PD11 - Research Paper. Rozen-Bakher, Z. Is the World Trade Organization (WTO) has a Future under the Mechanism of Consensus in Decision-Making?: A New Framework for Achieving Successful Rounds

Rozen-Bakher, Z. Is the World Trade Organization (WTO) has a Future under the Mechanism of Consensus in Decision-Making?: A New Framework for Achieving Successful Rounds. Research Paper, PD11. https://www.rozen-bakher.com/research-papers/pd11

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Rozen-Bakher, Z.

Is the World Trade Organization (WTO) has a Future under the Mechanism of Consensus in Decision-Making?: A New Framework for Achieving Successful Rounds

Abstract

This study explores the current ineffective framework of WTO that led to the continuous failure of the Doha round over 20 years to shape a new framework for successful rounds. The study analysis indicates that the main reason for this failure is the mechanism of consensus in decision-making, rather than the increase in the number of member countries of WTO. It is illustrated by comparing WTO and UN that have similar characteristics, especially regarding their objective to maximize their member countries to achieve global order.  Accordingly, if the UN will try to pass consensus decisions, then highly likely that even a single decision won’t pass under consensus in decision-making. The study suggests that WTO should adopt a majority in decision-making to allow approving rounds. Still, without giving a veto right to superpowers in order to keep the principle that any country has the same power in decision-making based on the democracy idea that the majority has the legitimate right to pass decisions. WTO should also adopt a ‘yearly round’ instead of a ‘continuous round’ to allow yearly progress in the agenda of WTO. The study concludes that under the new framework of WTO only successful rounds will be conducted in the future. Importantly, WTO will also regain its significant role as a leading player that is responsible for preserving the global order in relation to international trade and FDI to prevent trade wars, and even real conflicts if trade wars may get out of control, especially during crises.

Keywords: Decision-making; Doha Round; Foreign Direct Investment (FDI), General Agreement on Tariffs and Trade (GATT); Geopolitical Risks; International trade; Public Policy, Trade wars; World Trade Organization (WTO)

Introduction

The failure of the Doha Round over 20 years (Bergsten, 2005; Wolfe, 2015; WTO, 2019) raises a doubt about the relevance of the World Trade Organization (WTO), as well as an uncertain about the future of WTO, and even a worry that lack of successful rounds may lead eventually to dissolve of WTO. Many arguments were suggested in the literature to explain the failure of the Doha Round (Evenett, 2014; Gallagher, 2007; Wolfe, 2015), but the current literature has less discussed which new framework is needed for WTO for creating successful rounds. Hence, this study explores the main reasons for the failure of the Doha Round in terms of the weak factors of the current framework of WTO with the aim of shaping a new framework for completing successful rounds in a reasonable time.

To address this goal, this study explores the past-present-future of WTO to reveal the prominent reasons for the failure of the Doha Round with the aim of developing a new framework to allow completing successful rounds in the future. More specifically, this study presents a conceptual research model for revealing the weak factors of the current framework of WTO to explain the continuous failure of the Doha Round, as illustrated in Figure 1. Accordingly, this study examines the foundations for the establishment of WTO in terms of the main objectives and principles of the General Agreement on Tariffs and Trade (GATT) alongside the successful rounds of GATT to reveal the weak factors of the current framework of WTO.  The study also examines the main new objectives of WTO after its establishment, which are reflected in the objectives of the Doha Round. Besides, the study also looks at the future of WTO to reveal which new framework may meet the future requirements of WTO under the circumstances of the 21 century, namely a large number of member countries of WTO along with trade wars among its members. This analysis of the past-present-future of WTO may help to understand the main reasons for the failure of Doha Round to develop a new framework that may help WTO to regain its role as the leading global organization that responsible for maintaining the global order related to international trade and Foreign Direct Investment (FDI) to prevent trade wars.

The paper is organized, as follow. The next three sections lay down the conceptual research model of this study to reveal the weak factors of the current framework of WTO with the aim of explaining the continuous failure of the Doha round. The following section discusses the new framework that is needed for WTO for the creation of successful rounds. The final section presents the conclusions and discusses the implications for policymakers. 

