It's impossible to think of the WTO without China now

December 11, 2019 marks 18 years since China joined the World Trade Organization (WTO) and irreversibly changed the nature of this global body. It is nowadays impossible to think of the WTO without that country, but there was a time when China had yet to be fully integrated into the world's economy. The reforms undertaken by former Chinese leader Deng Xiaoping put China on the right path, and the end of the Cold War unleashed its economic potential by transforming the country into what has been described as the "world's factory."

The world was very different on the eve of China's admission to the WTO. The 9/11 terrorist attacks were fresh on everyone's mind, but there was still hope that the world could come together in the shared interest of fair trade to improve the masses' living standards. The US' approval of China's membership in this organization was historical in the sense that it showed the high level of trust between the two countries and their mutual vision of complementing one another's economic fundamentals to give globalization its next big push worldwide.

The WTO provides a platform for economic negotiations and settling trade disputes, and membership in this body implies both a country's support for globalization and its willingness to behave responsibly with others. The organization is not perfect by any measures, but it was and still is the best means by which to retain some order in a rapidly changing world.

But it seemed that the trade war initiated by US President Donald Trump has significantly changed the global trade landscape.

What the US President did was a demonstration of the limits of the WTO, as well as an attempt to weaponize the body against China under the pretext that the latter supposedly was not fulfilling all of its institutional commitments. This unprecedented hostility eroded trust in the spirit behind the organization's creation since the world's largest economy was now going against the same global body that it had at one time helped to create. The resultant confusion raised questions among some about whether the WTO was now obsolete.

Failing to stop the trend of trade wars, which risks spreading to India after its commerce and industry minister said in early November that his country would seek to renegotiate all of its current free trade agreements, is but the most well-known example illustrating one of the main weaknesses of the WTO. Another one is the trend toward regional trade pacts. They are not a threat to the global economy and might actually strengthen it, but they were not foreseen to their current extent around the time of the organization's formation.

Founded in 1995, the WTO had been under negotiation for nearly a decade prior, and regional trade blocs were beginning to emerge. Nowadays, there are quite a few of them, ranging from the United States–Mexico–Canada Agreement (USMCA) – the renegotiated form of the North American Free Trade Agreement (NAFTA) – to the E.U., the Russian-led Eurasian Economic Union, the Regional Comprehensive Economic Partnership (RCEP), Mercosur, and the recently created Africa Continental Free Trade Agreement (AfCFTA).

Now's the time to gradually reform the WTO to make it better suited for dealing with modern-day global economic reality. But this cannot happen without China's leading participation, both because it's the main trade partner of most countries on the planet and also because of how many of them are also participating in its Belt and Road Initiative (BRI). Unlike during the WTO's formation or Beijing's accession to the body, it is now impossible to talk about its future without China.

This observation proves just how far globalization has come in the past 18 years, especially considering just how much the world's economy has been turned on its head. The previously described challenges of trade wars and regionalization are expected to continue into the indefinite future in some shape or form. There's no better moment for China and the rest of the responsible members of the global economic community to come together to discuss the best ways for reforming the WTO to retain its relevance.