On 26 July, 2012, in the throes of a European financial crisis, then-President of the European Central Bank Mario Draghi declared in a stirring speech that the ECB would do “whatever it takes” to quell the rout. Markets calmed after he spoke; the words themselves didn’t matter as much as the trust in the person who spoke them. Hector Torres writes about this moment in an essay today for the Hinrich Foundation about the paralysis at the WTO and the reckoning over the long-drawn crisis that the multilateral trading system now faces because it does not have a leader like Draghi. Trump’s “reciprocal” tariffs are a wake-up call for the WTO, Torres says. Globalization isn’t over in services. It’s in fact an US$8 trillion sector growing three times faster than goods, and the world’s biggest exporter is the United States. Visual Capitalist takes a look at how much services the US exports to the world versus the other way round. Henry Gao argues that Trump reset the global trade agenda and initiated the largest round of trade negotiations since the WTO’s (failed) Doha Round, and what Trump wants is leverage to compel new trade deals with every country to tackle tariffs, non-tariff barriers, and China. The CPTPP and RCEP have become anchor plurilateral trade orders in Asia and now look increasingly attractive as a means to influence the US and China, Saori Katada writes. By now, net zero seems a distant goal made more distant by trade fragmentation and policy failure. Global carbon price benchmarks and regional markets are the answer, Oxford Economics writes in a deep dive for the Hinrich-IMD Sustainable Trade Index. Plus, our guide on how to use the WTO’s latest Global Trade Outlook.
TRADE POLICY
The WTO must face its “whatever it takes” moment
Hector Torres 29 April 2025
Donald Trump’s announcement of “reciprocal” tariffs was – or should be – a wake-up call for the WTO to confront its “reform or perish” conundrum. The 30-year-old institution’s failure to reform its outmoded decision-making process cannot be postponed anymore, former IMF executive director and WTO Appellate Body counselor Hector Torres writes in a special essay for the Hinrich Foundation. Instead of an equivalent to Mario Draghi’s “whatever it takes” declaration, the response from the WTO’s management so far still lacks an understanding of the urgency to defend the survival of the global multilateral trading system.
One of the biggest missing pieces in the debate over the US goods trade deficit is the US trade surplus in services. Globalization is alive and well in services. It’s in fact an US$8 trillion a year sector, growing three times faster than goods. Services remains a complex sector to value or tariff, but official US data shows that the US exports far more services to the world than the other way round. Visual Capitalist takes a look at the troubling niggle in the sketchy outline of a new Washington consensus.
By announcing, and then temporarily pausing, “reciprocal” tariffs on all countries on Liberation Day, Trump reset the global trade agenda and initiated the largest round of trade negotiations since the launch of the WTO’s failed Doha Round in 2001, Singapore Management University law professor Henry Gao writes. Gao argues that Trump’s objective was not tariffs in themselves but the leverage to compel every country to negotiate new bilateral trade deals with the US to tackle tariff-related issues, non-tariff barriers, and China.
The rise and rise of Asia’s giant trade plurilaterals
Saori Katada 29 April 2025
Since their establishment in 2018, the CPTPP and RCEP have been anchors of trade order in the Indo-Pacific. These giant plurilaterals now look increasingly attractive for new members, and offer smaller states a means to influence the US and China, the University of Southern California’s Center for International Studies director Saori Katada writes.
The outlook for global trade has deteriorated sharply due to a surge in tariffs and trade policy uncertainty. As of 14 April, the WTO’s new estimate for 2025 is nearly three percentage points lower than it would have been without recent policy shifts. Explore our analysis of the WTO’s April edition of its Global Trade Outlook.
Fragmented carbon markets and carbon leakage are undermining the chances of meeting global goals of net zero carbon emissions by 2050. Key among the failures is the inability to coordinate policy that develops markets to coalesce around global carbon price benchmarks. Oxford Economics’ Thang Nguyen-Quoc and Theng Theng Tan explore in a deep dive for the Hinrich-IMD Sustainable Trade Index how regional carbon markets are an answer to global carbon pricing.
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