The Foundations for Establishment of WTO: Objectives, Principles, and Rounds of GATT (1947-1994)

The WTO was established in the year 1995 by 128 member countries following the Uruguay Round (Preeg, 2012; WTO, 2019).  The establishment of WTO is based on the foundations of the multinational trade agreement of GATT (Hoekman & Kostecki, 2009) and additional multinational trade agreements, such as the General Agreement on Trade in Services (GATS) (Calle, 2015; Moak, 2017; WTO, 2019). Nevertheless, since the establishment of WTO, some updates were made to GATT, still, the original objectives and principles of GATT are continued to serve as guidelines for the decision-making and rounds of WTO.  Considering that, this section analysis the objectives and principles of GATT that serve as the foundations for the current framework of WTO to reveal if some objectives and principles of GATT may explain the failure of the Doha round.

Objectives of GATT

The GATT (Bhagwati, 2017; Brewer & Young, 2000; Hamblet, 2011; Verwey, 1990; Srinivasan, 2019; WTO, 2019; Zeiler, 2012) is considered as the most important multilateral trade agreement. The original agreement was signed in 1947 by 23 countries, such as the USA, Canada, Australia, France, UK, Brazil, India, and South Africa to encourage free trade worldwide (Brewer & Young, 2000; Coppolaro, 2018b; Dam, 1970; Hamblet, 2011; WTO, 2019). Over the years, many countries joined GATT, while other countries left GATT, still, some countries left GATT and years after that, they re-joined again to GATT. For example, China was one of the 23 original signatories of GATT in 1947, but after the revolution in 1948, China stopped de-facto its membership in GATT, and in 2001 China joined again to WTO (WTO NEWS, 2001).

The GATT was originally signed to provide solutions for several key topics related to international trade alongside creating a legal and business formation to organize the international trade and FDI under formal procedures that are accepted by all member countries of GATT (Bhagwati & Panagariya, 1996; Hamblet, 2011; Linden, 1992; Ritzer, 2012). Thereby, the establishment of WTO was based on four main objectives of GATT that still guiding WTO until today, as follow (Bhagwati & Panagariya, 1996; Calle, 2015; Dam, 1970; Hamblet, 2011; Hudec, 1980; Hudec et al., 1993; Kovenock & Thursby, 1992; Linden, 1992; Moak, 2017; Petersmann, 1994; Ritzer, 2012; Srinivasan, 2019; WTO, 2019; Zeiler, 2012):

•   Development of International Trade Rules. One of the main objectives of GATT was to develop a set of accepted rules for commercial behaviour related to the international activity of Multinational Enterprises (MNEs). Before the GATT, international trade and FDI activities operated without accepted formal rules between countries, so GATT sought to fill this gap by creating a formal mechanism for international trade and FDI for the benefits of the countries worldwide.

•   New Rounds for Formation New Trade Agreements. The most important objective of GATT was to establish a forum for international negotiations to achieve stable and liberal conditions for international trade and FDI. This objective has led to the creation of rounds of talks between the member countries of GATT, resulting in decisions that reflect the adoption of new rules that shaped the GATT over the years. In other words, a "round" of talks under the GATT was de-facto a forum for international negotiations that took place between the member countries of GATT. That is done in parallel with the ongoing work of the organization. Thereby, new problems were added to the agenda of each new round to resolve them during the round. Importantly, new rounds aim at tackling new problems that require solutions through political decisions. Therefore, in the rounds usually attend highly senior representatives of the member countries to allow approving the round.

•   Forum for Resolving Trade Disputes. MNEs operate under different national legal systems in host countries, which also differ from the national legal system of the home country. These legal circumstances have led frequently to trade disputes between MNEs from different countries, as well as to disputes of international trade agreements between governments.   That’s led to the creation of a forum for resolving international conflicts related to international trade and FDI. Hence, this forum has aimed to set rules for international disputes regarding trade, commercial and business issues in cases of conflicts between member countries of GATT or between MNEs from these countries. Notably, the regulations and rules that have been formed over the years under GATT and its sub-agreements alongside the resolutions that have been accepted in various forums of trade disputes were shaped the international law regarding international trade and FDI.

•   Formation of Additional Agreements related to Specific Issues or Certain Sectors. Another major objective of GATT was to form additional multinational trade agreements between the member countries of GATT related to specific trade issues or certain sectors, which are not covered under the main agreement of GATT. Hence, over the years, additional international agreements were formed between some member countries of GATT that addressed specific issues or certain sectors, such as the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs).

