Who Will be the MC (Master of Ceremony) of MC14?

1. The 2026 Version of the Bicycle Theory for Trade

A few decades back, in separate publications, Fred C. Bergsten, and Jagdish Bhagwati referred to the “bicycle” theory of trade. In short, the idea was that steady (continuous) progress towards freer trade is essential. If not, political forces favoring protectionism will take over, and if they do, open markets will decline. This is at least Bhagwati’s 1988 version.[1] How would Jagdish write about it today if he had shifted his focus on the institutional frailties of the multilateral edifice? 

There is little doubt that the WTO (World Trade Organization) is having the blues. Caught in a downward vortex of legislative inertia and adjudicative malaise, the WTO has an address in Geneva (for now) but its policy relevance is undeniably waning. Academic writings that MFN (most-favored-nation) trade still commands respectable numbers (ranging from 72 to over 80%) leave some impressed, and some (like me) asking how do analysts reach this number? But more importantly, even if the calculations are correct, is this the right proxy for WTO relevance today? 378 preferential schemes in force (according to the WTO webpage)[2] cast doubt on the accuracy of the calculation. A study of their content suggests that we are experiencing a forum diversion when it comes to enacting trading rules: Geneva is no more the Mecca of (modern) world trade law.

Against this background, the members meet regularly in Geneva (Switzerland) preparing the 14th Ministerial Conference (MC14) that will take place from 26 to 29 March 2026 in Yaoundé, Cameroon. Quoting from the WTO webpage: 

Ministers from across the world will attend the Conference to discuss the challenges and opportunities facing the multilateral trading system and to take action on the future work of the WTO.[3]

That sounds quite open-ended, does not it? One would not expect delegates from 166 diverse countries to meaningfully engage in a de profundis discussion on all issues affecting international trade. What is then the actual, the real purpose of MC14 amidst the current turmoil in international trade relations, one might legitimately ask? It is definitely not off the mark to ask this question. And yet, judging by the everyday agenda in the WTO, one is left with the impression that it is more or less “business as usual”. Ambassador Peter Ølberg has been appointed “facilitator” to run the “WTO Reform” process. Discussions have been ongoing for some time now, but in all likelihood Ambassador Ølberg will not have much to report in a couple of months. The process entertains three distinct issues: governance (where both decision-making and dispute settlement are being discussed); fairness (e.g., level playing-field type of considerations); and topical issues (AI; digital trade etc.). Clearly the “governance” leg is what matters. But this is an area where so far the conclusion does not lend much to hope: 

• No one wants to give up on consensus, which looks more and more like an exercise of veto-power, rather than a legitimizing factor of multilateral efforts to reach a cooperative outcome;
• The resurrection of the Appellate Body used to be the elephant in the room. In today’s world, it is more of an excuse to avoid the real issue: does the trading community still believe in compulsory third-party adjudication (irrespective whether one- or two-instance adjudication) or not? If yes (or if no), what should be the format of adjudication? The current regime (“appeals into the void”) is clearly untenable in the medium- to long run.

And of course, the question that looms even larger is whether the trading nations are still committed to non-discriminatory trade. I am not aware of any institutionalized discussions on this front. Do trading nations still buy into the idea that trade agreements provide certainty regarding competitive conditions, or will they cede the ground to those focusing on the antithetical idea that outcomes only matter?

Under the circumstances, how would Jagdish see his bicycle theory apply to the emerging picture? Would he still recommend to keep pedaling fearing that otherwise centrifugal forces would veer the regime into irrelevance? Or would he rather suggest that it is time for the bikers to rest and wait for a better day with more favorable winds? Assuming MC14 is a total (or close) failure, keep pedaling would be doing more harm than good to the multilateral system, would not it? 

2. Feasibility of Outcomes, Addressing the Real Issues, and the Bicycle To and Fro

The WTO is the house of comparative advantage. It should practice it. 

The facts are well-known. As of April 2, 2025, with the advent of “Liberation Day”, the rules-based system established by the U.S. and its allies at the aftermath of WWII is in retreat, in deep, meaningful withdrawal that is, with no obvious way back. The shibboleth of the Trump Administration trade policy so far can be summed up in other word: unpredictability. What do against this background should find its way into the agenda of MC14. The comparative advantage of the WTO delegates is to sense the feasibility of proposals advanced. This is what they know best because of their repeat interaction with each other. But feasibility is a useless concept absent contextualization. Feasible proposals must also help address the real issues that have been plaguing multilateralism: is it possible to return to MFN trade? Is it possible to return to compulsory third-party adjudication? 

