17 Future challenges for the world trading system
Drawing together a number of the issues that have been discussed in earlier chapters in this book, several themes emerge that pose major challenges to the future of the world trading system.
17.1 Governance of the World Trade Organization
While the one-country one-vote and consensus principles have served the World Trading System well for much of its history, principles that worked well when the GATT/WTO system had a relatively small number of members do not work nearly as well today with a WTO membership of 160 countries in widely varying stages of economic, social, and political development, as reflected in the gridlock in the current Doha Round of multilateral trade negotiations. However, reforming the current decision-making processes of the WTO presents formidable challenges. Moving to a regime of majoritarian or representative decision-making puts large members (such as the USA or the EU) at risk of being out-voted by smaller member countries on important issues and may threaten their commitment to the organization. Conversely, moving to some form of trade-weighted majoritarian decision-making (as in the EU) is likely to marginalize small members and threaten their commitment to the organization. An alternative strategy is to provide much greater scope for plurilateral agreements amongst subsets of members within the WTO (“coalitions of the willing”), with subsequent accession open to other members prepared to make similar commitments (a form of conditional MFN).1
17.2 Multilateralism versus preferential trade agreements
The proliferation of preferential trade agreements (PTAs)...
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