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THE WTO AND THE FUTURE OF INTERNATIONAL TRADE: BEYOND THE LIBERAL
PARADIGM  
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Luciana Ghiotto
September 25, 2025
Amandla!
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_ The future of international trade will be shaped not by the
resurrection of liberal multilateralism but by struggles over what
forms of economic cooperation can emerge from its ruins. _

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The current upheaval in international trade governance, with Trump’s
return to the presidency, does not represent the death of global trade
itself. But it does represent the final unraveling of the liberal
institutional framework that emerged triumphant in the 1990s. The
World Trade Organisation (WTO), as the institutional embodiment of
this liberal paradigm, finds itself in a systemic crisis. Although the
WTO crisis started before Trump’s two terms of office, what we see
now is a critical moment which requires a fundamental
reconceptualisation of international economic governance.

THE TWILIGHT OF THE LIBERAL TRADE ORDER

The 1990s marked the zenith of liberal multilateralism in trade
governance. It was characterised by unprecedented coordination among
major powers pursuing market liberalisation. The United States, backed
by its transnational corporations, stood as the principal architect.
It drove the creation of the North American Free Trade Agreement
(NAFTA) in 1994, and the establishment of the WTO in 1995, and
spearheaded the ambitious Free Trade Area of the Americas (FTAA)
project. This period witnessed remarkable convergence: Japan
aggressively pursued regional agreements, South Korea embraced
export-led liberalisation, and the European Union emerged as a
forceful advocate for global trade rules. 

_PRESIDENT BILL CLINTON SIGNS THE NORTH AMERICAN FREE TRADE AGREEMENT
IN DECEMBER 1993. THE 1990S MARKED THE ZENITH OF LIBERAL
MULTILATERALISM IN TRADE GOVERNANCE._

However, this liberal consensus began fragmenting by the early 2000s.
The United States, constructed the institutional architecture of
global trade. But paradoxically it began retreating from ambitious
multilateral initiatives. From Bush through Obama’s presidency,
American trade policy became increasingly defensive and selective,
focusing on bilateral arrangements rather than system-building
exercises. This withdrawal created a leadership vacuum that the
European Union (EU) gradually filled, becoming the most active
proponent of comprehensive trade agreements over the past decade.

The EU’s assumption of leadership manifested in an unprecedented
wave of negotiations, including comprehensive partnerships with
Canada, Japan, and Vietnam, while modernising existing agreements with
Mexico and Chile. Again paradoxically, as the US retreated from
multilateral commitments, China emerged as an unexpected defender of
the WTO system. It advocated for multilateral trade rules and dispute
settlement mechanisms, even while facing increasing American
hostility. This shift revealed a fundamental transformation: the
original architects of the liberal order were no longer its primary
guardians. This suggested deeper structural problems beyond political
preferences.

THE WTO’S CRISIS: FROM CANCUN TO PARALYSIS

The WTO’s crisis is longstanding, with no consensus on its starting
point. Many trace it to the 2003 Cancun Ministerial Conference, where
talks broke down due to conflicts between developed and developing
nations. This was more than a failed negotiation; it exposed
structural issues in promoting ‘free trade’ that often benefited
powerful countries. The dominance of the liberal order, therefore,
lasted less than a decade.

Cancun marked the effective end of the Doha Development Round,
ostensibly designed to address developing countries’ concerns, but
paralysed by fundamental disagreements over agricultural subsidies,
industrial tariffs, and services liberalisation. Over two decades, the
WTO achieved only marginal victories, notably the Trade Facilitation
Agreement
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bilateral and regional arrangements proliferated outside its
framework.

This multilateral paralysis occurred precisely as bilateral agreements
accelerated. The EU has negotiated several comprehensive deals since
2000, while Asia witnessed mega-regionals like the Trans-Pacific
Partnership
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(TPP-11) and the Regional Comprehensive Economic Partnership
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WTO’s inability to adapt culminated in the Appellate Body crisis
that effectively paralysed dispute settlement from 2019 onwards,
formalising institutional decay evident for nearly two decades.

TRUMP’S POLITICAL ECONOMY: CONTINUITY AND TRANSFORMATION

Trump’s embrace of tariffs represents not an aberrant departure from
American trade policy but a return to foundational strategies that
built US industrial supremacy. Protectionist policies are deeply
embedded in American economic history, with tariffs exceeding 40%
until World War II. What appears as a radical departure is actually
historical continuity, revealing the contingent nature of the “free
trade” moment
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However, while Trump’s methods echo historical precedent, his
political coalition represents significant transformation. During his
first presidency (2017-2021), Trump’s trade nationalism attracted
support primarily from declining industrial regions and traditional
manufacturing workers. His second term reveals a markedly different
class configuration, with crucial backing from emerging technology
sectors focused on artificial intelligence, semiconductors, and
renewable energy infrastructure. 

This shift reflects the recognition by strategic sectors that
technological competition with China requires state intervention to
guarantee domestic production capabilities. Major technology
companies, previously champions of globalisation, now support
industrial policies ensuring supply chain resilience and technological
sovereignty. The Biden administration’s Inflation Reduction Act and
CHIPS and Science Act created bipartisan consensus around strategic
protectionism. This provided Trump with a broader coalition, from
traditional manufacturing to cutting-edge technology sectors.