Principals of GATT

The establishment of WTO was also based on six principles of GATT that still serve as the administrative framework for its operation and decision-making until today, as follow (Bhagwati, 2017; Brewer & Young, 2000; Dam, 1970; Hamblet, 2011; Rosset, 2006; Srinivasan, 2019; Verwey, 1990; WTO, 2019; Zeiler, 2012):

•   Voluntary Agreement. The GATT is a voluntary agreement, so countries join GATT only based on their free will, still, once they joined, they are obligated to its agreement. In other words, countries that decided to not join GATT are not obligated to fill the conditions of GATT. Besides, member countries can decide at any time to leave GATT.

•   Consensus in Decision-Making. The consensus in decision-making considers as one of the most fundamental principles of GATT. Thereby, any decision-making to confirm new rounds or adding new conditions to GATT or changing in the existing conditions of GATT must be agreed upon by all member countries of GATT. In other words, any member country of GATT, whatever the country is, has the right to oppose any new decision, regardless of the country size or its geopolitics status or its economic importance in the global arena. That’s mean that if even a single member country opposes the confirmation of a round or any new decision, then the round or the new decision won’t pass. Thereby, under consensus in decision-making, each member country has de-facto a veto right regarding any new decision. Given that, the number of member countries of GATT impact the complexity of the consensus in decision-making, namely greater number of member countries may complicate the ability to confirm round or any new decision in a reasonable time under the mechanism of consensus in decision-making.  

•   Non-Discrimination. According to the non-discrimination principle of GATT, international trade should be carried out without discrimination between the member countries of GATT. Hence, a member country of GATT is prohibited from discriminating one country over another country regarding international trade and FDI. In other words, a member country of GATT is not allowed to give priority in trade to one country over another country. However, if exists a bilateral trade agreement between two countries or a regional trade agreement between several countries, then it may give priority to the member countries that have bilateral and regional trade agreements over member countries that only related to the multinational agreement of GATT. It means that bilateral, regional, and multilateral trade agreements outside GATT are de-facto above GATT. Accordingly, the principle of non-discrimination of GATT is less relevant de-facto when many bilateral and regional trade agreements exist between countries worldwide.

•   Transparency. The principle of transparency seeks to create a simple and clear international trade policy that is supposed to be reflected in free competition and fair trade while avoiding any manipulation policy via indirect restrictions and barriers to trade and FDI. Hence, the transparency principle tries to reduce any trying by a member country to not fulfil its obligation to the conditions of GATT via hiding illegitimate restrictions.   

•   Protection of National Agricultural Production. One of the controversial principles of GATT is the protection of national agricultural production. This principle of GATT has formed due to ideological and cultural reasons, as well as due to life quality and environmental reasons. However, other scholars argued that the main motive for justifying the protection of agricultural production is because of 'Food Secure' (Barrett, 2010; Maxwell, 1996) that refers to the food availability and to the ability to purchase food at normal prices in the market (Rutten et al., 2013). Food insecurity occurs mainly during long crises and wars, such as the severe food shortage that happened in Yemen as a result of the war with Saudi Arabia (Walsh, 2018), which caused harsh starvation and loss of life, especially among Yemeni children (France-Presse, 2018). Even the pandemic COVID-19, has raised concerns for food insecurity, especially during the lockdown (Ann & Norwood, 2020; Gundersen et al., 2020). Nevertheless, many countries are still concerned about food security due to the bad memory of insecurity food during WWI and WWII that led to a dramatic increase in food prices and even to a creation of a black market for food (Gerhard, 2009, 2015). Considering the above, the protection of national agricultural production is supposed to ensure an adequate supply of agricultural products in a country during wars and emergencies situations. That's based on the assumption that during regional and global long crises and wars, it may be problematic to transport food by sea, air and land. Thereby, from the viewpoint of the sovereign country, it is crucial that a country maintains a capacity of national agricultural production to keep an adequate supply of agricultural products during emergencies situations. In spite of the above, there is a disagreement among researchers and policymakers about the potential impact of international trade and FDI on 'food secure' at the national level (Santangelo, 2018). Therefore, there are many conflicts among GATT member countries regarding the liberalisation of agricultural production, which hinders the ability to pass consensus decisions related to these issues.

•   Special Conditions for Developing Countries. This principle is based on the rationale that economic differences exist between developed markets and developing markets, so developing markets have difficulty implementing immediately all the regular terms of GATT, such as the least developing countries in Africa. Accordingly, developing countries are entitled to get permanent or temporary exemptions related to reducing or eliminating tariffs, with the aim of giving the local industries in developing countries a longer time to implement slowly and gradually the full conditions of GATT.

