Panelists Say WTO Progress May Have to Come Without US

Panelists talking about the future of the World Trade Organization are picturing a world in which the U.S. and China continue to argue about the issues of industrial subsidies and state-owned enterprises while other countries ally at the WTO to work on notifications, a binding dispute settlement process and how to share a vaccine for the COVID-19 virus around the globe.

Arancha Gonzalez-Laya, the Spanish minister of foreign affairs, said as economies seek to recover from lockdowns in response to the novel coronavirus, “the world will need more trade cooperation, not less.”

But Peterson Institute for International Economics Fellow Anabel Gonzalez, who moderated the PIIE panel on June 3, said, “COVID-19 has brought to the forefront the need to fix the WTO's shortcomings.” She said there's a risk that the crisis will further debilitate “an organization that was already suffering prior to the arrival of the pandemic.”

Gary Clyde Hufbauer, a PIIE senior fellow, said that if Trump is re-elected, “the U.S. may well be out of the game [in Geneva] for another four years.” And even if Joe Biden wins the presidency, Hufbauer said, the U.S.-China economic cold war will continue. He said that other countries will move on with regard to dispute settlement without the U.S., and that the U.S. will only stay engaged for e-commerce talks. He said he hopes that even if the WTO cannot confront the market distortions of Chinese state-owned enterprises and industrial subsidies that other countries might agree to disciplines in these areas. “I know it’s unfortunate that the big players are not together, are not on the same page, but I’m very enthused that small players are taking initiative on these areas,” he said.