Hybrid Multilateralism for Development: Role of the WTO and Aid for Trade

There are common characteristics to the schemes of multilateral institutions that successfully supported nondiscriminatory trade liberalization in developing countries in the past – accession to the World Trade Organization (WTO) since 1995 and policy-based lending (PBL) by international financial institutions (IFIs) in the 1980s and the 1990s. Both represent and combine unilateralism as a subject of liberalization, bilateralism as a mode of market access negotiations, and multilateralism for the final approval, as integral elements of their institutional design. Future trade-related initiatives by multilateral institutions should be designed based on such hybrid multilateralism that integrates unilateral, bilateral, and multilateral approaches and worked in the past. After the global financial crisis in 2008–2009, the world economy entered the phase of ‘slowbalisation’ and is presently faced with geoeconomic fragmentation. Multilateral institutions should help endeavour to ‘re-globalize’ the world trade landscape. To this end, aid for trade by IFIs can reactivate use of trade-related conditionalities in their PBL operations for developing countries, and the WTO should enhance its Trade Policy Review Mechanism (TPRM).