The World Trade Organization (WTO) has been struggling to resolve disputes among its members for almost five years due to a consistent veto by the United States. This has effectively crippled the WTO and allowed transgressions to go unpunished as appeals stagnate. Despite efforts to revive the dispute-resolution mechanism at a WTO summit two years ago, the United States continues to block routine motions at the organization.
This trend is reflective of a broader deterioration of institutions and rules designed to promote international trade and investment. The European Union, which has a reputation for supporting free trade and environmental responsibility, is edging towards imposing duties on Chinese electric vehicles. EU officials have also conducted a raid on a major Chinese security-equipment manufacturer as part of an investigation into subsidies. Meanwhile, the United States has implemented sanctions on over 300 entities, including some in China and Turkey, for their support of Russia’s armed forces.
These unsettling new developments in global trade are raising concerns about the future of international cooperation and the potential for protectionist policies to lead to a breakdown in global economic stability. As these tensions continue to escalate, it remains unclear how long it will take for institutions like the WTO to regain their effectiveness and promote fair trade practices around the world.
