The WTO's under scrutiny because critics contend it has strayed from its original intent and needs significant reforms

Overview of the World Trade Organization: Established on January 1, 1995, the WTO succeeded the General Agreement on Tariffs and Trade (GATT) from 1947. Its headquarters are located in Geneva, Switzerland. The organization serves several key functions, including facilitating global trade negotiations, resolving trade disputes through a binding mechanism, and monitoring the trade policies of its 164 member states as of 2025. It is committed to upholding the principles of Most Favoured Nation (MFN) and National Treatment.

However, the WTO faces challenges that threaten its relevance. The Dispute Settlement System is currently dysfunctional, as the Appellate Body has been incapacitated since 2017 due to the United States blocking new appointments. Additionally, the Doha Round, initiated in 2001, has not achieved consensus on critical issues such as agriculture, subsidies, and trade facilitation.

Many countries are now opting for bilateral or multilateral Free Trade Agreements (FTAs), which bypass the WTO's MFN obligations. The organization also lacks effective compliance mechanisms to enforce transparency regarding trade barriers and subsidy disclosures, as evidenced by China's market practices. Furthermore, the requirement for unanimous decisions leads to a consensus deadlock, hindering necessary reforms, as seen with the voting block by India and the U.S.

Nevertheless, the WTO continues to hold significance as a global forum for dialogue, being the only universal trade platform with binding rules and a common framework. The Fisheries Agreement reached in 2022 represents a modest success, indicating potential for future consensus.

The WTO also plays a crucial role in maintaining a rule-based order, acting as a safeguard against protectionism reminiscent of the Smoot-Hawley era. Despite its limitations, the organization provides transparency through its Trade Policy Reviews.

Recent Shortcomings of WTO:

• Agriculture Discussions Fail: Continued deadlock on public stockholding, AMS restrictions, and domestic aid.
• Appellate Body Issues: No case can achieve a conclusive resolution because of a dysfunctional appellate mechanism.
• Failure to Manage China: WTO could not foresee or tackle market access imbalances and government-driven surplus capacities.
• US Tariff Conflicts: Trump's Section 301 and 232 tariffs weakened the WTO's dispute resolution system and Most Favored Nation principles.

Path Forward:

Appellate Reform: Restore confidence by adjusting the Dispute Settlement Body (DSB) to tackle issues of overreach.

Reassessing Consensus Rule: Implement a weighted voting system to avoid one-sided obstructions.

Digital Trade Regulations: The WTO needs to swiftly establish guidelines regarding e-commerce, data transfer, and digital products.

China Integration Review: Reevaluate regulations to tackle market distortions created by state-owned enterprises (SOEs).

Inclusive Agenda: Recognize the development requirements of the Global South while advocating for labor and environmental regulations.

Conclusion

The WTO, despite experiencing a legitimacy crisis, continues to be vital to a rules-based international trade system. It is crucial to enhance its dispute resolution, consensus-driven operations, and digital trade initiatives. Without prompt reform, it risks becoming irrelevant amidst rising protectionism.