ACITI Op-Ed: The importance of the WTO in Polycentric Trade Governance

By Professor Felicity Deane, Director of Research Training | Faculty of Business and Law | Queensland University of Technology | www.law.qut.edu.au

I began drafting this post before the recent escalation involving Iran, which is an episode that appears to have unfolded with alarming speed, and to many observers, little deliberation. For context, the conflict commenced when the compound of Ali Khamenei, Iran’s supreme leader, was obliterated by Israeli missiles at roughly 9:40am on February 28th.  It also appeared to disregard international law. Rather alarmingly, this apparent disregard for the law was overlooked by many,[1] an outcome that is both unacceptable and indicative of a troubling double standard within the global order. Such inconsistency should give rise to serious concern.

This form of international anarchy stands in stark contrast to a world committed to the rule of law and to accountability, irrespective of allegiance.

The creation of the United Nations in the aftermath of the World War II represented an extraordinary achievement in the pursuit of peaceful dispute resolution. For a time, the system worked as intended, embedding a shared expectation that conflicts between states would be addressed through institutional processes rather than force. Today, however, the invocation of self-defence as a justification for military action is beginning to stretch the credibility of the concept itself. [2] The pattern has an oddly familiar parallel in international trade law, where some governments instinctively invoke the national security exception contained in the rules of the World Trade Organization.

A critical difference between these claims is that within the trading system claims of national security do not simply pass unexamined. They are scrutinised, debated, and, where appropriate, tested through the dispute settlement system. That may not always produce perfect outcomes, but it does produce something important, a system in which claims of necessity are not accepted at face value. In a fragmented and often chaotic global order, a commitment to procedural fairness remains one of the features that makes the multilateral trading system worth defending.

Despite its virtues, it is not controversial to say that the global trade order underpinned by the WTO is facing a crisis.[3] The consensus-based structure that was once a strength of the WTO’s legitimacy has also constrained its capacity to evolve. While a shift to voting might appear logical in the face of persistent deadlock, such a reform would itself require consensus, making institutional change extraordinarily difficult.

Since the Doha Round stalled in the mid-2000s,[4] this consensus decision-making structure has increasingly hampered progress. In response, states have turned toward bilateral and plurilateral agreements, which have proliferated steadily over the past decade. These arrangements have offered flexibility and speed, but at the cost of fragmenting the multilateral landscape.

All of this predates the more recent disruption to the rules-based trading order. What has changed is not simply disagreement over policy, but the open treatment of trade rules as discretionary rather than binding. The governance of international trade has not collapsed, but it has been twisted.[5] Under executive direction, the United States has increasingly approached trade obligations as troublesome (and optional) guidelines rather than enforceable legal commitments, signalling a shift from rule-governed cooperation toward power-based exception-making.

Against this backdrop, one could argue that the rest of the world has kept calm and carried on. Rather than escalate, many states have quietly diversified their trade relationships, reducing reliance on the United States and treating its trade policy as volatile, unpredictable, and detached from institutional constraint. The random nature of the US trade policy has also encouraged other nations to reignite some of their trade agreements, which could be evidence of increased fragmentation in the international trading regime. [6]

Or is it?

This pattern of trade agreement and diversification can also be understood through the lens of polycentric governance. Polycentric simply means “many-centred”, while in contrast multilateral refers to arrangements involving many sides. In international trade, however, multilateralism has a more specific meaning, it denotes a system that is open to all participants and governed by common rules. In multilateral systems, legitimacy does not derive from power or personality, but from rules, processes, and jurisprudence. These two systems can coexist and potentially work well together if there is a system for doing so.

In the trading system, the polycentric structure has become increasingly more visible. Regional agreements, domestic industrial policy, security alliances, and private supply-chain governance all shape the movement of goods and capital. Yet these decentralised arrangements still operate within the broader legal framework anchored by the World Trade Organization.

The World Trade Organization is the central feature of the multilateral system. Although only established in 1995, its foundations were laid through the General Agreement on Tariffs and Trade, negotiated in the aftermath of World War II and provisionally applied from 1947. The WTO itself emerged decades later, following the eight-year Uruguay Round of negotiations (1986–1994). That relatively long gestation speaks both to the ambition and the difficulty of securing agreement among diverse economies. Although the agreement now looks like a triumph in international diplomacy and it would be almost impossible to achieve today.

Since the signing of the GATT, a body of jurisprudence has developed that is unparalleled at the international level. Over nearly eighty years, this jurisprudence has deepened understanding of trade rules and provided a degree of certainty and stability that few other areas of international law can match.[7] WTO dispute settlement rules set clear boundaries around permissible conduct and, critically, provide structured procedures for resolving disputes, beginning, always, with consultations.