Academia seems skeptical to say the least. Carvalho, Monte and Ornelas (2025)[4] have persuasively claimed that in the absence of a hegemon, a return to a rules-based system is not in the cards. Echoing (and completing in a way) the “hegemonic stability theory” advanced by Kindleberger,[5] the authors claim that the more realistic scenario in a world with no hegemon but with a few dominant players instead, is a return to a “power-based” system: none of the dominant players can impose its vision, and, as a result, they are all dis-incentivized to assume the requisite cost to do so. The likelier path forward to avoid a return to anarchy is the adoption of a “rules light” system, that is some retrocession of the current regime. This comes close to Mattoo, Ruta and Staiger (2025) who argued for “payments” to the dominant players (in the instant case, the U.S.) in order to persuade them that the “inside”- is better than the “outside option” (the exit from the regime).[6] The “payment” could take the form of allowing for deviations from MFN.[7]

In this vein, an adaptation of the bicycle theory would require from the trade delegates to ensure that feasible proposals should serve the overall objective of maintaining multilateralism (in some form): they should be looking into “payments” (“rules light”) to ensure that everyone stays on board. My two cents in this context is two-fold: retrocession from the current regime through the adoption of an optional clause when it comes to adjudication; and a change in the pay-offs of the current regime, through more active use of sectoral agreements.[8] 

Why a retrocession? Judging by revealed preferences, the membership wants to keep the U.S. under the WTO umbrella (and the U.S. shows no signs of desire to leave either). For the U.S. to meaningfully participate in the regime, dis-engagement from compulsory third-party adjudication emerges as the conditio sine qua non. The U.S. is no friend of international adjudication. It has not signed the ICJ (International Court of Justice) optional clause, and has not adhered to the International Criminal Court (ICC) either. In fact, singing on to the WTO adjudication regime was an oddity. 

The WTO could emulate the ICJ: if the U.S. does not want to observe Article 23.2 of the DSU (Dispute Settlement Understanding), then it should be allowed to opt out. Compulsory third-party adjudication, as embedded in this provision, shall be a discipline and a privilege only for those who adhere to it on reciprocal grounds. Those who do not adhere to the clause, they will also run the risk of complaining before a judge only if the intended respondent agrees to it; if not, then their unilateral reaction to perceived illegalities will of course have to observe the proportionality principle (between the contested- and the retaliatory measure). 

Why a change in the pay offs? Dissatisfaction in some quarters has to do with the current pay-offs of the multilateral regime. But the pay-offs can change. In the near future negotiation of new multilateral (or plurilateral) agreements looks (increasingly) like a pie in the sky. But negotiating sectoral agreements (that a critical mass of producers will agree to conclude) instead, could solve specific problems and it could also incite the membership to use the WTO more, as successful conclusion of a sectoral will constitute the tangible proof that legislation at the multilateral level is still possible. 

3. The MC14 in Perspective

It is unrealistic to expect that MC14 can accomplish as much as I suggest here of course. The motto in Yaoundé should be “first do no harm”. But the trading nations should start the conversation and continue thus pedaling towards a functional outcome. MC14 could still be a success, a real success, even if it did not have any “tangibles” to show in terms of declarations or (insignificant) agreements. MC14 will be a success if it can mark the first step towards an honest discussion about the current predicament of the world trading system, and point to feasible ways towards restoring (some of) the relevance of the multilateral edifice.

[1] Bhagwati, Jagdish. 1988. Protectionism, MIT Press: Cambridge, Massachusetts.

[2] https://rtais.wto.org/UI/PublicMaintainRTAHome.aspx

[3] https://www.wto.org/english/thewto_e/minist_e/mc14_e/mc14_e.htm

[4] Carvalho Cecilia, Daniel Monte & Emanuel Ornelas. 2025. Equilibrium Trade Regimes: Power- vs. Rules-Based. Mimeo.

[5] Kindleberger, Charles P. 1973. The World in Depression 1929-1939, University of California Press: Berkeley, California.

[6] Mattoo, Aaditya, Michele Ruta, and Robert W. Staiger. 2025. Geopolitics and the World Trading System. NBER Working Paper No. 33293, NBER: Cambridge, Massachusetts.

[7] In private discussions, Tom Prusa (Rutgers Economics) has asked whether we are headed to a world of trade fragmentation with free-trade areas occupying the sphere that the WTO used to occupy. At this stage, it would be foolish to exclude this possibility.

[8] For a detailed discussion, see Mavroidis, Petros C. 2025. Industrial Policy, National Security, and the Perilous Plight of the WTO, Oxford University Press: Oxford, United Kingdom.