Multilateral cooperation, supported by the principle of free trade, is an urgent necessity. It is the only way to not only navigate today's crises but to ensure long-term peace and prosperity.
by Xinhua writer Xia Yuanyi
BEIJING, Jan. 1 (Xinhua) -- The 30th anniversary of the World Trade Organization (WTO) arrives at a precarious moment for the global economy. The principles on which the WTO was founded -- free trade and multilateralism -- are under siege.
Rising protectionism, unilateral trade actions, and the erosion of trust in international institutions have all cast doubt on the future of the system, which has underpinned decades of growth.
In this challenging moment, the international community must come together to reaffirm its commitment to the ideals of open and inclusive trade. This is not just a matter of economic policy; it is about preserving the stability and peace that free trade has helped foster.
Over the past 30 years, the WTO has transformed global trade. By lowering tariffs, clarifying rules, and resolving disputes, it has spurred unprecedented economic growth.
Developing economies, in particular, have seen their share of global trade increase from 25 percent in 1995 to 44 percent in 2023, according to UN data, enabling them to industrialize and modernize.
China's own journey is a testament to the power of free trade. Since joining the WTO in 2001, China has rapidly integrated into the global economy, becoming a main trade partner for more than 140 countries and regions. Committed to further market liberalization, China has consistently reduced tariffs, lowering its overall tariff rate from 15.3 percent in 2001 to 7.3 percent now.
This integration has not only driven China's development but also created immense opportunities for its trading partners, highlighting the mutually beneficial nature of globalization and free trade.
However, cracks in this multilateral trading system are evident. The Appellate Body, the cornerstone of the WTO's dispute resolution mechanism, has been paralyzed since 2019 because Washington blocked the selection of judges of the body.
What is worse, unilateral tariffs and protectionist rhetoric, particularly from the United States, have raised barriers to global trade. The resulting uncertainty threatens to erode decades of progress.
In a recent article, Anne Osborn Krueger, former World Bank chief economist, cautioned that if the global trading system continues on its current path, economic growth will lag behind its potential. "The world would be poorer, more divided, and far more vulnerable to looming existential threats."
Critics of the WTO and globalization may argue that free trade has fueled inequality and job losses. However, these criticisms often overlook deeper structural issues. Failure to invest in education, infrastructure, and worker retraining has left many economies ill-prepared to adapt to rapid changes in technology and trade patterns.
The solution lies not in retreating from free trade and globalization but in reforming domestic and international systems to ensure that trade benefits are more broadly shared.
The COVID-19 pandemic, climate change, and other pressing global crises have underscored a fundamental truth: the world's challenges are deeply interdependent. No single nation, no matter how powerful, can tackle these issues in isolation.
Therefore, multilateral cooperation, supported by the principle of free trade, is an urgent necessity. It is the only way to not only navigate today's crises but to ensure long-term peace and prosperity.
China is not only a beneficiary of the multilateral trading system but also one of its staunchest defenders. It has called for reforms to the WTO, including measures to address digital trade, climate change, and the rights of developing nations.
These efforts reflect China's understanding that a stable, rules-based global trading system benefits all economies, particularly in a world increasingly shaped by shared challenges.
As said by Li Chenggang, China's ambassador to the WTO, China has always been a staunch defender of the multilateral trading system, a major participant in WTO reform, and an important driving force of the global development agenda.
With the WTO entering its fourth decade, the need for global unity has never been clearer. The international community must recommit to the ideals of free trade and multilateralism.
This means resisting the growing tide of protectionism and, more importantly, taking bold steps to strengthen the global trading system. The stakes are too high, and the time for action is now. ■