Multilateralism has long been considered the bedrock of international cooperation, a framework through which nations can come together to address global challenges ranging from trade imbalances to income inequalities. In the post World War II era, institutions like the World Trade Organization (WTO) emerged as pillars of this cooperative spirit, providing rules based systems intended to reduce friction in global trade. By setting regulatory standards and dispute resolution mechanisms, the WTO sought to create a level playing field for all, large and small. The transition from a bipolar world dominated by the ideological contest between the United States and the Soviet Union to an increasingly multipolar constellation of powers like China, India, Russia, the European Union, and others has introduced a new age of the global order.
Rather than giving rise to balanced cooperation, the emergence of multiple power centers has often exposed competing visions and interests. Multipolarity, in its essence, indicates the diffusion of power among various actors, but it does not guarantee collaborative action or a commitment to regulatory authorities. Indeed, many of these rising powers have pointed out that, for decades, multilateralism was shaped disproportionately by the values and priorities of the West, particularly those of the United States, thereby making them less inclined to abide by frameworks they perceive as historically biased. This sense of divergence has been palpable in several high profile withdrawals or threats of withdrawal by the United States from key international agreements and organizations, raising fears that multilateralism might be on the brink of collapse or at least suffering a debilitating crisis of legitimacy.
WTO’s Midlife Crisis: Lost in Translation in a Multipolar World
The WTO, often cited as the crown jewel of postwar multilateral institutions, exemplifies this tension most vividly. Created to foster predictability and stability in global trade, the organization was an outgrowth of the General Agreement on Tariffs and Trade (GATT) and hinged on principles of transparency, non-discrimination, and binding dispute settlement. For smaller economies, its utility was even more pronounced, membership in a rules based system offered a sense of security and a forum for voicing concerns that otherwise might be overshadowed by the influence of major trading blocs. Over the decades, the WTO facilitated trade liberalization on a scale previously unimaginable, offering developing nations opportunities to integrate into global value chains and attract foreign investment. Despite the inherent power imbalances where wealthier nations often set much of the agenda, smaller economies found some leverage through collective bargaining.
However, recent actions by the United States have called into question the future of multilaterism itself. Washington’s threats to retract from the WTO and its blocking of judicial appointments to the WTO’s Appellate Body, effectively paralyzing the dispute resolution mechanism, underscore a mounting frustration with rules that constrain unilateral policy choices. This reflects a broader turn to protectionism in U.S. policy outlook, driven partly by the sentiment that multilateral structures no longer serve American interests as they once did. Diplomatic relations have grown tense, with the U.S. administration accusing the WTO of failing to address trade imbalances, particularly those involving China, and insisting on reforms that other member states find too one sided. For instance, most recently, China condemned tariffs launched or threatened by U.S. President Donald Trump at a World Trade Organization meeting on Tuesday (February 18th 2025), warning that such "tariff shocks" could destabilise the global trading system and lead to a global recession.
The U.S. government’s decision to withdraw from the WHO was more than an administrative move. It signalled a broader critique of multilateral institutions perceived as acting counter to U.S. interests. The paradox is stark as historically, the United States leveraged these bodies to advance a form of “Western Universalism” setting agendas and norms that shaped international behavior. From the Bretton Woods system to the creation of multiple specialized UN agencies, the United States and its allies funded and guided these organizations in ways that often perpetuated Western influence. That influence extended to economic paradigms, educational frameworks, and even cultural mores around governance. Yet with the rise of other major players, some of whom do not share Washington’s worldview, multilateral organizations became arenas for broader geopolitical competition. In such an environment, the United States has begun to question the utility of providing substantial funding without guaranteeing outcomes favorable to its interests. This contradicts the very principle of a global public good. If an institution is meant to serve all member states, it should not become an exclusive instrument for any single nation’s agenda. Demanding that funding automatically translate into policy alignment is at odds with the ethos of impartial, rules based governance that multilateral bodies are supposed to embody.
How undermining the WTO creates a dilemma for other countries?
