World Leaders Must Play Their Part in Rethinking Trade so It Can Help Us “Build Back Better”
Eight candidates are now competing to head the World Trade Organization (WTO)—reviving a long-overdue debate about how trade can support sustainable development, especially now, as the world continues to weather the COVID-19 crisis and lays the groundwork to rebuild. But while the question of who will lead the WTO is important, political leaders must also renew their commitment to working together across forums if trade is to contribute to a more equitable, sustainable, and resilient post-COVID-19 world.
Today, the WTO is overshadowed by tensions between major economies, putting into question countries’ ability to find multilateral solutions for global problems. Meanwhile, the pandemic has shown how critical it is for them to collaborate on trade—not just so essential goods such as food and medicines can cross borders, but to safeguard decent work and livelihoods, and help us ensure a just transition to a low-carbon economy.
With COVID-19 sparking border closures, decreases in trade volumes, job losses, and declines in remittances, the world economy is more fragile than ever. Governments and companies now need to rethink how trade can contribute toward sustainable, equitable economies by realizing fundamental human rights and promoting human freedom and dignity. That means ensuring that trade and markets help improve respect for labour standards, create jobs, improve gender equity, and contribute to sustainable development across its core pillars.
The pandemic has shown how critical it is for world leaders to collaborate on trade—not just so essential goods such as food and medicines can cross borders, but to safeguard decent work and livelihoods, and help us ensure a just transition to a low-carbon economy.
It also means making sure that actions taken by the largest exporting and importing countries don’t harm producers and consumers in the world’s smallest economies. More equitable trade rules also need to ensure that countries can foster the resilience of their value chains to external shocks, including by adding value to their domestic output.
Achieving progress in these areas will require more than just improved trade policies and rules. Governments will need to rebuild trust and show they are willing to make the tough political choices to ensure a better world post-COVID, rather than reverting back to old positions and holding onto past disagreements. They will have to engage in meaningful global collaboration at the WTO to address the impacts of the pandemic on its most vulnerable Members, who were and are dependent on the interconnected globalized world that was largely designed to support the most powerful.
They will also have to reassess the current trade rulebook in light of the pandemic, and rewrite its provisions where needed to help ensure protection of the most vulnerable from future trade shocks, working with the International Labour Organization (ILO) and others. The trade community will have to engage more closely with the UN’s climate change talks and find creative, robust ways to tackle trade-related issues, such as carbon pricing and fossil fuel subsidies. In addition, they will have to deliver an ambitious and fair outcome at the WTO on fisheries subsidy reform in time for the 2020 deadline set in Sustainable Development Goal (SDG) 14, as one step toward the conservation and sustainable use of the earth’s resources, while ensuring that the development dimension remains at the core of any trade negotiating process.
The COVID-19 crisis has shown us that it is more urgent than ever for trade and markets to contribute to promoting sustainability, overcoming inequality, and improving resilience. A new WTO Director-General could contribute to galvanizing collective action on the shared problems we face as we grapple with the pandemic and its aftermath.
However, achieving real change will require more than a changing of the guard at the WTO and other global institutions concerned with the governance of trade and markets. World leaders in key countries will need to agree to work together to “build back better”—and ensure that delivering equitable outcomes on trade is first and foremost when they do so.
Nathalie Bernasconi-Osterwalder is the Executive Director of IISD Europe and Senior Director, Economic Law and Policy. Peter Wooders is IISD's Group Director, Energy.