After two years at the WTO, Ralph Ossa returns to research and teaching. In an interview with Swiss newspaper Le Temps he reflects on the consequences of rising protectionism and on how to better include citizens in the global economy.

This interview by Lassila Karua was originally published in Le Temps on 28.7.2025 in French. Translated and edited for layout purposes by the UBS Center.

He is one of the world’s leading experts in international trade. Ralph Ossa welcomed Le Temps into his new office at the University of Zurich, having just returned from serving as Chief Economist of the World Trade Organization (WTO) from January 2023 to June 2025 in Geneva. It was a privileged position from which to observe and shape the disruptions in global trade – at a time when protectionism has become the preferred policy response in many countries. He explains the dynamics at play in the ongoing negotiations between the United States and its trading partners, just days before Washington is set to announce new tariffs on August 1.

You had a front-row seat as globalization – and the role of the WTO – were increasingly questioned in recent years. The trade war Donald Trump initiated reinforced this trend. Are we witnessing the end of globalization as we know it?

Global trade is indeed facing enormous challenges due to the rise in protectionism. After the new U.S. administration took office, our focus at the WTO turned to studying the effects of the new tariffs on global trade. We were entering largely uncharted territory – there are few recent historical precedents for tariffs with such broad implications. What is clear is that these protectionist measures will weigh on trade this year. At the same time, it’s crucial to contextualize what’s happening with data, especially to counter the prevailing narrative that globalization is practically dead and that the WTO no longer serves a purpose.

What data are you referring to?

Given the current tensions between the world’s two largest economies, it’s worth pointing out that bilateral trade between the United States and China accounts for only 3% of global merchandise trade. That’s not to say it’s unimportant – but it’s only 3%. Another very relevant figure is that only 13% of global goods imports go to the United States. This means the remaining 87% are destined for other countries. So, global trade – outside the U.S. – remains essential.

The WTO certainly needs reform, but the rules developed by the organization still guide global trade. The share of global trade conducted under the WTO’s most favored nation (MFN) tariff regime – i.e., for countries with which the WTO negotiates tariff levels – as opposed to free trade agreements or unilateral tariffs like those currently imposed by the U.S., is a good indicator. In January, this share stood at 83%, but it has since fallen to 74% due to U.S. surcharges and retaliatory measures by other countries. This shows that international trade is still very much alive and still largely governed by WTO principles.

If trade outside the United States is so much more significant, why have so many governments been courting Donald Trump in recent months?

Trade with the United States is absolutely critical for some countries, such as Canada and Mexico. But I’m also thinking of low-income countries like Lesotho.

Why Lesotho?

I’m going by the numbers. The total value of goods this southern African country exports to the United States isn’t especially high, but about 30,000 jobs in the textile sector depend on denim products shipped to the U.S. Losing your job in Lesotho – or in Vietnam or Benin – is not the same as becoming unemployed in Switzerland. I don’t mean to downplay the problems facing Swiss or European societies, but the ability to absorb the shocks of U.S. tariffs is very different. And in the European Union, another aspect comes into play in tariff negotiations.

What is that?

On the European continent, trade negotiations are not just about economics; they also involve security concerns. The two are deeply intertwined. U.S. participation in NATO or its support for Ukraine are crucial. There are thus dependencies that go beyond trade. There’s also another factor explaining why many countries have failed to secure better agreements from the Trump administration.

What’s holding them back in the negotiation process?

It’s how countries approach these talks. The opportunities for a country exporting to the United States obviously depend on the tariffs it faces – but also on the tariffs its competitors face. This means that if, at the end of negotiations, my country is subject to a 10% surcharge and a rival country faces 30%, I might consider that a win – even though it’s actually a bad deal, especially considering that these tariffs were closer to 2% before April 2. In a sense, the U.S. follows the principle of divide and conquer.

Given today’s trade tensions – whether between the U.S. and China or more broadly – do you expect to see new cooperative blocs emerge that aim to stay independent from both powers?

At the WTO, many countries are unwilling to align themselves strictly with either the American or Chinese blocs. Of course, if you look at the data, there are signs of increasing fragmentation along geopolitical lines. Trade between China and U.S.-affiliated countries is growing more slowly than trade within blocs of countries more closely aligned with the United States. But take India, for example – the world’s most populous country. It does not want to be seen solely as an ally of either the U.S. or China, but as an independent power. At a recent conference, someone spoke about the concept of “dynamic multipolarity,” which I find very relevant. It means the world is becoming more disorderly. Different constellations of countries will emerge, depending on national interests. Your security partners might not be the same ones you work with on trade – or on climate change.

Globalization is often blamed for job losses in certain sectors, particularly due to offshoring to China. The WTO now speaks of the need for “re-globalization” that better takes vulnerable populations into account. How can this be achieved?

It’s true that import competition from China has reshaped labor markets, especially in the United States, and that thousands of people have lost their jobs because of it. But I also think it’s important to understand the political dynamics in the U.S. The impact of global trade on a country’s domestic well-being depends heavily on complementary domestic policies and social safety nets. Take Switzerland, for example – it’s an extremely open economy and subject to all kinds of trade shocks, and yet inequality there is much lower than in many other countries.

There’s another point I’d like to emphasize: China’s rise in recent decades. Even in academic circles, we often discuss the “China shock” as if it were entirely negative. Clearly, there are downsides. But there are also many positive effects for wealthy countries. Being able to buy cheap consumer goods is one of them. China’s growth – turning it into the “world’s factory” – has lifted millions of people out of poverty. Western companies have benefited as well, finding new markets for their products. China has also given hope to developing countries around the world. It shows that progress is possible, especially through rules-based trade. In fact, the poverty rate in low- and middle-income countries has fallen from 40% in 1995 to 11% today.

How can we address the inequalities we see today – those that are pushing some voters toward far-right political parties?

There are different ways to respond to the problems globalization causes. These include the social policies mentioned above, but also diversification of supply chains and trading partners. In recent years – during the pandemic and now amid the trade war – it has become painfully clear how dependent we are on China, Russia, and the United States. Diversification would allow us to include countries that have been largely excluded from global trade until now – and would reduce our overreliance on any one country. Switzerland, in my view, has a very smart trade policy: it negotiates with the U.S., cooperates with China, and at the same time signs free trade agreements with many other countries.