Roberto Azevedo, the director general of the World Trade Organization (WTO), is enjoying the moment. Outside, in front of the neo-classical Centre William Rappard, the headquarters of the WTO, Lake Geneva is glittering in the spring sun, while inside, Azevedo is not facing a particularly challenging start to his day. His agenda calls for him to open the Natural Disasters and Trade Symposium – a routine duty.
Azevedo shows up in the conference hall 10 minutes late, shakes hands and chats briefly with colleagues. He is met with goodwill on all sides – which has become a rarity for the guardian of free trade in these turbulent times.
The director general then speaks about how free trade can help countries recover from earthquakes or hurricanes, listing off a few examples and making a plea for stronger WTO involvement. He ends his talk with a sort of disclaimer: “As ever, precisely how we do this is up to our members.”
It is a single sentence that perfectly describes the fundamental dilemma facing the WTO. It is essentially a system of trade treaties between its members, the adherence to which is monitored and moderated by the Geneva-based organization. In times of crisis, everyone looks to the 630 men and women who work in the Centre William Rappard, but the WTO takes no initiative. Everything it does, the organization never tires of repeating, must be at the initiative of its members.
The members, though, in particular U.S. President Donald Trump, have ensured that the WTO is itself being rocked by an earthquake at the moment. And when it is over, the global trade order could lie in ruins.
Ever since Trump introduced punitive tariffs on imported steel and aluminum, it has become clear just how serious the threat facing global economic regulations has become. And that the U.S. president isn’t shying away from openly attacking the system of global trade that has been in place since the end of World War II. “The WTO has been a disaster for this country,” he ranted in March before imposing the punitive tariffs.
Trump has also threatened the EU, and Germany especially, with automobile tariffs and has slapped $50 billion worth of duties on Chinese goods while threatening additional tariffs worth $200 to 400 billion more. Those now under attack from the White House have sought to defend themselves by imposing tariffs of their own — with the motorcycle brand Harley-Davidson having recently become the symbol of the madness of this trade war.
Azevedo is aware of how serious the situation has become. “There’s no question that global trade is facing a crisis,” he says. If tariffs were to climb to the levels they were at before the WTO was established, he continues, it could result in an even worse recession than the one seen following the 2008 financial crisis. Still, Azevedo insists, “the WTO is built for these moments.”
The problem is that the attacks from the U.S. president are not striking a unified, strong organization determined to defend itself. On the contrary, the WTO has been sidelined for some time. It has been largely forgotten by supporters of free trade because most significant trade barriers were removed so long ago. Anti-globalization activists, meanwhile, have moved away from targeting their erstwhile enemy number one, preferring instead to focus their ire on regional trade deals such as the Trans-Atlantic Trade and Investment Partnership (TTIP) and the EU-Canada Comprehensive Economic and Trade Agreement (CETA).
Yet ever since Trump’s election, it is no longer just the influence and relevance of the WTO that is at stake. But its very existence.