence and morality.

A recent addition to the list is sustainability.

A serious discussion of WTO reform is long overdue.The pandemic simply adds to the urgency of it taking place.

The seriousness with which reform efforts are undertaken will be key in determining whether the WTO reasserts the historic centrality of its global role in managing international trade relations in the years ahead.1

The impact of COVID-19 has been profound on the health of the worlds populations as well as on the global economy.It is the functional equivalent of a neutron bomb having been released that sickens humans but not animals or equipment.As a result, factories were idled, restaurants were empty, and countless lives ceased being productive.And there has not been full recovery yet.This is not the first pandemic and it can be predicted with near certainty that it will not be the last.

It is highly likely that the world that emerges from this pandemic will be very different from the one that preceded it.That is the view articulated by Martin Wolf of the Financial Times in a brilliant five-minute podcast released on 13 May 2020.It is hard to argue with his conclusions.Global supply chains will be re-thought.The digital economy will be more imbedded in every situation in which it can be applied, not least for working remotely instead of in centralized locations.Employment may be depressed for a very long time to come.The worlds finances will have been transformed from surpluses to deficits.

In this context of unprecedented challenges, serious questions are emerging as to the value of the World Trade Organization at present and for the future.The Ambassador to the WTO of the worlds largest exporting nation stated on 12 May, in an interview with a seasoned former U.S. trade negotiator, that the WTO had failed to respond adequately to the COVID-19 crisis.This refers of necessity to the fact that, driven by expediency, nation-states mostly responded individually, not collectively, to the crisis, in many cases without reference to the impact on the interests of others.The Ambassador attributed the reason for the WTOs poor performance to lack of leadership and diminishing trust.

The unavoidable question presented is whether the WTO is fit for purpose, now in the midst of this crisis and for years to come.The crisis heightens the need for an examination of the underlying principles and values of the WTO and addressing the degree to which the WTO is of sufficient continuing relevance as it is or needs change.This last question has been answered before it is asked, as the G20 leaders called for WTO reform well before there was the slightest thought that a pandemic was in the offing.

The institution is and has been under obvious stress -- due to the rise of populism, due to trade wars, due to a failure to demonstrate that the worlds trade negotiating forum could still produce negotiated results, and due to its failure to maintain the WTOs much-touted dispute settlement structure.

There is now a need for immediate action to control the harm that can be caused by trade restrictions in response to the current global health and economic crises and to aid in the economic recovery that must ensue. This is also a time when it is necessary to consider the future of the multilateral trading system.A fresh appraisal is required despite the fact that the system has been highly successful by most measures during its 70-plus year history.The most telling measure of past performance is that the world economy has grown by multiples and much (but not all) of world poverty has been eliminated.World trade played an important part in delivering this vitally important result. This said, a strong positive track record is no longer sufficient.Resting on laurels at this juncture can only lead to decline.2

All WTO Members profess that they are fully committed to multilateralism and thus to the maintenance of the multilateral trading system.Although the degree of adherence varies, it is necessary to at least identify and assess the extent to which consensus exists on the fundamental precepts underlying the organization as a first step toward understanding what a WTO 2.0 can and should consist of.The WTO would be an empty shell if all it consisted of was an agora, an open space devoid of principles in which, were there a consensus, agreements could be negotiated.

This exercise should not be undertaken to the exclusion of making incremental improvements in the trading system.Nor should progress in this regard result in an unduly extended exercise.Achieving the ideal construct among nations is a bridge too far.Pragmatism is needed.Purely philosophical discussions tend to be of very long duration and do not yield immediate results.The councils of the early Christian Church spanned centuries, from 325 to 787 AD, and established a consensus only by condemning or anathematizing a series of those who engaged in what was deemed to be excessive experimental thinking.3 Our modern time frame must be infinitely shorter, as current challenges require near-term responses, and if possible, more inclusive.

Despite an extensive history of an attempt to manage commercial relations among nations, there is no clear single source listing the principles which shape the multilateral trading system.Nor is there a constitution to foster organic growth.Accretions have to be just that, added to over time by consensus of the full Membership.Expansion through adjudicatory interpretation has encountered limits.

The document that gave rise to the multilateral trading system was a contract, the General Agreement on Tariffs and Trade (the GATT).It served for nearly a half century as an ad hoc arrangement necessitated by the fact that the International Trade Organization (ITO) failed to come into being.The GATT contract has none of the trappings of a founding document.It is not a constitution.It has no preamble containing precepts nor even a statement of objectives.The Marrakech Agreement creating the World Trade Organization (the WTO) does contain objectives.4It is usually not cited by Members for the full range of the WTOs purposes, but selectively, to advance particular causes.In addition to looking to these founding documents, there are some principles which can be gleaned from practice.They remain unenunciated but are nevertheless very real.

