China makes significant contributions to WTO waiver of COVID-19 vaccine patents during MC12. (PHOTO: VCG)

Edited by Qi Liming

For almost three decades, the World Trade Organization (WTO) has been lowering barriers on trade and smoothing the path of globalization.

WTO's 12th Ministerial Conference (MC12) took place on June 12-15 at its headquarters in Geneva. During the meeting, ministers from across the world reviewed the functioning of the multilateral trading system, made general statements and took action on the future work of WTO.

Ministers from Canada, Egypt, India and other countries expressed their support for a multilateral trading system. WTO economists have estimated that if the world split into different trading blocs, it would lower the long-run level of real global gross domestic product by about 5 percent.

The trade war, inflamed by former U.S. President Donald Trump, and tariffs on allies in Europe in the name of national security, threatened to undo years of integration.

Meanwhile business has issued an urgent plea. On the eve of MC12, Business Europe and U.S. Chamber of Commerce said in a joint statement that the "primary objective" of the meeting must be to "reaffirm multilateralism and rules-based trade as the preferred path to boost global economic growth. The WTO also needs to demonstrate that it can respond to the most pressing challenges of our time, particularly health, climate change and food security."

Jane Drake-Brockman, representative of the group Australian Services Roundtable said, "This is a dangerous time for trade. We really need ministers to get a quality outcome that signals the WTO is still a pro-trade organization."

Pierre-Olivier Gourinchas, the IMF's chief economist, this month warned of a world fragmenting into, "Distinct economic blocs with different ideologies, political systems, technology standards, cross-border payment and trade systems, and reserve currencies."

And in a statement released by International Chamber of Commerce (ICC) on global business priorities, it outlined seven key recommendations for action, namely WTO reform, e-commerce, fisheries subsidies, food security, health, environmental sustainability and services domestic regulation.

According to ICC, the global business community views WTO as an essential pillar in the multilateral trading system. As end-users of the system, the global private sector strongly encourages ministers to work towards ambitious outcomes that will meet the needs of modern economies and all stakeholders.

At a time of serious global economic challenges, in the wake of the COVID-19 pandemic, pressure on global supply chains, and the prospect of high inflation and recession, ICC has released a statement on global business priorities urging ministers to take the opportunity presented by MC12 to reinforce the role of the WTO and to ensure its effectiveness to meet ongoing and new global challenges.

ICC Secretary-general John W.H. Denton AO said, "World trade negotiations are now at a crunch point. Ministers need to take hard decisions and not underestimate the importance of outcomes for business."