Successful Rounds of GATT: 1947-1994

Following the prominent objective of GAPP to form new trade agreements or to update the current ones through new rounds, then this section is focused on the complexity of the decision-making to confirm the previous successful rounds of GATT in terms of the number of the member countries that participated in the round alongside how long it took to confirm each round. Notably, over the years the objectives of each round were evolved, still, the rounds were carried out under the main objectives and principles of GATT that were guided the decision-making during the rounds. Hence, from the formation of GATT until the establishment of WTO were held eight successful rounds during the years 1947-1995, as follow (Bhagwati & Panagariya, 1996; Coppolaro, 2016, 2018a; Evans, 1971; Hamblet, 2011; Kumar, 2018; La Barca, 2016; Matsushita et al., 2015; McKenzie, 2010; McRae & Thomas, 1983; Moak, 2017; Preeg, 2012; Rausser, 2012; Ritzer, 2012; Winham, 2014; WTO, 2019; Zeiler, 2012):

•   Round I. Geneva Round. The Geneva round was held in the year 1947 and it lasted 7 months when 23 countries participated in this round. The GATT was signed during this first round.

•   Round II. Annecy Round. The Annecy Round was held in the year 1949 and it lasted 5 months when 13 countries participated in this round. The Annecy Round was focused on the process of reducing tariffs.

•   Round III. Torquay Round. The Torquay Round was held during the years 1950-51 and it lasted 8 months when 38 countries participated in this round. The Torquay Round was focused on the continuing process of reducing tariffs.

•   Round IV. Geneva Round. The Geneva Round was held in the year 1956 and it lasted 5 months when 26 countries participated in this round. Following the previous rounds, the Geneva Round also was focused on reducing tariffs.

•   Round V. Dillon Round. The Dillon Round was held during the years 1960-61 and it lasted 11 months when 26 countries participated in this round. The Dillon Round was focused on the continuing process of reducing tariffs, as well as on eliminating certain tariffs.

•   Round VI. Kennedy Round. The Kennedy Round was held during the years 1964-67 and it lasted 37 months when 62 countries participated in this round. The Kennedy Round was focused on changing existing clauses of GATT alongside new interpretation and expansion of the original clauses of GATT.

•   Round VII. Tokyo Round. The Kennedy Round was held during the years 1973-79 and it lasted 74 months when 102 countries participated in this round. The Tokyo Round was focused mainly on indirect duties, such as the discriminatory use of standards, licensing and testing procedures. The success of this round was limited since most of the problematic topics remained outside the GATT, which affected the joining of new countries to GATT.

•   Round VIII. Uruguay Round. The Uruguay Round was held during the years 1986-94 and it lasted 87 months when 123 countries participated in this round. The Uruguay Round aimed at improving the GATT in many areas. First, following this round, the WTO was established. Second, the round was focused on reducing tariffs of industrial, agricultural and textile products, as well as on liberalisation of trade in the service sector. Third, this round also addressed the issue of intellectual property.

Additional Objectives and Principles after the Establishment of WTO: 1995-Present

The WTO was established based on the original objectives and principles of GATT, as well as based on the framework of eight successful rounds, still, new objectives and principles were added to the role of WTO after its establishment, as follow (Kumar, 2018; La Barca, 2016;  Moak, 2017; Preeg, 2012; Qin, 2012; Winham, 2014; WTO, 2019; Zeiler, 2012):

•   Resolving New Problems. One of the important objectives of WTO is to conduct new rounds to tackle new problems and new trade topics that are still not covered under the GATT.

•   Elimination of Tariffs and Quotas and Prevention of Indirect Barriers. One of the most challenging objectives of WTO is the elimination of direct and indirect restrictions and barriers alongside the reduction of tariffs related to all products, including textiles, food and agriculture. Besides, the WTO is supposed to prevent the raising of tariffs or the creation of new quotas and restrictions.

•   Monitoring Violations of GATT. An additional challenging objective of WTO is to monitor that GATT is implemented by the member countries without any violations, such as creating technical barriers to trade, violation of 'rules of origin', dumping and governmental subsidies, and violation of governmental subsidies to export and agricultural products.

