Reforming WTO processes: how cooperation can still happen
Oct 2026
Lesson 6
The WTO's problem is not a lack of shared interests but procedures that block action. Three fixes are needed: allowing willing countries to move forward without giving others a veto; upgrading WTO committees into genuine problem-solving forums; and returning dispute settlement to its role as a backstop for agreed rules, not a substitute for negotiation.
This is your guide to one of the most consequential forces shaping the global economy. In six lessons, UZH Professor of Economics and former WTO Chief Economist, Ralph Ossa takes you inside the multilateral trading system: how it was built, how it works, where it’s holding, and where it's beginning to crack. The series is based on UBS Center Public Paper #16 The Multilateral Trading System.
What now constrains cooperation at the WTO is not a lack of shared interests, but the difficulty of translating areas of partial convergence into collective outcomes. As the membership has expanded and the agenda has shifted toward issues that are more regulatory, distributional, and politically salient, negotiating procedures that once facilitated compromise have increasingly become points of blockage. In this setting, multilateralism has not lost its legitimacy or appeal. Rather, existing processes make it hard to move from agreement in principle to agreement in practice. Sustaining cooperation therefore requires adapting how it is organized, so that inclusiveness and legitimacy are preserved without rendering the system unable to act.
Variable geometry as necessity, not threat
A first implication of the process diagnosis is that the WTO can no longer rely on a single negotiating mode to deliver cooperation across all issues. As membership has expanded and the agenda has shifted toward regulatory and distributional questions, the gap between shared interests and unanimous agreement has widened. What once functioned as a workable decision rule has increasingly become a binding constraint. The problem is not disagreement over objectives, but the absence of procedures that allow areas of partial convergence to be translated into outcomes in a larger and more heterogeneous system.
Consensus-based decision-making remains central to the WTO’s legitimacy, particularly for smaller and less powerful members, and that role should be preserved. But legitimacy does not require that members who choose not to participate in a given initiative can prevent others from moving ahead. When consensus is interpreted as granting non-participants a veto over cooperation among willing members, it risks turning a safe-guard against exclusion into a mechanism of paralysis. Preserving the legitimacy of consensus therefore requires distinguishing clearly between the right not to participate and the ability to block participation by others.
Seen in this light, variable geometry is not a departure from multilateralism but a practical means of sustaining it. Plurilateral agreements, critical-mass arrangements, and open-accession frameworks allow cooperation to advance where interests align, while preserving transparency and keeping the door open to later participation. The experience of the Doha Round illustrates the limits of a single, comprehensive negotiating track in a large and heterogeneous system – not the limits of ambition itself, but of treating ambition and universality as inseparable.
Recent experience shows that such approaches can work within the WTO framework. The agreement on services domestic regulation demonstrates how plurilateral negotiations can be translated into multilateral commitments through existing scheduling procedures, improving transparency and predictability in the application of domestic regulatory requirements without imposing obligations on non-participants. It provides a concrete example of how cooperation among willing members can be anchored in WTO architecture rather than pursued outside it.
Negotiations on investment facilitation for development and on electronic commerce build directly on this logic. In both cases, participating members have agreed on substantive texts among large and diverse subsets of the membership, addressing policy areas where fragmentation imposes high economic costs. Precisely because these initiatives are open to accession, facilitative in nature, and grounded in core WTO principles, their incorporation into the WTO framework represents one of the most credible nearterm opportunities to restore momentum in multilateral cooperation. Whether and how these agreements are integrated will therefore be more than a procedural question: it will be a test of the system’s capacity to translate partial convergence into collective outcomes while preserving its multilateral character.
At the same time, these experiences expose a remaining institutional gap. Uncertainty about how plurilateral outcomes can be incorporated – on what terms, with what legal status, and with what accession conditions – has itself become a source of friction. The central procedural challenge is therefore not to resolve individual legal disputes, but to establish clear, predictable pathways for integrating plurilateral agreements that do not impose obligations on non-participants. Without such pathways, variable geometry will remain episodic, and the system will continue to struggle to convert convergence into durable collective results.
Strengthening implementation and deliberation
A second implication of the process diagnosis is that cooperation can no longer rely primarily on rule-making alone. As the agenda has shifted toward regulatory, distributive, and technically complex issues, the ability to implement, monitor, and discuss existing commitments has become as important as the negotiation of new ones. In this environment, the WTO’s comparative advantage increasingly lies in its capacity to generate information, compare policy approaches, and facilitate structured deliberation among members – even where binding rules are incomplete or contested.
This shifts the role of transparency and implementation from peripheral functions to core elements of cooperation. Improved notification practices, more systematic transparency, and stronger peer review reduce uncertainty about how policies are applied in practice and lower the risk that regulatory differences escalate into conflict. A more analytical and forward- looking use of Trade Policy Review reports can support this role by identifying emerging frictions and highlighting areas where policy divergence may warrant dialogue before disputes arise.