This expanded class backing enables more sophisticated trade
strategies transcending simple tariff walls. These include investment
screening mechanisms, technology transfer restrictions, and
coordinated approaches to critical infrastructure development.

THE NEW BILATERAL STRATEGIES IN THE ERA OF GREAT POWER COMPETITION

The bilateral trade negotiations emerging in 2025 must be understood
in the context of intensifying competition with China, and fundamental
shifts in global energy and security priorities. Trump’s new
agreements with the EU, Japan, and South Korea represent strategic
partnerships designed to guarantee investment flows into the US, while
creating coordinated approaches to technological competition with
China.

_TRUMP’S EMBRACE OF TARIFFS REPRESENTS NOT AN ABERRANT DEPARTURE
FROM AMERICAN TRADE POLICY BUT A RETURN TO FOUNDATIONAL STRATEGIES
THAT BUILT US INDUSTRIAL SUPREMACY. PROTECTIONIST POLICIES ARE DEEPLY
EMBEDDED IN AMERICAN ECONOMIC HISTORY._

These arrangements prioritise “friend-shoring” over
efficiency-based globalisation. This means deliberately choosing
suppliers from politically aligned countries, even when they are more
expensive than potential rivals. 1990s trade policy sought the
lowest-cost producers globally (leading to heavy dependence on Chinese
manufacturing). The new approach emphasises supply chain security and
technological sovereignty over cost optimisation. Concrete examples
include:

coordinated efforts to build semiconductor manufacturing capacity in
allied territories (Taiwan Semiconductor Manufacturing Company
factories in Arizona
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and Japan, with government subsidies); diversifying critical mineral
supplies away from Chinese processing (US agreements with Pakistan for
lithium, Indonesia for nickel); and ensuring energy security through
alternative suppliers, following Europe’s painful experience with
Russian gas dependency.

The agreements feature unprecedented provisions for coordinated
investment screening, shared research and development initiatives, and
mutual defence against economic coercion. This manifests in joint
export controls
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preventing China from accessing advanced chip-making equipment
(US-Netherlands-Japan coordination on ASML machines
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policy investments (US CHIPS Act, EU Chips Act, and Japanese subsidies
working in tandem rather than competition), and collective responses
to economic pressure tactics. These are unlike the broad
liberalisation commitments of 1990s agreements that removed barriers
to let the most efficient producers win. These new arrangements
explicitly strengthen collective capabilities against strategic
competitors, while making it economically costly for rivals to
weaponise trade dependencies.

Simultaneously, the US pursues resource security agreements with
countries rich in critical materials essential for technological
competition. Negotiations with Pakistan focus on lithium extraction
for battery production, while agreements with Indonesia
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encompass nickel supplies crucial for electric vehicle manufacturing.
African partnerships centre on rare earth elements and copper mining,
creating strategic partnerships guaranteeing American access
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to materials essential for technological superiority.

Notably, these new agreements occur within what analysts observe as a
shift toward the search for “energy security” rather than
“energy transition”. This semantic shift reflects political
accommodation with fossil fuel interests, while acknowledging the
strategic necessity of securing supplies for renewable energy
infrastructure. The resulting agreements combine
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traditional energy partnerships—guaranteeing oil and gas
supplies—with new commitments for critical mineral extraction and
processing.

BEYOND LIBERAL MULTILATERALISM

The current transformation represents more than cyclical policy
shifts; it signals the emergence of a post-liberal trade regime
characterised by explicit acknowledgment of geopolitical competition
and state intervention. The WTO’s law-based approach to trade
disputes appears increasingly obsolete. It is replaced by power-based
negotiations between rival blocs seeking strategic advantage, rather
than mutual benefit through market access.

The evidence points toward an era of intensified bilateral trade
agreements, with a newly active US pursuing strategic partnerships
designed to maintain technological and economic supremacy. Unlike the
comprehensive liberalisation projects of the 1990s, these new
arrangements explicitly serve geopolitical objectives, while
accommodating domestic industrial and technological constituencies.

The WTO will likely persist as a bureaucratic shell while real trade
governance shifts to bilateral, plurilateral, and regional
arrangements more explicitly aligned with strategic competition. This
represents not the death of international economic cooperation, but
its reconstitution based on fundamentally different principles. They
emphasise security and technological sovereignty over efficiency and
market access.

The future of international trade will be shaped not by the
resurrection of liberal multilateralism but by struggles over what
forms of economic cooperation can emerge from its ruins. As
international economic relations shift from liberal multilateralism to
strategic bilateralism, social movements must offer new alternatives
that go beyond both free trade’s universalism and the exclusionary
nature of rising nationalism.

_LUCIANA GHIOTTO is an associate researcher with the Transnational
Institute (TNI), specialising in trade and investment._

_Amandla is a left wing media project built around a magazine that
publishes six editions per year. It was initiated in 2006/7 by
activists coming from different political traditions on the left._

* World Trade Organization
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* Globalization
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* neo-liberalism
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* Tariffs
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* NAFTA
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* Clinton Administration
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* Trump Administration
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