The WTO’s Other Challenge

A growing number of actors call for change in the underlying principles of the international trade system in order to promote, in particular, environmental protection, labour rights and growth opportunities for developing and least developed countries. A multitude of discussions at the WTO Public Forum, which I attended this year, revolved around trade and sustainable development. The younger generation, in particular, is hailed as a strong driver of sustainability. The United Nations Conference on Trade and Development (UNCTAD) and the European Economic and Social Committee (EESC) have called for an integration of environmental and labour objectives into the work of the WTO. This would include Sustainability Impact Assessments for new trade agreements and upscaling the EU’s experience with Trade and Sustainable Development chapters and civil society monitoring mechanisms to the WTO level.

Will this criticism (finally) lead to changes? Probably not yet anytime soon – but eventually, it could.

Indeed, there is yet no proven and specific recipe of how to promote sustainability in a free trade agreement. Where should we start, and stop, so that the agreement is attractive to businesses, the government and civil society, and also effective? The EU’s “soft” approach of establishing civil society monitoring bodies has not proven very successful so far. Moreover, if the WTO indeed decided to adopt the EU’s approach to civil society consultations, it would face a whole host of issues due to the extreme diversity of its member states and societies. Even at the level of the WTO Public Forum, sessions dedicated to sustainability are often less well attended than more “traditional” trade topics (a session dedicated to China had to move to a larger room this year). The attendees of these sessions, from what I observed, are already sympathetic to the principles of sustainability, while the more critical mass (including most business representatives, who form by far the largest group in the Forum) remain conspicuously absent.

This lack of consensus and clear direction is what makes sustainability an even greater challenge for the WTO. At least the idea of a multilateral trading system remains generally popular, and many instruments are already in place to support this. At the same time, if the WTO members are eager to “not waste a crisis”, they could make the organization stronger by integrating sustainability concerns into the multilateral trade agreements. Popular demand for a more sustainable economy is rising (here is data on the European Union and the United States), and many populist calls for increased protectionism, including Trump’s, are rooted in the idea that free trade brings decay to national economies. Addressing sustainability concerns could actually help prove them wrong.