Tariff wars: Has Donald Trump killed the WTO? – Al Jazeera

Report on the World Trade Organization’s Role in Advancing the Sustainable Development Goals Amid Global Trade Tensions

A recent event marking the 30th anniversary of the World Trade Organization (WTO) has highlighted the institution’s foundational role in promoting sustainable development and providing stability in the global economy. However, current trade tensions, historical grievances, and institutional paralysis present significant challenges to the WTO’s mandate and its capacity to support the achievement of the United Nations’ Sustainable Development Goals (SDGs).

Trade Policies and Their Impact on Sustainable Economic Growth (SDG 8)

Recent protectionist measures, notably the “Liberation Day” tariffs introduced by the United States, have created significant uncertainty in global trade. These actions challenge the principles of the rules-based order the WTO was established to uphold and have direct implications for SDG 8 (Decent Work and Economic Growth).

Key Impacts on Economic Stability and Decent Work:

• Disruption of Global Supply Chains: Unilateral tariffs have disrupted established supply chains, increasing costs for businesses and consumers.
• Retaliatory Measures: The tariffs have triggered retaliatory actions from key trading partners, escalating trade disputes and undermining cooperative economic growth.
• Threat to Job Security: The debate surrounding the WTO often centers on its perceived failure to protect domestic jobs from the effects of globalization, a core concern related to the “Decent Work” aspect of SDG 8.
• Shift to Bilateralism: The move away from the multilateral system towards a web of bilateral deals threatens to create a more complex and less predictable trading environment, hindering stable and inclusive economic growth.

Systemic Imbalances and the Challenge to Reducing Inequalities (SDG 10)

Criticism of the WTO is not new and has historically been rooted in concerns that its rules perpetuate and exacerbate global inequalities, directly conflicting with SDG 10 (Reduced Inequalities). These concerns are voiced by both developed and developing nations.

Dissent from Developing Nations:

Developing countries have long argued that WTO frameworks favor the economic interests of wealthier nations. This imbalance manifests in several key areas:

1. Restrictions on Industrial Policy: WTO rules often limit the ability of developing nations to use “infant industry” protections, such as subsidies and import quotas, which were historically employed by today’s developed countries to build their industrial bases. This hinders their progress toward SDG 9 (Industry, Innovation, and Infrastructure).
2. Agricultural Subsidies in the Global North: The continued use of substantial agricultural subsidies, such as the European Union’s Common Agricultural Policy (CAP), allows for the overproduction and “dumping” of products in developing markets. This practice undermines local farmers in countries like Mozambique and India, impeding efforts to achieve SDG 1 (No Poverty) and SDG 2 (Zero Hunger).

Intellectual Property, Public Health, and Innovation (SDG 3 & SDG 9)

The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) has been a significant point of contention, particularly for its impact on public health and technology transfer.

The TRIPS Agreement and Public Health Crises:

• The enforcement of intellectual property rights under TRIPS has been criticized for restricting access to affordable generic medicines, a critical issue during public health crises such as the HIV/AIDS epidemic in South Africa and the more recent COVID-19 pandemic. This practice directly undermines SDG 3 (Good Health and Well-being) by prioritizing patent protection over access to life-saving treatments.
• Furthermore, by creating legal barriers, the TRIPS agreement can block the transfer of technology, which is essential for developing countries to innovate and advance their economies, impacting their ability to meet the targets of SDG 9.

Institutional Weakness and Its Threat to Global Governance (SDG 16)

The effectiveness of the WTO as a cornerstone of global governance is currently compromised by internal challenges, most notably the paralysis of its dispute settlement mechanism. This institutional weakness threatens SDG 16 (Peace, Justice, and Strong Institutions).

The Appellate Body Crisis:

• The United States has blocked the appointment of new members to the WTO’s Appellate Body, rendering the organization’s highest dispute resolution forum non-operational.
• This has created a backlog of unresolved appeals and allows member states to implement trade-restrictive measures that violate WTO rules without facing enforceable penalties.
• The inability to resolve disputes through a rules-based, impartial process weakens the institution and encourages a shift towards power-based trade relations, undermining the principles of justice and strong global institutions.

Conclusion: The Imperative for Reform to Uphold the 2030 Agenda

The World Trade Organization stands at a critical juncture. The convergence of protectionist policies, deep-seated inequalities in trade rules, and institutional paralysis threatens its core mission. For the WTO to remain a relevant force for sustainable development, reform is essential. A reformed WTO must better align its rules and functions with the Sustainable Development Goals, particularly by addressing the imbalances that disadvantage developing nations, ensuring that trade rules support public health and environmental protection, and restoring its capacity for binding dispute settlement. Strengthening the WTO is a critical component of reinforcing SDG 17 (Partnerships for the Goals) and ensuring that global trade can be a driver of inclusive and sustainable prosperity for all.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 2: Zero Hunger

   The article connects to this goal through its discussion of agricultural subsidies in wealthy nations and their detrimental effect on farmers in developing countries. This practice distorts global food markets and undermines the livelihoods of agricultural workers in poorer nations.

2. SDG 3: Good Health and Well-being

   This goal is addressed in the section detailing the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. The article highlights how intellectual property rights enforced by the WTO have restricted access to affordable life-saving generic medicines for HIV/AIDS in South Africa and for COVID-19 vaccines in developing countries, leading to preventable deaths.

3. SDG 8: Decent Work and Economic Growth

   The article extensively discusses issues central to SDG 8, including global trade, job protection, and wages. It covers the criticism that the WTO prioritizes low prices over protecting “homegrown jobs and wages” in developed countries and the use of tariffs as a protectionist tool. It also touches upon how trade rules can limit the development ambitions and industrialization of poorer nations.