The following is an attempt to discern and identifythe principles and values that govern or may be expected to govern the multilateral trading system and the World Trade Organization in which it is embodied.

At the most fundamental level, the system, like the European Union (ne European Communities and European Economic Community), was founded to promote peace.It seems rather quaint to cite peace in the current context.Surely it is an anachronism of remote historical interest at best.Something to be left to academic inquiries.How relevant is it today?

The quest for peace has strong philosophical roots

The idea of perpetual peace was first suggested in the 18th century, when Charles-Irne Castel de Saint-Pierre published his essay Project for Perpetual Peace while working as the negotiator on the Treaty of Utrecht. However, the idea did not become well known until the late 18th century. The term perpetual peace became acknowledged when German philosopher Immanuel Kant published his 1795 essay Perpetual Peace: A Philosophical Sketch.5

In this essay, Kant states:

There must be a league of a particular kind, which can be called a league of peace (foedus pacificum), and which would be distinguished from a treaty of peace (pactum pacis) by the fact that the latter terminates only one war, while the former seeks to make an end of all wars forever. This league does not tend to any dominion over the power of the state but only to the maintenance and security of the freedom of the state itself and of other states in league with it, without there being any need for them to submit to civil laws and their compulsion, as men in a state of nature must submit.

Kant was setting out a fundamental purpose of humanity, to create a state of perpetual peace.In order to serve this end, the liberal international order was constructed based onfour pillars the multilateral trading system (ITO and GATT, and the successor WTO), the United Nations, the IMF and the World Bank.All of these institutions were intended to help build a better world after two world wars.They were each part of an effort to underwrite the hope for perpetual peace.In this context, the WTO and the GATT are not simply contracts, but are a purposed construct for achieving a much more basic human aspiration.

That said, you will not hear Immanuel Kant being quoted in recent interventions by WTO Members.The idea of promoting peace seems very remote in most respects from subjects that daily engage the minds of the commercial diplomats who represent the Members in the corridors and conference rooms of the WTO in Geneva.Yet sustaining peace was very much on the minds of the founders of the multilateral trading system.This is evidenced by the very first paragraph of the Havana Charter6for the International Trade Organization, the intellectual forebear for the WTO, which states:

RECOGNIZING the determination of the United Nations to create conditions of stability and well-being which are necessary for peaceful and friendly relations among nations,. . .

. . . they hereby establish the INTERNATIONAL TRADE ORGANIZATION through which they shall co-operate a[s] Members to achieve the purpose and the objectives set forth in this Article.

I have set out in prior remarks a short history of the role of peace in trading arrangements which led to that moment of creation of the multilateral trading system and of the disappearance of peace from our WTO lexicon -- until its resurrection by the conflict-affected countries which are in the process of acceding to the WTO.These fragile economies are unexpectedly numerous.The list includes Afghanistan and Liberia, both of whichjoined five years ago, and now Ethiopia, Somalia, Sudan, South Sudan, Timor-Leste and Iraq among others.For these countries, and those who seek to help them accede to the WTO, the promotion of peace is a very real principle and cause espoused as being a fundamental motive for becoming and being a Member of the WTO.Their hopes for peace find a distant echo, what U.S. President Abraham Lincoln called the mystic chords of memory,7 in this case a first founding principle of the multilateral trading systems striving for peace.For these fragile economies, the link of expanding their trade through integration into the world economy to their own economic growth, to increasing stability and thereby improving the possibility of sustaining peace is not a quaint theoretical notion, it is a pragmatic policy at the core of their survival as nations.

Economic growth through trade does not guarantee peace.It did not for the nations that entered into the First World War, all of whom enjoyed robust trading relationships with each other before they began engaging in one of the bloodiest of human conflicts.Trade does, however, help increase the chances for peace to be achieved and maintained.There is no peace where there is complete uncertainty in trade relations.Moreover, throughout history, cutting off trade has been a method of warfare.In its current manifestation this can take the form of imposing export restrictions or engaging in cyber-attacks that disrupt the economies and commerce of others.It cannot be said that the WTO overregulates with regard to such measures.

And the earth was without form, and void;

and darkness was upon the face of the deep8

Homo Sapiens for hundreds of thousands of years apparently invented nothing.There was no clear physiological reason for this, no limits imposed, insofar as anthropologists know, due to human brain size.One answer to this paradox may be that inventiveness requires at least a modicum of a stable environment.