•   Legal Enforcement. Beyond the role of the forum for resolving international trade disputes under the original GATT, the WTO has taken the role of giving a legal validation for settlement of international trade disputes. The legal enforcement of WTO is also related to violations of GATT by member countries, as well as to violations of other trade agreements under the WTO framework.

•   Obligation of Transparency. The WTO requires transparency from the member countries by publishing important information about international trade and FDI at the country level, especially regarding tariffs, subsidies, and any restrictions and barriers to trade and FDI. That is based on the idea that transparency may help to reduce the trade disputes among the members of WTO. Thus, the transparency under the WTO aims at creating free information about the policy of each member country of WTO, as well as about the policy of WTO.

The Failure of Doha Round (2001-Present): Consensus in Decision-making

The Doha Round has begun in November 2001 with the participation of 141 member countries of WTO, yet over the years more countries have joined the WTO, and since July 2016, the WTO includes 164 member countries (WTO, 2019).  However, despite that passed 20 years since the starting of the first round under WTO, the Doha round was not confirmed yet by the member countries of WTO (Bergsten, 2005; Wolfe, 2015; WTO, 2019). Doha Round aims at tackling several main problems, such as defining rules for transparency in governmental procurement tenders, defining rules and procedures for e-commerce, reducing tariffs in the agricultural sector, protection of intellectual property rights, and defining rules for bilateral and regional trade agreements to align them to the rules of the multinational trade agreements under the framework of WTO (Collins, 2015; Key, 2003; Gallagher, 2007; WTO, 2018).

However, despite the important objectives of the Doha Round outlined above, Doha Round has not been finalised over 20 years and even without a prospect for conclusion this round in the foreseeable future. Many arguments were suggested in the literature to explain the failure of the Doha Round (Evenett, 2014; Gallagher, 2007; Wolfe, 2015). However, many scholars argued that one of the main reasons for the failure of the Doha Round is the large number of member countries of WTO that are participated in this round compared to the previous rounds of GATT (Bergsten, 2005; Jones, 2012; Wolfe, 2015), as illustrated in Figure 2 that presents the rounds of GATT/WTO by the number of member countries that were participated in the rounds alongside the time for completing the rounds.

In the spite of the above, the study analysis that is based on the conceptual model of this study suggests that the increase in the number of member countries in the Doha round may explain only part of the failure, while the main reason for the failure is the principle of consensus in the decision-making of GATT/WTO. According to consensus in the decision-making of GATT/WTO, all decisions in a round MUST be accepted by ALL member countries, and even a single member country, whatever the country is, has the right de-facto to veto any decision in the round (Bergsten, 2005; Steinberg, 2002). Given that, the increase in the number of members of WTO raises the question if it is possible to reach a consensus in decision-making with more than 140 member countries that have participated in Doha round. Analysing Figure 2 regarding the association between the number of member countries that participated in the rounds and the time of completing the rounds may suggest that when the numbers of countries are above 130

countries, then it is not possible to complete a round under consensus in decision-making.  In other words, the failure of the Doha round over 20 years has raised the doubt about the likelihood that 130 member countries and more, could agree on decisions related to international trade and FDI without that a single country may oppose some of the decisions. Nonetheless, this study argues that the main problem of the Doha round is not the large number of member countries that have participated in the round but the mechanism of consensus in decision-making. To illustrate it, let’s assume that the United Nations (UN) will try to pass a decision under consensus in decision-making. Highly likely that even a single decision won’t pass in the UN under the mechanism of consensus in decision-making. Importantly, WTO and UN have a similar objective in trying to maximise the number of their members to create global order. UN executes it regarding international security and various issues to prevent wars and chaos, while WTO executes it regarding international trade and FDI to prevent trade wars (Hoekman, 2019) and economic instability, such as the trade wars that happened following the Trump policy of ‘America First’ (Bouët & Laborde, 2018; Larres, 2020). However, despite the similarity between UN and WTO in relation to maximising their member countries to achieve global order, then the general assembly of the UN is not getting decisions under consensus but under majority in decision-making yet with a veto right to superpowers (Smith, 2006), while WTO getting decisions under consensus in decision-making and without a veto right to superpowers (Hamblet, 2011; Steinberg, 2002).

