It Is Omnipotent To Save The World Trade Organization.

December 2025: The unwillingness of some WTO members to allow plurilateral agreements to be legally adopted ignores the history of the multilateral trading system and raises questions on how the organisation makes decisions that affect its own relevance and progress. Prior to the WTO’s creation in 1995, its predecessor GATT had the means to adopt agreements first negotiated by smaller subsets of GATT members. This “variable geometry” was lost when the WTO was established. The urgency for its return is mounting.

The inertia that has been evident at the WTO for some time is in many ways a consequence of business-as-usual thinking by a large number of members. A key feature of the mindset is adherence to the working practices of consensus-based decision-making. Although the WTO makes explicit provision for the negotiation and incorporation of plurilateral agreements that apply only to signatories, consensus across the full membership is needed for such agreements to be included into the body. Thus, countries that do not take part and do not have to take any action subject to a plurilateral deal can nonetheless block other members from moving forward on the agreement.

The rules-based multilateral trade order is coming undone. The global trade environment has changed significantly in the three decades since the World Trade Organization (WTO) was founded. Security considerations have become more central to international trade relations. Nations can no longer rely on the two largest and most powerful states in the global economy to abide by negotiated trade agreements. Instead, they must consider their vulnerability to the possibility that trade dependence is weaponised and take actions to reduce such dependence.

The consensus working practice has made the WTO less relevant as a platform for governing international trade. Abuse of the provision for consensus was a cause of the failure of the WTO’s Doha Round of multilateral trade liberalisation negotiations, launched in 2001 to lower global trade barriers and make trade rules fairer. A quarter-century later, the Doha Round remains unattained, notwithstanding draft agreements that were acceptable to most countries.

The practice of consensus at the WTO impedes the pursuit of variable geometry. Variable geometry is an engineering concept denoting systems that can be configured for different conditions to enhance their performance. Examples include aircraft with “swing-wings” to provide more lift at slower speeds and the moveable nose cone of the supersonic Concorde. The concept has been adopted in the field of international relations to allows for flexibility in decision-making and rules where a group of countries can agree and move forward on a specific issue without binding all the parties to an overarching multilateral treaty.

The unwillingness of some WTO members to allow plurilateral deals to proceed ignores the history of the multilateral trading system. Prior to the creation of the WTO in 1995, new agreements negotiated under the auspices of the General Agreement on Tariffs and Trade (GATT) applied on an à la carte basis, they were binding only for those GATT parties that signed them. This acceptance of variable geometry was abandoned when the WTO was created. The new organisation required members to implement virtually all the agreements that had been negotiated during the GATT years and those negotiated during the WTO’s establishment. This was known as the “single undertaking” – a rule, with the benefit of hindsight, misconceived.

The need to apply variable geometry at the WTO in an effective way has returned with mounting urgency as the international trading order confronts unprecedented challenges. Since the 2008 global financial crisis, many countries have implemented discriminatory trade and industrial policy interventions, ranging from tariffs to subsidies and local content requirements. The shift has come sharply into focus in 2025 with the US’ decision to unilaterally increase its import tariffs from an average of less than 2% to 50% or more for specific countries and products.  

The rising recourse to trade policy activism has many drivers beyond US concerns with China and a desire to expand domestic manufacturing activity. These include China’s willingness to employ trade as a coercive instrument for foreign policy purposes; efforts by states to bolster national competitiveness and retain policy autonomy; and the use of trade by the EU as a tool to achieve non-economic objectives such as combating climate change and protecting human rights.

In response, countries can either seek to offset the negative effects of these policies by adopting similar measures or agreeing to ‘mutual disarmament’ through negotiations. What is needed is balancing the achievement of underlying objectives against the spillovers. In principle, the forum to do so is the WTO, but the organisation has not been able to serve this purpose.

Open plurilateral agreements (OPAs) – agreements between groups of countries on specific policies that are open to participation to any country willing to implement a set of agreed disciplines those which can help parties understand and learn about alternative policy options that are more effective and efficient than recourse to unilateral efforts to leverage access to markets.

While plurilateral initiatives are already being pursued in a range of areas, both within and outside the WTO, many are exploratory and involve discussions on topics as opposed to formal negotiations. To be salient to sustaining and expanding rules-based trade relations, plurilateral engagement must “move the needle” in facilitating trade in a meaningful way for international business – the key stakeholder in the global trade regime. Topics that meet this criterion include:

Regulation and taxation of digital services trade. Plurilateral discussions in the WTO on e-commerce are ongoing, focused on reducing trade-restrictive policies and digital trade facilitation, including the regulation of cross-border data flows, electronic signatures, e-invoicing, cross-border payments, and consumer protection. In parallel, countries have been pursuing plurilateral initiatives outside the WTO toward similar goals, such as the Digital Economy Partnership Agreement and the Global Cross-Border Privacy Rules Forum. Notwithstanding differences in regulatory regimes, if countries have similar goals, mutual recognition and granting equivalency status to partner-country regulatory regimes can ease trade and be a stepping stone to achieve open data transfer regimes.  

Reducing competitive spillovers of industrial policies. Revisiting current WTO rules that center on the adverse effects of foreign subsidies on national firms to recognize that some types of subsidies may be desirable to address market failures is an important subject for plurilateral negotiations. Another priority is to recognize that foreign subsidies, even if used for only a limited period, may have long-lasting competitive effects. Plurilateral agreements between states that share economic resilience and security concerns can reduce the costs and increase the benefits of pursuing such objectives by supporting stronger coordination. Examples include critical raw materials partnerships and economic security clubs that combine investment and trade policy commitments.

Governing the use of trade policy to achieve climate or environment-related goals. Engaging with trade partners on the design and implementation of mechanisms to support the green transition in ways that minimize trade costs for firms and incentivize joint action will increase the prospects for achieving underlying environmental objectives. Dialogue platforms have recently been established that may provide a basis for plurilateral negotiations, such as the 2023 Coalition of Trade Ministers on Climate and the 2025 Integrated Forum on Climate Change and Trade. What is needed is to use such fora to set up rules of the game in this area, moving away from unilateralism to cooperation.

Variable-geometry approaches to governing trade relations and facilitating trade and investment across a broad cross-section of open economies is not only a pragmatic response to rising trade challenges but an appropriate one given heterogeneity in national contexts, preferences, and concerns. Countries with strong commitment to market openness and rules-based trade, can employ variable geometry to sustain basic WTO principles and develop new plurilateral agreements to extend and update WTO disciplines. These agreements need not to include China and/or the US if the costs of involving either of the superpowers outweigh the benefits.

A common need for the pursuit of OPAs is for a mechanism or platform that clarifies government objectives, enhances transparency, supports analysis of the spillover effects of differences in domestic regulatory regimes, and considers the development of common standards. Central questions concern how and where to pursue such efforts (i.e., inside or outside the WTO?), their participation criteria (i.e., should the door be left open for American and/or Chinese participation?), and ensuring that deliberation processes consider the interests and constraints of less powerful states (i.e., how to ensure that business voices are heard, and what roles can multilateral development banks play in providing financial and technical assistance to smaller economies?).

The challenge for the multilateral trading system is to leverage leadership in countries other than the US and China to provide platforms to pursue plurilateral bridge-building efforts to govern and improve rules on cross-border trade. If the focus is on agreed good regulatory practices, these will generally apply in a non-discriminatory manner. But it may – often will – be the case that better access to markets is conditional on countries adopting and enforcing similar regulatory standards in a given area. The implication is that a conditional most-favoured nation standard, as opposed to the all-purpose principle it had hardened into, will apply for years to come. This must be part of any move towards more variable geometry.

Team Maverick.