The world trading system is in crisis

The function of the World Trade Organization no longer seems to benefit from that sharing between states, dictated by the need to encourage the process, which dates back to the nineties of the last century, of world globalization, understood as the will of the major economies to favor a complex of rules capable of guaranteeing free trade. It was a direct action against statist protections and the consequent desire to interrupt government aid to companies and the partial cancellation of customs policies, based on duties and taxes on goods and services from abroad. The revival of nationalisms, both political, military and, above all, economic, seems to have shelved the process of market liberalization, leaving only the worst parts of the effects of globalization: such as the compression of wages and the consequent increase in inequality, both on internal level, between the social classes, and on the international one, based on the profound difference in the wealth of nations. There are those who blame the politics of the United States, because of the Trump presidency, before, and that of Biden, now; however, the action of the USA arose from the behavior of China, which, in order to achieve the growth objectives it had set, based its economic action on a strong statist policy, characterized by a great authoritarianism, which could not be reconciled with the commercial structure built on democratic systems. It remains true that Biden, an internationalist by name, blocked the functioning of the World Trade Organization, preventing it from appointing officials to the WTO’s appellate body, which has precisely the function of adjudicating disputes. The central point is that the World Trade Organization can authorize the introduction of trade tariffs, only in the case of national security issues, but Washington contests this approach, arguing that this attribution belongs only to the White House, in the case of American sovereignty . One of the conditions for the functioning of the world trading system, which should be guaranteed by the WTO, is precisely the tacit agreement between states not to resort to the argument of national security, if this fails the entire system will have to be reworked. On the other hand, China’s institutional set-up does not allow for control such as the one that the WTO can exercise over democratic states, where the process of relations between the state and companies is completely visible, while in the Chinese state the mingling of public and private is less distinguishable and the subsidy system and protectionist practices are more difficult to ascertain. The American behavior, also condemned by Europe, is essentially a reaction to Beijing’s protectionist tendency, which, in fact, results in the paralysis of the World Trade Organization, unable to fulfill its role as arbiter; this causes a return to the past with international trade increasingly blocked by national tariffs and protection of international products. In practice, the evolution of international trade will meet a series of regional agreements, based on economic and political conveniences, with disputes regulated, no longer by a supranational actor, but by political and commercial negotiations, which will take place on the relative parts involved, without affecting the global scenario. Probably the ones that will be triggered will be unbalanced power relations in favor of actors with greater capabilities to the detriment of small countries: a scenario that indicates that more and more supranational bodies are needed, based on geographical criteria or even on reciprocal common interests, capable of balance the power of large subjects such as the USA or China or, even, the European Union. This will imply a political effort for the countries that are not included in these actors, aimed at promoting common actions under the aegis of already existing organizations, such as, for example, the Union of African States, strengthening their international value. The concrete risk is that these issues could cause new international tensions, going to increase the factors of global crisis, in a historical phase that is already heavily affected.