For nations witnessing the erratic U.S. stance, a dilemma emerges, should they follow suit by revising their commitments to broad multilateral frameworks, or should they double down by forging alliances bypassing the United States? On one side, there is an argument in favor of self-sufficiency and bilateral arrangements that can be more easily tailored to national interests. The European Union, for instance, has shown strong support for the WTO and the Paris Climate Agreement, aligning with other nations that see the unravelling of multilateral systems as a dangerous trend that may well accelerate global fragmentation.
On the other side, smaller economies stand to lose more than just a platform of fair representation. In addition to providing a dispute resolution platform, the WTO supports smaller and developing economies through several key initiatives such as, Aid for Trade which helps countries build trade capacity and infrastructure by providing targeted financing disbursements. Similarly, the Informal Working Group on Micro, Small, and Medium-Sized Enterprises aims to overcome barriers to trade for smaller businesses, which represent over 90% of companies worldwide and account for up to 70% of global employment (WTO, Trade Policy Briefs on MSMEs). Beyond these efforts, the broader Global Trade Network fosters connectivity and market related data sharing enabling new businesses make more informed decisions. Without a platform serving as a forum for collective voices provided by multilateral institutions, global trade may become plagued with higher tariffs, unilateral sanctions, and fewer platforms to contest disputes. In a landscape lacking a functioning multilateral regulatory body, the economic burden could grow exponentially, increasing inequalities and reducing ability to compete in international markets.
Even countries with limited geopolitical clout found ways to protect their interests through carefully orchestrated coalitions, amplifying their voices in negotiations. For instance, Antigua, one of the smallest countries in the Caribbean, won a WTO dispute against the U.S., proving to become an example of how dispute resolution system can empower nations to challenge unfair trade practices. If the WTO becomes hollowed out, these gains could evaporate. The monetary burden of pursuing trade grievances through ad hoc or bilateral negotiations would increase, and the dilution of global dialogue would render smaller nations even more peripheral in future policy making.
Is the WTO dying?
Still, declaring the WTO dead may be premature. Institutions rarely dissolve entirely, more often, they languish in states of crisis or inertia. Nations large and small continue to depend on its foundational structures for predictability and legal backing in trade relations, even if those structures are increasingly under strain. Furthermore, the rhetoric of withdrawal does not always translate into decisive action. The U.S. has repeatedly criticized the WTO but has yet to formally exit, aware that doing so could unleash chaos in global supply chains and diminish American leverage in setting the rules of trade. Now that these institutions have grown more balanced and less malleable to unilateral pressures, Washington’s pivot toward protectionism and its hints at withdrawing from these organizations reflect a new phase in its foreign policy, driven partly by domestic politics and the rise of competing global powers.
The question is whether any new or reformed structure could step in to fill the void. An argument can be made for the modernization of the WTO, suggesting that reforms in transparency, digital trade, regulation of subsidies, and dispute settlement could revitalize the organization for the twenty-first century. However, the failure of recent multilateral dialogues, from the stalemate in the Doha Round to the fractious negotiations over digital services taxes, are evidence that the existing system might be too cumbersome to adapt to the fast-changing economic realities of globalization.
The Multilateral Limbo: stuck, struggling, or set for a comeback?
Ultimately, the fate of multilateralism will depend on whether countries can reconcile the principle of collective benefit with the pursuit of national self-interest in a multipolar context. If large economies decide that they can better advance their agendas outside established forums, the global community risks further fragmentation, leaving smaller nations particularly exposed to the vicissitudes of power politics. Yet multilateralism was never about a single country’s benevolence, it was about forging a recognition that transnational challenges, be they trade barriers, pandemics, or persisting inequalities, require cooperation that transcends borders. Funding a global institution should not be a down payment on specific national returns but rather an investment in systemic stability. When a major contributor expects disproportionate influence, it undermines the idea of fairness and inclusivity, eroding trust among member states.
Perhaps the best characterization is that multilaterism remains in critical condition or a limbo, reliant on the political will of diverse and global cooperation to nurse it back to health. Whether it emerges revitalized or withers away will have profound implication on a stable, rules based trading system. And while the United States may seek to walk away from organizations that it helped build, the real test of multilateralism’s resilience lies in whether the rest of the international community can sustain and reform these systems without a singular hegemonic candidate. If they can, then multilateralism, far from being dead, may yet prove itself capable of revival in a multipolar age.
The author is former Director, WTO and President CRF