WTO and trade war

The rationale behind the establishment of World Trade Organization was to encourage trade openness through multilateral trade agreements, boosts economic growth, and eradicate the evils of poverty and hunger. But in the recent years, the questions over the relevancy of WTO is being raised on the backdrop of US China trade war.Here, in this piece of writing, ‘WTO and trade war’ you will find the answer  for the burning ongoing question why the apex organisation fails to reconcile relations among leading economies averting further escalation.

There is lot to mention for WTO

Growth in trade volume

It is necessary to mention that the era of open market facilitated the trade participation and volume growth.As per the official data, four times steep rise in the volume of trade is witnessed since 1970s onwards.

Factually speaking, the drastic growth in trade volume is attributed to the inception of GAAT and beginning of second wave of globalization after the end of second World War.We cannot rule out the role of WTO in boosting trade volume.

Economic growth

The growth of global economy was as per expectations except 2008-09 recession.The major characteristic feature was the rapid growth in the emerging nations like China, India, Brazil etc.

Surprisingly, China maintained double digits growth rate since 1980s with India is no exception. Results borne by trade negotiations through ministerial conferences and dispute settlement mechanism, is one of the reasons.Overall, the the economic growth was around 3 percentage.

Reduction in poverty

The cause of human misery is poverty which has been substantially reduced in the last three decades.We know that the World Bank is the only source of global information.

According to WB more than 1billion people from LDCs and developing countries are freed from the clutched of misery.

China is front runner with 800 million following India and others. In 2015 the World Bank changed the poverty line benchmark from 1.25 $ to 1.90 $ per person.

Further, World Bank states that people with 10$ per day income increased by 800 million.This is the clear manifestation of rise in the middle class. In the meantime,the market share of China, India and others emerging nations increased phenomenally.

More or less, based on this analysis, we can prove that with the beginning of open market initiatives whether through GAAT or WTO,the trade volume, growth,and standard of living has improved compare to earlier.

US China trade war big blow for WTO

So far, this is the biggest obstruction for the WTO negotiations.It is going to prove counter-productive for WTO intent. US termed multilateral trade agreements against the interests of America. Therefore, they decided to bring back bilateral trade agreements in place of multilateral.Trump attributed growing trade imbalance and loss of jobs for the open market.

On the other hand,China is blaming US to instigate the possible era of protectionism.Further,it warned of global slowdown in near future. Accordingly, World Bank estimated lower growth than previous years.

China repeatedly appealing WTO to intervene to tame the ongoing race of tit for tat show of tariffs.

WTO reality amidst US-China trade war 

World Trade Organisation is an intergovernmental organisation.It provides set of rules to regulate trade agreements among member nations. Its role is to administer rules and facilitate multilateral trade agreements.However, its decision making power depends on the willingness of members.It cannot implement any decisions unless members give consent. When the two leading economies of world are in tussel over trade imbalance, there is hardly any room for this apex organisation to intervene.


In a nutshell, we cannot rule out the role of WTO as a catalyst in facilitateing multilateral trade agreements and free trade for collective gain. At the same time, the possible fallouts of open market must be resolved to appease counter arguments.

Equally, it is the duty of leading stakeholders to figure out workable solutions instead create deadlocks. Finally, the relevancy of WTO is totally depends on the members for which it is being created.

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