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Digital Subscriptions > Prospect Magazine > April 2019 > Worryingly Troubled Organisation

Worryingly Troubled Organisation

Hard Brexit enthusiasts hold up the WTO as the ultimate insurance policy for Britain. But the body itself is in serious trouble which could jeopardise its very survival

The World Trade Organisation is in the spotlight as hard Brexiteers advocate leaving the European Union without a deal on “WTO terms”—a phrase that is supposed to sound reassuring. But regardless of what sort of trade relationship with Europe we eventually settle into, we should all take a keen interest in how much protection this institution really provides.

If our departure from the EU is as hard as some hope, we will know soon enough; if it is softer, then the Brexiteers will grumble about “vassalage”—submitting to European rules we no longer help to write—and continue to agitate for dealing with the continent on WTO terms. And the way politics is drifting they could very well, sooner or later, succeed.

But what exactly is the World Trade Organisation? It is based in Geneva, but where did it come from? What security can it really give? And what lies ahead for an institution that an avowedly “America First” US president is, through a mix of his public diatribes and stealthy black ops, working to undermine? And how worried should we be?

The Road to Geneva

With or without Brexit, the WTO matters because of its role in regulating international trade. For two centuries, since David Ricardo spelt out the underlying rationale, the case for countries to trade with one another has been crystal clear: it works to their mutual advantage, leaving both sides better off overall. Just as fundamentally, international competition drives industries to become more productive. Despite the overall gains, though, trade can create losers—such as lower-skilled workers in more advanced economies—as well as winners, which is why it so often runs up against protectionist pressures. And although history testifies to the benefits of free trade, it also records the frequent misuse of trade policy by governments pursuing their strategic national interests, or offering a sop to domestic producer lobbies.

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About Prospect Magazine

In Prospect’s April issue: Mark Damazer, the former controller of BBC Radio 4, tells the inside story of how the BBC has tried—and sometimes failed—to cover the political crisis that overshadows everything else. Elsewhere in the issue: Playwright and screenwriter James Graham profiles John Bercow, the Speaker of the House of Commons, as he takes centre-stage in the unfolding Brexit drama and Tom Clark examines the Independent Group and argues that they could well shake up the established political tribes. Also, Jennifer Williams highlights the growing gap between the haves and have-nots in Manchester—a city that is simultaneously experiencing a housing boom and a homelessness crisis.