UN, WTO sidestepped by global top economies

The very business discipline in international trade is being disregarded by the world's largest economies, chiefly the United States and China. Yet, in a divided world, nations find themselves with no viable alternative but to cling to fixed and formal trade rules. According to leading international business think tanks, the United Nations (UN) and World Trade Organization (WTO) are being actively sidestepped by these superpower economies.

 

 

This is not a mere lapse in cooperation. It is a systematic erosion of the multilateral framework that has governed trade since the end of the Second World War. Recent data from the WTO, published in its Global Trade Outlook and Statistics (16 April 2025), confirms the crisis. Global merchandise trade is projected to contract by 0.2 per cent this year, and North American exports are expected to decline by a staggering 12.6 per cent. Services trade, though forecast to grow by 4.0 per cent, falls short of expectations due to the same structural instability.

 

 

WTO Director-General Dr Ngozi Okonjo-Iweala attributes these slowdowns to "persistent policy uncertainty" and "entrenched fragmentation." What she does not say outright is that the WTO itself is being steadily undermined. Since 2019, its dispute settlement mechanism has been inoperative, crippled by the U.S. blockade of Appellate Body appointments. In effect, global trade today lacks a functioning judiciary.

 

 

When powerful economies bypass the system, the very idea of a rules-based order begins to collapse. This leaves smaller economies without recourse. Many are coerced into bilateral deals that prioritise strategic leverage over fair terms. This is not globalisation as promised. This is geopolitical horse-trading under the veneer of diplomacy.

 

 

The ongoing U.S.-China tariff war-stretching back to 2018-has hardened into a quasi-permanent economic standoff. Over $700 billion in goods remain subject to punitive tariffs. Both nations increasingly prefer coercive tactics over conciliation: export controls, sanctions, technological decoupling. These are wielded as instruments of national security, but in truth, they are tools of economic intimidation. Worse, they now serve as models for other aspiring trade bullies.

 

 

Amid this disorder, the UN's broader role as a guardian of peace and development has also been diminished. UN institutions -such as UNCTAD -which were once pivotal in helping developing nations navigate complex trade dynamics, now find themselves politically constrained and financially marginalised. Appeals for fairness are drowned out by strategic rivalry.

 

 

Instead of advancing multilateralism, countries are turning to concepts like "friendshoring," "reshoring," and selective "decoupling." These approaches, while advertised as measures to ensure supply chain resilience, in fact stratify the world into tiers of "trusted" and "untrusted" economies. Those left out, mainly in the Global South, face deepening marginalisation.

 

 

Worse still, the weaponisation of industrial policy has become the new norm. The U.S. Inflation Reduction Act and the European Union's Carbon Border Adjustment Mechanism, while ostensibly climate-friendly, are viewed by many as covert protectionist tools. These policies raise legitimate concerns among developing countries, who fear being priced out of the green transition before they have even had the chance to industrialise.

 

 

The WTO, established in 1995, was once hailed as the culmination of decades of post-war consensus. Its aim: to reduce tariffs, resolve disputes, and foster inclusive prosperity. But the WTO today is paralysed by political gridlock, outdated rules, and a growing disconnect from the modern economy. It has struggled to address the rise of e-commerce, artificial intelligence, and data sovereignty. It has failed to keep pace with the realities of 21st-century trade.

 

 

In the absence of effective global oversight, private corporations and regional blocs now dominate the trade landscape. Whether through transnational tech alliances, strategic mineral deals, or secretive investment treaties, power is being re-centralised into the hands of the few. The result? A de facto plutocracy operating outside of public accountability.

 

 

Even so, not all paths forward are closed. The United Nations (UN), though weakened, retains vital convening power. Agencies such as UNCTAD and ESCAP must be revitalised to provide legal, analytical, and diplomatic tools for smaller economies. They can help level the playing field by offering negotiation training, supply chain diagnostics, and dispute-prevention frameworks. But above all, the UN must speak not only in resolutions-but in real terms of trade justice, digital equity, and sustainable development.

 

 

Enter the Commonwealth Business Council (CBC). As a platform linking 56 member countries, many of them in the Global South, the CBC is uniquely positioned to drive inclusive trade reform. It can offer a counter-narrative to exclusionary blocs like the G7 or BRICS. By building alternative trade corridors, encouraging south-south cooperation, and facilitating digital integration for micro and small businesses, the CBC can promote a shared prosperity agenda.

 

 

Also, the CBC can represent collective Commonwealth interests at the WTO and other economic forums. It must advocate not just for favourable terms, but for structural reform, calling out the misuse of subsidies, digital monopolies, and debt-trap finance. In this sense, the CBC has both diplomatic legitimacy and grassroots relevance, two qualities lacking in many top-down institutions.

 

 

Its unique advantage lies in its diversity. Unlike alliances bound by geography or ideology, the Commonwealth cuts across regions and histories. It includes large economies like India and Australia, as well as vulnerable states in the Pacific and Caribbean. This diversity, if marshalled wisely, can serve as a new axis of soft power-anchored in shared norms and inclusive development.

 

 

The slow suffocation of the WTO and sidelining of the UN are not merely institutional failures. They are symptoms of a deeper malaise: the loss of global consensus. As each power retreats into its own sphere, the vision of trade as a vehicle for peace, equity, and progress is quietly abandoned.

 

 

But collapse is not inevitable. Reform is possible, if pursued collectively. The WTO must restore its appellate function, update its rulebook, and embrace digital and climate-centric mandates. The UN must empower its trade and development arms. The CBC must rise as a pragmatic forum for inclusive economic discourse. Above all, nations must once again learn to see trade not as a weapon, but as a shared enterprise.

 

The writer is a journalist with The Daily Observer