A View on Future Roles of The WTO: Should There be More Soft Law in The WTO

It has been more than ten years since the Doha Development Agenda (DDA) was initiated and there has been little significant progress in negotiations. Is the World Trade Organization (WTO) losing its relevance in the governance of the international trade order? The writer argues that, despite this pessimistic picture, there will be roles of the WTO in building a new international trade system. Although the WTO has accomplished a tremendous success in the dispute settlement area, it has failed in conducting negotiations to create new rules and this is largely due to the change in power structure within the WTO. The Quadrilaterals (U.S., EU, Canada and Japan) (QUAD) countries which played a central role in the Uruguay Round Negotiation have declined in their powers and influences and the Brazil, Russia, India, China and South Africa (BRICS) have emerged as new trade powers. This has created a stalemate and often negotiations come to deadlock. Faced with this situation, trading nations have concluded many Free Trade Agreement (FTA), and Regional Trade Agreement (RTA), and recently there is a conspicuous trend toward negotiating Mega FTAs such as the Transpacific Partnership Agreement (TPP), Transatlantic Trade and Investment Partnership (TTIP), and the Regional Comprehensive Economic Partnership) (RCEP). Observers say that the multilateral trading system may be taken over by regionalism. However, Mega FTAs have their own limitations and problems. Their operations are restricted to certain regions and number of participants is limited. They will not be the substitute for the multilateral trading system as represented by the WTO. Mega FTAs may incline toward block economy and may create political tensions between one FTA vis-à-vis another FTA. Also production systems and supply chains today exceed far beyond the boundaries of FTAs. Different and sometime inconsistent trade rules of Mega FTAs may produce ‘spaghetti bowl’ situation. It is the sense of the writer that someone has to orchestrate activities of FTAs through which their rules can be converged and operations coordinated and this is a future role of the WTO. The WTO can play such a role through activities of Trade Policy Review Mechanism (TPRM) and the Committee of Regional Trade Agreements. The writer suggests that the WTO tries to establish a ‘FTA Network’ in which FTA officials are frequently convened and discuss trade rules and other matters with the view to convergence. Through such activities, there will be collegiality and esprit de corps among various FTA officials and this creates more harmonized and coordinated rules and activities among FTAs and a more harmonized relationship between FTAs and the WTO. This is a ‘soft law’ approach. Since its establishment, the WTO has concentrated its effort in creating trade rules (binding rules). It is time for the WTO to use a soft law approach as well as hard law approach.