There is much to celebrate and to protect in this system. Indeed, I would argue that claims that the WTO has outlived its usefulness are premature and overlook an important reality, that is in periods of disruption and uncertainty, states tend to crave consistency.

In an increasingly polycentric world, where self-interest often prevails, shared parameters of right and wrong remain essential. The WTO’s rules were once agreed by consensus, and although that mechanism has since become a barrier to reform, the fact that such agreement was achieved at all is extraordinary. While more recent consensus among WTO Members may be elusive, the value of consistent rules and processes remains central to the legitimacy, and resilience, of the multilateral trading system.

It is against this backdrop that I argue the multilateral trading system remains an institution worthy of protection. An institutional framework equipped with dispute resolution mechanisms, and capable of sustaining what remains of the global order, is of enduring value and not easily replaced. The rules and processes that emerged from the GATT negotiations in 1944 have, for nearly eight decades, underpinned a system of trade that is comparatively fair and ordered. It is these rules that allow us to recognise that current developments fall short of acceptable standards, and these norms that continue to delineate the boundary between right and wrong in international economic conduct. This moment therefore demands more than critique; it requires a renewed commitment to the institutional frameworks that have, however imperfectly, sustained cooperation and constrained unilateralism. The multilateral trading system endures not because it is flawless, but because it provides a shared reference point against which conduct can be assessed and contested. Without it, the distinction between lawful and unlawful behaviour risks becoming increasingly indeterminate.

Therefore, when asking about the continued utility of the WTO we should not necessarily question whether the trading system is flawed. Rather, it is whether we are prepared to accept a world in which power, rather than principle, determines (sometimes highly undesirable) outcomes.

Capling, Ann. “‘The Multilateral Trading System at Risk? The Challenges to the World Trade Organization.’” In The WTO and the Doha Round: The Changing Face of World Trade, edited by Ross P. Buckley. Kluwer Law International, 2003.

Deane, Felicity. “US Tariffs Will Upend Global Trade. This Is How Australia Can Respond.” The Conversation, April 3, 2025. https://doi.org/10.64628/AA.e7xjck55h.

Fernández-Villaverde, Jesús, Tomohide Mineyama, and Dongho Song. “Are We Fragmented Yet? Measuring Geopolitical Fragmentation and Its Causal Effect.” NBER Working Paper Series (Cambridge), ahead of print, 2024. https://doi.org/10.3386/w32638.

Jackson, John H. The Jurisprudence of GATT and the WTO. Cambridge University Press, 2000.

“Lessons from Trump’s Assault on the World Trade Organization | Chatham House – International Affairs Think Tank.” May 18, 2023. https://www.chathamhouse.org/2021/08/lessons-trumps-assault-world-trade-organization.

Taucher, Paul. “Geoffrey Robertson Believes International Law Is Failing Us – but the Solutions Are Unclear.” The Conversation, ahead of print, January 9, 2026. https://doi.org/10.3316/informit.T2026010900000900369423879.

Vidigal, Geraldo. “Living Without the Appellate Body: Multilateral, Bilateral and Plurilateral Solutions to the WTO Dispute Settlement Crisis.” The Journal of World Investment & Trade (Leiden, The Netherlands) 20, no. 6 (2019): 862–90. https://doi.org/10.1163/22119000-12340160.

Wildeman, Jeremy. “Respecting International Law Depends on Who Breaks It: Why Canada Backed the War against Iran.” The Conversation, March 5, 2026. https://doi.org/10.64628/AAM.s94feys7p.

[1] Wildeman, “Respecting International Law Depends on Who Breaks It.”

[2] Taucher, “Geoffrey Robertson Believes International Law Is Failing Us – but the Solutions Are Unclear.”

[3] Vidigal, “Living Without the Appellate Body: Multilateral, Bilateral and Plurilateral Solutions to the WTO Dispute Settlement Crisis.”

[4] Capling, “‘The Multilateral Trading System at Risk? The Challenges to the World Trade Organization.’”

[5] “Lessons from Trump’s Assault on the World Trade Organization | Chatham House – International Affairs Think Tank”; Deane, “US Tariffs Will Upend Global Trade. This Is How Australia Can Respond.”

[6] Fernández-Villaverde et al., “Are We Fragmented Yet? Measuring Geopolitical Fragmentation and Its Causal Effect.”

[7] Jackson, The Jurisprudence of GATT and the WTO.