When the World Trade Organization (WTO) was launched in 1995, world leaders, and orthodox academics promised it would usher in a new era of win-win globalization that would unleash economic growth, narrow the gap between developing and developed countries, reduce poverty in the developing world and support higher wages and good jobs in advanced and developing economies alike. Fast forward 26 years, these outcomes have not materialized. Instead, today, the WTO has become infamous worldwide for rules that are undermining the global fight against COVID-19. The WTO’s Agreement on Trade-Related Aspects of Intellectual Property’s (TRIPS) requires countries to enforce intellectual property monopolies for pharmaceutical firms. This is preventing the needed production scale up of COVID vaccines, treatments and tests.
Almost every WTO member supports a temporary waiver of these barriers to end the pandemic but for more than a year, this proposal is being blocked by a small, powerful group of wealthy countries. And after decades of WTO-implemented hyperglobalization rich and poor nations alike have proven to have a lack of resilience in supply chains and production capacity for vaccines, medicines and other pandemic necessities. The COVID crisis has spotlighted deep structural problems with the WTO.
Indeed, the damage caused by the WTO’s model of hyperglobalization has been well documented.
At a time when the WTO’s disfunction is on full display as it not only fails to help end the COVID crisis but deepens it while the WTO dispute settlement system remains derailed because of its overreach and the body bends its own rules to negotiate rump plurilateral agreements outside WTO procedures, it is imperative to realize a new model that — instead of exacerbating insecurity, inequality and instability — facilitates the improvement.