The WTO under Azevêdo: Between a Rock and a Hard Place

Description

The WTO under Azevêdo: Between a Rock and a Hard Place: Abstract

In 2020, the World Trade Organization (WTO), the cornerstone of the multilateral rules-based global trading system, faced the biggest crisis of its existence. Even before the COVID-19 pandemic swept the globe, two of the organization’s main functions – providing a negotiation forum to establish new trade rules and resolving disputes between its 164 members – had faced challenges. The crisis facing the WTO had been largely created by the growing geopolitical competition between the U.S. and China. The administration of U.S. President Donald Trump was convinced that the WTO could not handle the problems created by China’s economic ascent. It believed, first of all, that China’s status as a developing country at the WTO gave it an unfair advantage in the international trade arena. Second, it believed the WTO’s rules could not address the challenges presented by China with regard to state-owned enterprises and industrial subsidies. Third, it claimed that the Appellate Body had consistently committed judicial overreach in a way that hurt U.S. interests.

Based entirely on public information, this case gives students an opportunity to reflect on the WTO’s role in today’s global economy and how the strategic rivalry between the U.S. and China was challenging the multilateral trading system.

Teaching objectives

Analyze the geopolitical challenges underlying the modern multilateral trading system.

Explore three key subjects:

1. China’s economic growth and how it has fuelled geopolitical tensions;
2. China’s state capitalist system;
3. The diverging viewpoints of key members of the WTO regarding the international organization’s legislative and judiciary role in the global trading system.

Additional information

Teachers’ notes are available for university teachers only. Please contact the HEC Montréal Case Centre.