In a fractured world, WTO matters more than ever

Geopolitical tensions make the organisation's role critical. Can it adapt and reclaim credibility?

At the World Trade Organisation’s 14th Ministerial Conference (MC14) underway in Yaoundé, Cameroon, trade ministers are confronting a global economy that looks far more anxious, divided, and unpredictable than the one the WTO was created to govern. The institution was built on a powerful idea: that rules-based trade could reduce barriers and temper conflict among nations. Today, that idea is under strain.

Donald Trump’s return to the White House, rising tariff threats, wars, sanctions, supply-chain disruptions, and deepening geopolitical mistrust have transformed the global trade landscape. In many capitals, trade policy is now shaped less by openness than by security, strategic rivalry, and domestic political pressures. This has led many to question whether the WTO still retains real relevance.

It does. In fact, the more fractured the world becomes, the more necessary the WTO is.

Historically, the multilateral trading system was crucial in reducing tariffs and other trade barriers. From the GATT to the WTO, successive negotiation rounds lowered duties, curbed arbitrary restrictions, and made global commerce more predictable. These rules did not eliminate disputes, but they made them more manageable and gave smaller developing countries a framework to trade without being wholly subject to power politics. This should not be underestimated.

The post-war expansion of trade rested on institutions, rules, and negotiated commitments, with the WTO at the centre. It created a system in which disputes were meant to be handled through law, consultation, and multilateral discipline rather than unilateral coercion.

The challenge in 2026 is different. The issue is no longer reducing barriers but managing the collision between economics and geopolitics. The United States and China are in growing strategic competition, Europe is reassessing its dependencies, and many countries are turning to industrial policy, subsidies, local-content rules, and export restrictions in the name of resilience, security or self-reliance. Wars and regional conflicts have exposed shipping routes, destabilised food systems and increased energy volatility. Uncertainty has become a structural feature of global trade.

This is precisely why the WTO remains important. The organisation cannot eliminate political conflict, but it can limit the extent to which conflict turns into uncontrolled economic fragmentation. Without it, the world would drift further towards retaliatory tariffs, competing blocs, and selective rules shaped by the strongest economies. That would be especially damaging
for smaller countries, which lack the leverage to negotiate on equal terms with major powers. For them, multilateral rules are not a matter of idealism, but of survival.

But if the WTO is to remain relevant, it cannot continue as if nothing has changed. It must adapt to present realities.

Reform is the alternative

The first task is to restore confidence in dispute settlement. A rules-based system cannot function if its enforcement mechanism is paralysed. The Appellate Body crisis has weakened the WTO’s ability to uphold its rules and eroded trust in the institution. Restoring a credible dispute-settlement process must therefore be a top priority at MC14.

The second task is to move beyond the illusion that every issue can be resolved through a grand consensus among all members. The WTO is too large, too diverse, and too politically divided for that. Insisting on universal agreement has too often produced paralysis. A more flexible approach is needed. Carefully designed plurilateral agreements on digital trade, investment facilitation, environmental goods, and supply-chain resilience may not satisfy everyone, but they are better than institutional drift. The WTO must remain inclusive, but inclusiveness cannot become an excuse for inaction.

The third task is political as much as institutional. Defenders of free trade can no longer rely on abstract claims that liberalisation automatically benefits all. In many societies, globalisation has come to be associated with job insecurity, regional decline, and unequal rewards. Some of these concerns are overstated, but many are real. If the WTO is to regain legitimacy, the broader trade system must show it can coexist with fairness, development, and social stability. That means greater attention to food security, development needs, and policy constraints facing poorer countries.

The fourth task is crisis management. Today’s disruptions are often driven not only by tariffs but by abrupt policy reactions: export bans on food, restrictions on fertilisers, curbs on medical supplies, and sudden controls on strategic goods. The WTO should play a stronger role in promoting transparency, discouraging panic-driven restrictions, and creating mechanisms for consultation during emergencies. Its relevance lies not only in opening trade but also in preventing avoidable disruption.

None of this will be easy. The WTO reflects the divisions of its members and cannot stand above politics entirely. It has often seemed slow, weak, and out of step with current realities. But abandoning it would not make the world more stable or just. It would only leave global trade more exposed to unilateralism, coercion, and uncertainty. That is the core message ministers should recognise in Yaoundé. The choice is not between a perfect WTO and some better alternative waiting in the wings. No such alternative exists. The real choice is between a reformed WTO and a world in which trade is increasingly shaped by power, pressure, and distrust.

The world does not need fewer trade rules, but rules that are more credible, flexible, and responsive to current realities. That is the challenge before MC14. If the ministers fail, the consequences will extend beyond trade diplomacy to higher costs, weaker growth, deeper inequality, and a more unstable international order. For all its flaws, the WTO remains one of the few institutions capable of preventing the global economy from sliding further into disorder. In a fractured world, that is not a small role; it is an essential one.

(The writer is an assistant professor of Economics, Centre for Economic and Social Studies [CESS], Hyderabad)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.