New Framework for Achieving Successful Rounds: Majority in Decision-making and Yearly Round instead of Consensus in Decision-making and Continuous Round

Analysis of the current framework of WTO based on the conceptual research model of this study indicates that WTO must shape a new framework for creating successful rounds, as shown in Figure 3 which presents the proposed new framework for WTO. According to the new framework, WTO should change the principle of consensus in decision-making to a majority in decision-making to allow approval of its rounds. Yet, without giving a veto right to superpowers with the aim of preserving in some way the principle of GATT that any member country has the same power in decision-making, still, under a democratic mechanism of getting decisions by the majority. In other words, under the majority in decision-making without giving a veto right to superpowers, WTO will keep its principle that any member country has the same power in decision-making, still, based on the democratic principle that the majority has the legitimate right to pass decisions. Moreover, this study also suggests that WTO should change not only the mechanism of decision-making but also the concept of the round. Thus, WTO should adopt a concept of 'yearly round' instead of the current concept of 'continuous round'. Given that, WTO should hold a yearly round instead of a continuous round. Importantly, at a yearly round, WTO should present to its member countries various decisions for approval under a majority in decision-making.

Therefore, at the end of the meeting of each 'yearly round', some decisions may be approved by the majority of the member countries of WTO, while other decisions may be rejected by the majority. Nevertheless, those decisions that were rejected by the majority, can be presented again for approval at the next 'yearly round' after making some changes in the suggested decisions or after convincing the majority to pass the original decision that was rejected in the previous yearly round.

In light of the above, only successful rounds will be conducted under the new framework of WTO. However, at some yearly rounds, more decisions may be approved by the majority, while at some yearly rounds fewer decisions may be approved by the majority. Still, under this new framework of WTO, always progress is supposed to occur in relation to the agenda of WTO. More importantly, this new framework will give a future for WTO as a global body that aims at preserving the global order in relation to international trade and FDI to avoid trade wars. This is a very important role because trade wars can even escalate to real conflicts between countries or between coalitions of allies or worse between superpowers, such as the deteriorating relations between USA and China following the trade wars between these two superpowers (Noland, 2017), especially amid the policy of ‘America First’ (Janusch & Mucha, 2017; Larres, 2020). Although, we should assume that each country has national interests regarding international trade and FDI, still, WTO has an important role to reduce conflicts between countries due to national conflicts of interest related to international trade and FDI with the aim of achieving global prosperity based on collaborative for the benefits of all members of WTO.

Notwithstanding the above, moving from a consensus in decision-making to a majority in decision-making may lead to a risk that certain member countries may leave WTO if the majority may pass decisions that significantly contradict the national interests of their countries. However, if we look at the UN regarding this risk, then usually member countries of the UN do not leave the organization following controversial decisions that contradict their national interests. Thereby, we can assume that exists a very minor risk that members of WTO may leave the organization following controversial decisions that were approved by the majority. Nonetheless, from the standpoint of the future of WTO, even if certain member countries may leave the organization following controversial decisions, then this risk is minor compared to the risk that WTO may become irrelevant in the international trade arena or even eventually may be dissolved if successful rounds won’t be approved in the coming future.

To summarise, on the one hand, the establishment of WTO is based on the principle of consensus in decision-making that gives similar power to any member country in decision-making. That was done to avoid situations in which certain trade rules are forced on certain member countries, despite that these rules significantly contradicts their national interests, which may result that these member countries may leave WTO. On the other hand, the failure to approve Doha Round over 20 years raises the doubt if it is possible to make any decision related to international trade and FDI under consensus in decision-making with more than 140 member countries of WTO. Hence, this study suggests that only a new framework that includes a dramatic change in the way that decision-making is carried out under WTO alongside moving to a 'yearly round' instead of a 'continuous round' may allow concluding new rounds. Importantly, this new framework may allow WTO to regain its role as the leading global player that responsible for maintaining the global order in relation to international trade and FDI to prevent trade wars among its members.

Conclusions and Policy Implications

The failure of the Doha Round over 20 years (Bergsten, 2005; Wolfe, 2015; WTO, 2019) is raised a doubt if WTO could remain a prominent global player in the trade global arena. It even has led to uncertainty regarding the future of WTO, especially due to the lack of prospects for conclusion Doha round in the foreseeable future. Hence, this study explores the current framework of WTO to reveal its weak factors that may explain the continuous failure of the Doha round with the aim of shaping a new framework for WTO to allow completing successful rounds. To address it, a conceptual research model was developed to reveal the failure of the current framework of WTO that led to the continuous failure of the Doha round over 20 years. The conceptual model of the study also aims at disclosing which new framework may fit WTO with multiplicity member countries under circumstances of trade wars in the 21 century.