This is also true of entrepreneurial activity.It is an axiom of business that it needs a degree of certainty, of predictability, in order to plan, to take risks.The word stability also figures in the opening line of the ITO Charter quoted above:

RECOGNIZING the determination of the United Nations to create conditions of stability.

The entirety of the GATT and the WTO rule book, including the accompanying procedures, are designed to impose a degree of order for the conduct of global commerce.Tariffs are not to exceed contractually committed levels other than in certain limited and usually temporary circumstances.This obligation is contained in one of the cornerstone commitments of the GATT Articles, set forth in Article II.In addition, under WTO rules, proposed standards are to be notified in draft for comment by other WTO Members.Transparency is required throughout the two dozen agreements that constitute the WTOs rulebook.The grand design of the entire sweep of WTO rules and procedures is to provide greater certainty for world commerce, to create a degree of stability that enables trade to take place and entrepreneurs to plan.

None of this is perfection.What exists at present was the result of a common effort spanning just over seven decades to provide order.The result, the WTO, provides conditions governing almost all of world trade.Even with whatever shortcomings in coverage or compliance that are identified, this is a remarkable achievement providing greater harmony for the governments and the peoples of the planet.

There can be no stability without the rule of law.In its absence is anarchy or despotism.There is little reason to have international agreements if they are not going to be adhered to.In history there are many examples of treaties not being lived up to.That does not mean that international agreements are not useful.They improve the conditions for international commerce.

The WTO functions not in the first instance on dispute settlement, which is more often than not lengthy, cumbersome and expensive.It functions on self-restraint.The legal maxim pacta sunt servanda, agreements are to be obeyed, largely works, from the time of the 17th century Dutch legal scholar Hugo Grotius to the present.It is the idea that a countrys word, once given, is to be relied upon provides support for achieving the goals of post WWII liberal internationalism.

Trust must be built by conduct over time that induces a willingness of others to rely on a countrys promises about its future behavior.In nuclear arms limitation negotiations, this conduct consists of confidence building measures.This is a description of how sufficient trust could be created between adversary nuclear powers that they could find common ground to avoid destroying each other and the planet.That WTO Members will in general live up to their obligations is the basis for trust, the central factor underlying the success of any system of international relations that does not rely on coercion.Every social system depends on trust.The alternative is chaos.

Returning to the opening words of the Havana Charter for the ITO:

RECOGNIZING the determination of the United Nations to create conditions of stability and well-being

Stability by itself does not produce well-being.Stability can as readily promote stagnation as economic growth.It is a pre-condition not a guarantee of improvement in the economic lot of trading nations and their peoples.Nor does trade guarantee economic growth.It is a multiplier, an accelerant of possibilities.As theorized by Adam Smith and elaborated upon by David Riccardo, specialization within an economy and then internationally allows for a higher level of income on average.It does not address distribution of benefits, just that there are far more economic benefits to share with trade than without.The major determinants of trade flows are macroeconomic forces, but liberalized trade taking place within a context of agreed rules has a positive effect, while trade restrictions have a negative effect.

That there have been major benefits from trade since in the post-WWII period should be beyond dispute.As noted, trade is a large multiple of what it was in 1947, and from what it was when the WTO was founded in 1995, and so are the levels of national and global income.In addition, the reduction in the levels of global poverty has been dramatic.

Well-being is more than economic efficiency.The WTO charter (the Marrakech Agreement) sets out as a purpose:

full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services

It is to have broad societal benefits.The mosaic on the wall of the main entrance to the Centre William Rappard in which the WTO makes its home was inherited from the International Labor Organization.It reminds any visitors who pause to read it that a concern of the house must be to provide social justice.

Whereas universal and lasting peace can be established only if it is based upon social justice; .

The mosaic also refers to:

the protection of the worker against sickness, disease and injury arising out of his employment . . ..

The plain meaning of the term well-being must also be read to include health.Aside from national security, which is the province of the United Nations and nation-states, well-being rests on both global health and economic circumstances.The hard lesson of the pandemic is that a global health crisis gives rise unavoidably to a global economic crisis.Both inevitably involve trade policy.How countries react matters.

A fundamental measure of the value of the WTO, and the multilateral trading system it embodies, is how well it serves the well-being of the worlds peoples.While the WTO Members might be excused by the suddenness of the arrival of COVID-19 for not having thus far formulated a collective response, this justification would have lost any force when and if the coronavirus returns as predicted in the fall for a second wave.And there will be no excuse at all for a lack of preparedness for future pandemics.

