Oxford – The impact on developing economies of WTO dissolution

The authors discuss the potential impacts on developing economies if the World Trade Organization (WTO) were to dissolve. They explore various scenarios, ranging from a global trade war to a gradual erosion of trust leading to a breakdown of commitments. They argue that even the best-case scenario for WTO dissolution would have negative repercussions for developing countries, as trade is a key driver of their growth. The authors predict increased uncertainty, higher information costs, and potentially higher levels of protectionism between countries without free trade agreements. However, they note that the interconnectedness of global value chains may deter some protectionist policies. They focus on the long-term structural impacts, predicting that the effects of WTO dissolution would intensify over time, peaking by 2030 and remaining permanent. They also suggest that trade impacts would be limited to non-fuel goods and that potential effects on services trade would be minimal.