From this perspective, WTO committees should be understood less as technical sidelines and more as central governance forums. In areas such as technical barriers to trade, sanitary and phytosanitary measures, subsidies, and trade and environment, committees provide spaces for clarification, learning, and peer pressure. Yet in practice, transparency has often functioned primarily as a prelude to litigation rather than as a cooperative instrument. When notification increases legal exposure without offering avenues for problem-solving, under-notification becomes a rational response.
Rebalancing committee work toward deliberation and problem-solving – rather than enforcement alone – would not substitute for rule-making. But it would help manage regulatory divergence, contain disputes before they escalate, and create conditions under which future agreements become more feasible. In a system where cooperation increasingly proceeds through partial commitments and variable geometry, effective implementation and deliberation are not ancillary functions; they are essential to sustaining trust and keeping the multilateral framework operational.
Dispute settlement as backstop, not centerpiece
A third implication of the process diagnosis concerns the role of dispute settlement. A functioning dispute settlement system remains essential for the credibility of agreed rules. But experience has also shown the limits of treating adjudication as a substitute for negotiation. When negotiations stall and rule-making lags behind economic change, dispute settlement risks being asked to resolve disagreements that are fundamentally political or distributive in nature. In such circumstances, adjudication is pushed beyond its intended role, placing adjudicators under pressure to fill gaps that can only be addressed through agreement among members.
Sustaining cooperation therefore requires re-anchoring dispute settlement as a backstop rather than the centerpiece of the system. Its core functions are to enforce existing commitments, provide legal certainty, and contain conflict – not to drive integration in the absence of negotiated consensus. When dispute settlement is expected to perform roles beyond these limits, it risks undermining both its own legitimacy and the willingness of members to accept its outcomes.
From this perspective, the most immediate priority is not agreement on a comprehensive redesign of the dispute settlement system, but the restoration of basic legal certainty. In particular, the possibility that disputes can be appealed into the void creates uncertainty that weakens compliance incentives even where rules remain clear. A political commitment not to appeal into the void would therefore represent a pragmatic step toward restoring confidence, without prejudging the longer-term shape of appellate review. In parallel, the Multi-Party Interim Appeal Arbitration Arrangement demonstrates that, where members choose to do so, appellate review can be preserved through interim solutions under existing legal frameworks. Broader participation in such arrangements can help sustain confidence in rules-based dispute settlement while more fundamental reforms remain contested.
Taken together, these considerations reinforce a broader process logic. Variable geometry allows cooperation to proceed where interests align; stronger implementation and deliberation help manage regulatory divergence; and dispute settlement provides enforcement and containment when those mechanisms fall short. Properly calibrated, dispute settlement strengthens the multilateral trading system by supporting negotiated outcomes rather than substituting for them. In a more complex and politically constrained environment, restoring this balance is essential for translating partial convergence into durable collective results.
The role of middle powers
These process reforms raise a final and unavoidable question: who will drive them? For much of the post-war period, the multilateral trading system relied – explicitly or implicitly – on a small number of large economies to underwrite its core disciplines. That political economy no longer holds. Cooperation today is more selective, interests diverge more sharply, and no single actor can be expected to supply restraint as a global public good.
This shift does not imply disengagement from multilateralism. Rather, it points to a more fragmented and issue-specific pattern of participation, in which major economies cooperate where it aligns closely with their interests and act unilaterally elsewhere. In such an environment, the stability of the system cannot rest on any single power. It must instead depend on a broader set of economies with strong incentives to preserve predictable rules and to prevent escalation.
This places middle powers at the center of the system’s future. These economies are deeply integrated into global trade and therefore highly exposed to fragmentation. They lack the market size or coercive leverage to impose outcomes unilaterally, but they derive disproportionate benefits from rules that limit discrimination, reduce uncertainty, and stabilize expectations. For middle powers, a functioning multilateral trading system is not an abstract ideal, but a core component of economic security.
The collective-action problem they face is familiar. Acting alone, middle powers have limited influence and are often compelled to adapt to the choices of larger players. Acting together, they can shape the institutional environment in which those choices are made. The relevant question is therefore not whether middle powers can replace great powers as leaders of the system – they cannot – but whether they can exercise stewardship that preserves cooperation where it remains mutually beneficial.
In practice, this stewardship takes several forms. First, middle powers can anchor variable geometry within the multilateral framework. As unanimity among the full membership becomes harder to achieve, plurilateral and critical-mass initiatives offer a way to sustain rule-making without abandoning inclusiveness. When such initiatives are open to accession, transparent in design, and embedded in WTO processes, they strengthen rather than fragment the system. Normalizing this approach is essential to restoring bargaining space.
Second, middle powers can act as guardians of core principles. Most-favorednation treatment, reciprocity, and binding commitments remain the system’s primary tools for limiting escalation and preventing discriminatory spirals. Defending these principles does not require rigidity, but it does require resisting the temptation to treat exceptions as precedents and ensuring that flexibility remains anchored in multilateral disciplines rather than bilateral accommodation.
