Many people consider the present of trade to be a bit unpleasant, so it's natural to look towards the future of trade. I was part of an effort to do so at the Baker Institute last October, and you can watch the event here. There's now a book with all of the contributions. The focus was on China, the WTO, and USMCA, and there was a good mix of perspectives and topics.
My contribution was entitled "Major threats to the WTO and the world trading system", and here's an excerpt where I tried to get creative in thinking about the problem of proliferating FTAs and how the WTO could do more here (some parts of it are more realistic than others!):
Defragmenting the System Through a Greater Role for the WTO
While the full range of political and economic problems with FTAs cannot be resolved as long as governments choose to pursue them, they can be lessened by enhancing the WTO's role here. As a variation of the old saying, "if you can't beat 'em, join 'em," what might be useful for multilateralism here is, "if you can't beat 'em, make 'em join you," i.e., incorporate them more fully into your own rules and institutions. The following are some specific suggestions for expanding the WTO's role.
First, even with the improved transparency brought about by WTO oversight, it can be hard to track developments with these agreements after they are in effect. Some countries provide short readouts of meetings that have been held, but the details are limited. It is not clear if this means not much is happening under these agreements, or that governments are simply not telling the public what is happening. There are few formal complaints brought under these agreements, but does that mean they are not being enforced or that enforcement is being done in a more informal way? What is the extent of compliance with these agreements? Are FTA preferences even being utilized?[1] To what extent are the parties updating them over time? With some exceptions, such as the recent New Zealand-China FTA upgrade, we do not hear much about these issues and the gaps in public knowledge are quite large.
The lack of transparency that has characterized these agreements can be ameliorated by relying on the WTO Secretariat to disseminate information about the activities of governments pursuant to these agreements. The WTO should host FTA documents such as communications by governments and official meeting minutes in its DocsOnline database and translate them into the three WTO working languages. Access to these documents is crucial for allowing other governments, businesses, NGOs and the general public to understand the work that is being done under these trade agreements.
Of course, a productive dissemination of documents would require governments to improve their efforts at promptly reporting on FTA activities. The short readouts that are the norm today should be replaced by publication of the full set of documents exchanged between governments during FTA meetings (to the extent that confidentiality concerns permit).
Second, it is not clear to what extent regular meetings are actually held with some FTAs, and the WTO should try to facilitate this by providing space for meetings pursuant to FTAs. If China and New Zealand, for example, need to discuss something in their FTA, the WTO building should be an option. Geneva is host to the trade delegations of many governments. In at least some cases, it would make sense for government officials in the Geneva trade missions to meet in the WTO building rather than flying to each other's capital. This does not mean that the parties can't meet outside of Geneva on their own (or virtually, which we have all gotten better at during the pandemic), but it simply provides it as an option. Geneva is not convenient for everyone, of course, and it may be that the trade officials who need to meet are not in Geneva, but hybrid meetings taking place in Geneva with experts from the national capitals participating virtually is another option.
A broader plan to enhance WTO oversight would be to set up smaller, branch Secretariat offices around the world that governments could utilize. Geneva is a long trip for some countries, and there are times when governments from a particular region need to meet and could do it more easily nearby. For example, there could be an Asia Pacific Secretariat branch, North and South America branches, an Africa branch, and a Middle East branch, possibly located in existing regional secretariats such as ASEAN and the ACFTA.
Finally, the WTO could also provide administrative support for FTA disputes. Unlike with FTAs, there is a whole institutional process for dispute settlement at the WTO. FTAs use ad hoc FTA panels that have to work out a litigation process in each dispute with limited institutional support, and make use of one-time panel assistants. Instead of reinventing the wheel each time, FTA panels could rely on the WTO Secretariat and its existing process, which has been refined over many years of frequent use. Relying on the WTO Secretariat would also eliminate the need for each FTA to come up with a list of possible panelists, which has proven difficult at times.[2] The WTO maintains an indicative list of panelists, and FTA parties could make use of it.
[1] Anna Jerzewska, "Preference Utilisation and Customs Data: The Missing Pieces of the FTA Puzzle," ECIPE, July 2019, https://ecipe.org/publications/preference-utilisation-customs-data-fta/ ("there is a pressing need to create a centrally-held, WTO-driven and standardised database of utilisation data for trade agreements. This would allow for a more systematic review of how current trade agreements have been implemented and are applied.")
[2] For problems with putting together NAFTA rosters of panelists, see: Simon Lester, Inu Manak, Andrej Arpas, "Access to Trade Justice: Fixing NAFTA's Flawed State-to-State Dispute Settlement Process," World Trade Review, Volume 18 , Issue 1 , January 2019 , pp. 63 - 79, https://www.cambridge.org/core/journals/world-trade-review/article/abs/access-to-trade-justice-fixing-naftas-flawed-statetostate-dispute-settlement-process/833E151474CD2198068A6EB094759545