In the relatively near future, the current concerns over export restrictions will be remembered as being relatively minor occurrences as compared with any differentiation among nations in the availability of an effective vaccine.

In the Atlantic Charter,9 the document that Franklin Roosevelt and Winston Churchillissued to state their aims for the world that they envisaged as emerging following the Second World War, they stated that they would:

endeavor, with due respect for their existing obligations, to further the enjoyment by all states, great or small, victor or vanquished, of access, on equal terms, to the trade and to the raw materials of the world which are needed for their economic prosperity;

The ideal of equality has a distinguished, if relatively modern, pedigree.The founding first principle of the United States, enshrined in the most famous of its documents of origination, the Declaration of Independence, is that All men are created equal.This is a statement that has echoed across the ensuing centuries and around the world.Similarly, equality is a founding principle of France, adopted by Maximillien Robespierre,10 stated as one of three central objectives of the French republic -- libert, egalit, fraternit.It is a powerful organizing mandate.

Equality is an unstated principle of the WTO.All WTO Members have an equal right to speak, vote (although operating by consensus has eliminated voting, and instead gives each the unspecified right to join, abstain, or block a consensus) and table proposals.All countries regardless of size have a right to demand support from the Secretariat for such activities that they wish to pursue at the WTO.Moreover, the principle of equality conveys with it the concept of inclusiveness, often cited as one of the hallmarks of the organization.11

Of course, equality is an aim, not an instant result.Within a domestic economy and among nations, there is little equality.In the WTO, as often elsewhere, the levels of capacity of Members differ.In physical terms, for example, some delegations to the WTO are nonresident, not being able to afford maintaining a permanent mission in Geneva.Moreover, many country representatives have multiple responsibilities within Geneva, covering not just the WTO but also a number of other international organizations.And some have responsibilities to represent their country in Bern or in more than one capital.Capacity is one limit on enjoying equality.

How well the principle of equality works depends on whether those WTO Members with greater capacity take on proportionally greater responsibilities for the success of the common endeavor -- the functioning of the organization, its maintenance and growth.Fortunately, a number of the small and medium-sized members do take on a higher than average level of responsibilities.

Equality of treatment is imbedded in the GATT 1947 and WTO/GATT 1995 in the principle of nondiscrimination.It is sufficiently basic to the DNA of the GATT that it occupies pride of place in its first provision, Article I.Nondiscrimination is the rock upon which the church of multilateralism is built.A close relative of nondiscrimination is national treatment, which is a requirement of nondiscrimination as between domestic and foreign products for certain internal purposes, such as internal taxes.National treatment is installed as the third of the first three GATT articles.

Nondiscrimination (also called MFN, or most-favored-nation treatment) is a rule by which most of world trade takes place.It still dominates despite the proliferation of preferential trade agreements.These sub-multilateral arrangements, many bilateral and some regional, are designed to offer better treatment to subject imports than products from other countries receive.This occurs because it is often impractical for businesses to meet requirements of rules of origin (content originating from parties to these agreements).Apparently, businesses determine that it is just not worth the effort to qualify their products to meet all of the requirements of preferential trading arrangements.The administrative overhead of tracing sources of components, especially where tariffs are low, which in most instances they are in the case of industrialized countries, and in many instances, for a number of products imported into developing countries as well.

The second major departure from nondiscrimination after preferential arrangements is the advent of modern trade wars and national security-related sanctions, which may now exceed in prominence antidumping duties which are more firm-specific.These measures are selective in application.

Sovereignty is not a subject discussed at the WTO, but it is very much present.For some it is articulated openly as the desire for policy space.For others, it occurs by asserting that a given rule was inapplicable to a given measure a Member wishes to, or has, put into place.

Sovereignty is respected.That which is not regulated or prohibited by the WTO rules is, by inference, permitted. This unconstrained freedom of action has often been advanced as a positive for participants in the trading system.There are a plethora of examples of unregulated conduct.These range from most domestic industrial subsidies to measures taken to preserve an endangered species or preserve domestic stocks of products deemed to be in short supply.This use of policy space can at times result in the actions of one country having adverse consequences for the interests of others.It is also not a positive if policy space means an absence of collective action where collective action is needed.Policy space can result in too many instances of uncoordinated national actions having an adverse impact on others.This has been the case in the current global health crisis.It should be obvious, but policy space invoked by large trading countries has more of an impact globally than it being claimed by smaller countries.

