Geopolitical Competition, Globalization and WTO Reform

Global trade and investment is increasingly characterized by systemic conflicts, giving rise to unilateral policies to attain competitiveness, national security and other noneconomic objectives. Disparate national measures motivated by all these objectives targeting the global value chains thathave helped drive globalization create policy uncertainty, increase political risk and potentially distorttrade and investment decisions. Sustaining an open, rules-based trade system calls for deliberationto help clarify underlying policy objectives, assess effectiveness and spillover effects of domesticmeasures. Policy dialogue centered on the use of specific trade concerns, already used in someWTO agreements, offers a path forward for such dialogue, one that may be more effective thanformal dispute settlement, assuming a functioning dispute resolution system can be re-established,in coping with the return of geopolitical rivalry. Plurilateral cooperation among like-minded nationson the use of trade policies to pursue noneconomic objectives, and between the large trade powerson economic policies that generate competitiveness concerns, are both a pragmatic and efficientpath forward in addressing spillovers associated with the rise of unilateral trade action motivated bysecurity considerations and domestic nontrade objectives