Third, middle powers can invest in the system’s deliberative and implementation functions. As cooperation increasingly turns on regulatory issues – such as subsidies, sustainability, and digital trade – the WTO’s committees, transparency mechanisms, and peer-review processes become more, not less, important. Strengthening these forums reduces uncertainty, facilitates problem-solving, and helps contain disputes before they escalate. This is a domain where collective action by middle powers can deliver tangible results even in the absence of new binding rules.
Finally, middle powers can promote restraint. In a more contested environment, the boundary between legitimate policy autonomy and destabilizing unilateralism has become harder to police. While no group of economies can eliminate power asymmetries, coordinated signals in favor of predictability, proportionality, and dialogue can raise the political cost of escalation and preserve space for cooperation.
Taken together, these roles point to a conception of leadership based less on dominance than on stewardship. For middle powers, the alternative is costly self-insurance: duplicating supply chains, fragmenting markets, and accepting higher levels of uncertainty as the price of autonomy. Collective stewardship offers a different path – one that preserves sovereignty through shared rules rather than through isolation.
Whether the multilateral trading system remains resilient rather than merely persistent will increasingly depend on whether middle powers choose to act on these incentives. Acting individually, their influence is limited. Acting together, they retain the capacity to stabilize a system that, while no longer anchored by a single underwriter, continues to deliver far more than the available alternatives.
In this series, Prof. Ralph Ossa distills his experience from academia and policy making into something rare: a clear, honest assessment of where the system actually stands today. Each lesson offers insights that stand on their own. Follow all six, and you'll come away with a complete picture – and a much sharper understanding of what holds the global economy together, and what happens when it starts to fray.
The WTO's problem is not a lack of shared interests but procedures that block action. Three fixes are needed: allowing willing countries to move forward without giving others a veto; upgrading WTO committees into genuine problem-solving forums; and returning dispute settlement to its role as a backstop for agreed rules, not a substitute for negotiation.
This is your guide to one of the most consequential forces shaping the global economy. In six lessons, UZH Professor of Economics and former WTO Chief Economist, Ralph Ossa takes you inside the multilateral trading system: how it was built, how it works, where it’s holding, and where it's beginning to crack. The series is based on UBS Center Public Paper #16 The Multilateral Trading System.
What now constrains cooperation at the WTO is not a lack of shared interests, but the difficulty of translating areas of partial convergence into collective outcomes. As the membership has expanded and the agenda has shifted toward issues that are more regulatory, distributional, and politically salient, negotiating procedures that once facilitated compromise have increasingly become points of blockage. In this setting, multilateralism has not lost its legitimacy or appeal. Rather, existing processes make it hard to move from agreement in principle to agreement in practice. Sustaining cooperation therefore requires adapting how it is organized, so that inclusiveness and legitimacy are preserved without rendering the system unable to act.
Image: David Bottenberg / Unsplash
Full series
Public Paper 16
The multilateral trading system is widely perceived to be in crisis, undermined by geopolitical tensions, unilateral trade policies, and growing skepticism toward global cooperation. UZH Professor of Economics Ralph Ossa, who served as Chief Economist of the World Trade Organization (WTO), argues in our latest UBS Center Public Paper, that such narratives are both overstated and insufficiently precise. While the system faces real and structural pressures, it continues to govern the majority of global trade and to deliver significant economic value.
The multilateral trading system is widely perceived to be in crisis, undermined by geopolitical tensions, unilateral trade policies, and growing skepticism toward global cooperation. UZH Professor of Economics Ralph Ossa, who served as Chief Economist of the World Trade Organization (WTO), argues in our latest UBS Center Public Paper, that such narratives are both overstated and insufficiently precise. While the system faces real and structural pressures, it continues to govern the majority of global trade and to deliver significant economic value.
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Author
Former WTO Chief Economist, Professor of Economics (UZH/CEPR)
Ralph Ossa, who served as Chief Economist of the World Trade Organization (WTO) from January 2023 to June 2025, took up the UBS Foundation Professorship of Economics at the Department of Economics of the University of Zurich (UZH) as of July 1, 2025. Before joining the WTO, Ralph Ossa was already teaching and conducting research at UZH in the field of international economics, with a particular focus on policy-relevant questions. He was chairman of the Department of Economics from 2019 to 2022 and coeditor of the Journal of International Economics from 2016 to 2022. Prior to Zurich, he was on the faculty at the University of Chicago Booth School of Business. He holds a PhD in Economics from the London School of Economics.
Former WTO Chief Economist, Professor of Economics (UZH/CEPR)
Ralph Ossa, who served as Chief Economist of the World Trade Organization (WTO) from January 2023 to June 2025, took up the UBS Foundation Professorship of Economics at the Department of Economics of the University of Zurich (UZH) as of July 1, 2025. Before joining the WTO, Ralph Ossa was already teaching and conducting research at UZH in the field of international economics, with a particular focus on policy-relevant questions. He was chairman of the Department of Economics from 2019 to 2022 and coeditor of the Journal of International Economics from 2016 to 2022. Prior to Zurich, he was on the faculty at the University of Chicago Booth School of Business. He holds a PhD in Economics from the London School of Economics.