Every international agreement that includes obligations requires a participant to give up to a limited degree, some element of sovereignty.This occurs because not all actions that it will might like to take would be consistent with the agreement.While under WTO rules, it may still be completely free to act in a manner not in conformity with the agreement, it may pay a price for doing so.International agreements are entered into because the participating country determines that any narrowing of complete freedom for national action is more than offset by the gains to the nation from the restraints imposed on the actions of others. There is a willing trade-off of some flexibilities inherent in full sovereignty for reciprocal benefits.

Sovereignty in the evolution of the trading system is also preserved through how the WTO operates.The WTO operates in practice exclusively by consensus.No multilateral agreement can be put into place without support of a substantial number of Members and at least acquiescence from the rest.A limit on making progress in fully multilateral negotiations or other fully multilateral efforts is the fact that any Member can call a halt. Consensus has come close to being defined as unanimity.Operationally, consensus may be seen as travel on a train.As on a train, there is an emergency brake handle on each car.This brake, the ability of any member to prevent a consensus being reached, is a guarantee of not only sovereignty but a form of super sovereignty.For example, one Member can block a meeting agenda from being adopted.In effect, one Member is delegated the sovereignty of all 164 Members to stop an action. Forward motion depends functions only to the extent that no Member exercises its option to reach for the emergency brake except in the case of an emergency that threatens all.Again, as with any society or organization, self-restraint is fundamental, it is a precondition for the any social interaction, any collaboration to operate successfully.

A negative consensus, a concept that is applicable to adoption of panel and Appellate Body reports is the complete absence of individual Member sovereignty.All have donated their sovereignty into a pool from which no withdrawals are permitted.The irony of the two extremes of super sovereignty and none is that the rule of positive consensus rule has allowed one Member to end the operation of the negative consensus rule with respect to operations of the Appellate Body.

Clearly there are issues with respect to the application of either a rule of positive or negative consensus, absent some guidelines as to their limits.Limits would exist to the negative consensus rule having the last word in dispute settlement determining the scope of the rules of the WTOwere the WTOs rule-making function not moribund.The result of not facing this question, which no Member has suggested be faced, is that the multilateral trading system has ceased to function fully, neither for rule-making nor for dispute settlement.

It is worth noting that the degree of sovereignty given up by any WTO Member is in fact very limited.In dispute settlement, national compliance cannot be compelled by an adverse ruling.Compliance can be incentivized by the opprobrium for a Members failing to live up to its obligations and perhaps by the threat of offsetting action.The offset occurs because countries winning a case may have the right to restrike the balance of concessions of benefit to the losing party if the value of what they bargained for is diminished by actions found by WTO dispute settlement to be inconsistent with the obligations of the WTO agreements.

A value of the WTO with respect to the exercise by Members of their national sovereignty is the ample space the WTO agreements leave for pursuing national objectives, such as actions taken to preserve public health.There is a right to do so.When there is harm to others, there may be consequences in the form of national actions of others who may also act to serve their own interests.This state of affairs would exist absent a WTO, but there would be less transparency, less of a right to be consulted, and a lesser possibility for collective action.With no WTO, there might be the illusion of greater sovereignty, that is, no constraints whatsoever on a countrys actions.But given that all other countries would be likewise totally free of agreed constraints, the individual nations sovereignty would in reality be seriously limited.

A corollary of multilateralism is that by definition it must be all inclusive, bringing in all countries which are willing to assume the obligations of the system.

In a liberal international trading order that has as precepts equality and universality, development, that is, bringing all members to a level at which they can enjoy the full benefits and undertake the full obligations of memberships of necessity must be a primary objective of the system.

It is an article of faith on the part of some and perhaps many representatives of developing country Members of the WTO that a primary purpose of the WTO is development. This is articulated in numerous statements made in WTO General Council meetings.This is also translated into a belief that special and differential treatment is a right.This position has been elicited statements from some developed countries stating that there must be differentiation among self-designated developing countries depending on the capacity of each. This apparent clash of views has given rise to a spirited verbal exchanges with no resolution in sight.

It has been said by some that the WTO is not a development institution.This argument goes beyond the parameters of the differentiation debate.It clearly is a development institution in some respects.A basic purpose of the WTO is to facilitate economic growth, that is economic development for all.Clearly countries have differing capacities to take advantage of what is offered by the WTO agreements and the degree to which they can fulfill WTO obligations.It is in the interests of all WTO Members that continuing progress be made by each and every Member to fulfill these twin objectives receiving benefits and living up to obligations.For this reason, technical assistance is made available to all developing countries, including internships for their future officials.There are on-site and in country training sessions on a wide variety of subjects, from the requirements of the Government Procurement Agreement to those of intellectual property protection.

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