The analysis of study indicates that the main reason for the failure of the current framework of WTO is the mechanism of consensus in the decision-making of GATT/WTO, rather than the increase in the number of member countries that have participated in the Doha round as argued by many researchers (Bergsten, 2005; Jones, 2012; Wolfe, 2015). More specifically, under consensus in the decision-making of GATT/WTO, all decisions in a round MUST be accepted by ALL member countries, and even a single member country, whatever the country is, has the right to veto any decision in the round (Bergsten, 2005; Steinberg, 2002). Given that, the increase in the number of members of WTO indeed impact negatively the ability to get consensus in decision-making, still, the main problem is not a large number of member countries but the need to get consensus decisions. This study illustrates it by comparing WTO and UN that have similar characteristics, especially regarding their objective to maximize their member countries to achieve global order. UN in relation to international security and various topics, while WTO in relation to international trade and FDI. According to this comparison, if the UN will try to pass consensus decisions, then highly likely that even a single decision won’t pass in the UN under the mechanism of consensus in decision-making. Hence, despite the similarity between UN and WTO in relation to maximising their member countries to achieve prosperity and global stability, then the general assembly of UN is not getting decisions under consensus but under majority in decision-making yet with giving a veto right to superpowers, while WTO getting decisions under consensus in decision-making without giving a veto right to superpowers.

Following the analysis of the current ineffective framework of WTO, this study suggests a new framework for WTO to achieve successful rounds, as follow. First, WTO should change the principle of consensus in decision-making to a majority in decision-making to allow approving rounds, still, without giving a veto right to superpowers. Hence, under this mechanism, WTO will keep its principle that any member country has the same power in decision-making, still, under the democracy value that the majority has the legitimate right to pass decisions. Second, WTO should hold a ‘yearly round’ instead of a ‘continuous round’ to allow yearly progress in the agenda of WTO. Third, at the yearly round, WTO should present to its member countries various decisions for approval, so at the end of each ‘yearly round’, some decisions may be approved by the majority, while other decisions may be rejected. Forth, the rejected decisions can be presented again for approval at the next 'yearly round' after making changes in the suggested original decisions or after convincing the majority to pass the original decisions. Fifth, WTO should avoid putting too much ‘on the plate’ at each yearly round to allow adequate discussion about each suggested decision before conducting voting. Sixth, under the new framework, there is a minor risk that certain member countries may leave WTO following controversial decisions that contradict their national interests. However, the risk of ‘no future’ for WTO is bigger if the organization will keep the mechanism of consensus in decision-making compared to the risk if the organization will have fewer member countries following controversial decisions. Nevertheless, to defuse this minor risk, namely to prevent that certain member countries may leave the organization amid controversial decisions, then WTO should adopt a mechanism of ‘significant majority’ (e.g. 70-80% majority) for important decisions or controversial decisions, while a 'normal majority' for regular decisions.

The study concludes that under the new framework of WTO, only successful rounds will be conducted in the future. Importantly, under the new framework, WTO will regain its important role as a leading player that responsible for preserving the global order in relation to international trade and FDI to avoid trade wars. That is a critical role because many governments have the temptation to adopt kind of ‘Mercantilism policy’ (Conti, 2018; LaHaye, 2017; Mun, 1895) amid the challenges of the 21 century, especially in relation to the shrinking of jobs at the national level due to relocation of jobs to host countries (Rozen-Bakher, 2020), such as the policy of ‘America First’ (Economist, 2016; Janusch & Mucha, 2017; Larres, 2020) or the policy of ‘Brexit’ (Dunlop et al., 2020) that aimed at keeping the local jobs for their citizens (Akhtar, 2020), despite that the ‘Mercantilism policy’ backfires the national economy in terms of ‘Capital flight’ (Bruce, 2019) and closing factories (Wearden, 2019) as what already happened in the UK due to the uncertain future of Brexit, resulting in eliminating local jobs instead of creating new ones. Given that, WTO has a crucial role not only to prevent trade wars at the global level but also to serve as a ‘gatekeeper’ for preventing an escalation of trade wars to real conflicts between countries.  Hence, the new framework is supposed to allow WTO to maintain the global order in relation to international trade and FDI to avoid the risks of trade wars and even real conflicts if trade wars may get out of control, especially during crises.

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