4. SDG 10: Reduced Inequalities

   This is a central theme of the article, which details the power imbalances within the WTO between developed (North) and developing (South) countries. It discusses how trade rules have been “heavily loaded in favour of developed country industries,” the controversy over “special and differential treatment” for developing nations like China, and how policies like agricultural subsidies exacerbate inequality.

5. SDG 16: Peace, Justice and Strong Institutions

   The article focuses on the WTO as a global institution designed to govern international trade and resolve disputes. It highlights the institution’s weaknesses and crises, such as the paralysis of its Appellate Body, which undermines its effectiveness, accountability, and the “rules-based” order it is meant to uphold.

6. SDG 17: Partnerships for the Goals

   The entire article is an analysis of the WTO, which is a primary example of a global partnership for achieving sustainable development through trade. It examines the challenges to the “universal, rules-based, open, non-discriminatory and equitable multilateral trading system” that this goal aims to promote, citing increased protectionism, tariffs, and the breakdown of dispute resolution mechanisms.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 2: Zero Hunger

  • Target 2.b: “Correct and prevent trade restrictions and distortions in world agricultural markets, including through the parallel elimination of all forms of agricultural export subsidies and all export measures with equivalent effect…”
    
    Explanation: The article directly addresses this target by discussing the European Union’s Common Agricultural Policy (CAP). It states that these subsidies lead to overproduction and “dumping” of products abroad, which inflicts “enormous damage” on farmers in developing countries, specifically mentioning Mozambique, India, and Jamaica. This is a clear example of the trade distortions this target aims to correct.

• SDG 3: Good Health and Well-being

  • Target 3.b: “Support the research and development of vaccines and medicines… provide access to affordable essential medicines and vaccines, in accordance with the Doha Declaration on the TRIPS Agreement and Public Health, which affirms the right of developing countries to use to the full the provisions in the Agreement on Trade-Related Aspects of Intellectual Property Rights regarding flexibilities to protect public health, and, in particular, provide access to medicines for all.”
    
    Explanation: The article’s detailed account of the TRIPS agreement’s impact on public health directly relates to this target. It describes how pharmaceutical companies used IPRs to prevent South Africa from accessing cheap generic drugs for HIV/AIDS and how patent protections for COVID-19 vaccines were upheld, limiting supply and causing “so many unnecessary deaths… in developing countries.”

• SDG 8: Decent Work and Economic Growth

  • Target 8.a: “Increase Aid for Trade support for developing countries…”
    
    Explanation: While not directly mentioning “Aid for Trade,” the article’s core theme is the struggle of developing countries within the WTO framework. It highlights how rules limit their “pursuit of long-term industrial development” and protect “infant” industries, implying a failure of the system to provide adequate support for their integration into the global economy, which is the spirit of this target.

• SDG 10: Reduced Inequalities

  • Target 10.a: “Implement the principle of special and differential treatment for developing countries, in particular least developed countries, in accordance with World Trade Organization agreements.”
    
    Explanation: This target is explicitly referenced in the article. It notes former President Trump’s objection to “China’s ‘special and differential treatment’ as a developing country, giving it favourable terms.” This highlights the ongoing debate and political contention surrounding the implementation of this principle within the WTO.

• SDG 16: Peace, Justice and Strong Institutions

  • Target 16.6: “Develop effective, accountable and transparent institutions at all levels.”
    
    Explanation: The article questions the effectiveness and fairness of the WTO. The neutralization of the Appellate Body by “blocking the appointment of members” is a direct example of the institution becoming non-operational and ineffective. The backlog of unresolved appeals means countries can “break WTO rules without facing penalties,” showing a lack of accountability.

• SDG 17: Partnerships for the Goals

  • Target 17.10: “Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization…”
    
    Explanation: The article is centered on the threats to this very system. Trump’s “Liberation Day” tariffs and attacks on the WTO are described as threatening the “rules-based’ order” and turning it into a “complex web of bilateral deals.” The entire piece serves as a case study on the challenges of maintaining the system described in this target.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• For Target 2.b (Agricultural Subsidies):

  • Indicator Mentioned: The article provides a specific monetary value for agricultural subsidies.
    
    Evidence: “In 2024, European farmers received 53.8 billion euros ($61.7bn) through CAP.” This figure is a direct measurement relevant to Indicator 2.b.1 (Agricultural export subsidies).

• For Target 3.b (Access to Medicines):

  • Indicator Implied: The article implies a lack of access to affordable medicines.
    
    Evidence: It states that due to IPRs, “South Africa was unable to procure cheap generic drugs, and hundreds of thousands of people died.” It also mentions that for COVID-19 vaccines, patents were used to “limit the supply, creating an artificial supply and raising the price.” The indicator would be the proportion of the population with access to affordable essential medicines, which the article implies was critically low in these cases.

• For Target 17.10 (Multilateral Trading System):

  • Indicator Mentioned: The article mentions specific tariff rates.
    
    Evidence: It refers to “‘Liberation Day’ tariffs of 10 percent on all US imports” and notes that these measures increased the “effective US tariff rate to its highest level in over a century.” This directly relates to Indicator 17.10.1 (Worldwide weighted tariff-average).

• For Target 16.6 (Effective Institutions):

  • Indicator Implied: The article points to the non-functioning of a key institutional body.
    
    Evidence: It states that the WTO’s Appellate Body “has remained nonoperational,” leading to a “backlog of unresolved appeals.” The operational status of a dispute settlement body is a clear, albeit qualitative, indicator of an institution’s effectiveness.

4. Table of SDGs, Targets, and Indicators

Source: aljazeera.com