{"id":13678,"date":"2026-06-26T15:42:50","date_gmt":"2026-06-26T13:42:50","guid":{"rendered":"https:\/\/www.rivistaeco.com\/?p=13678"},"modified":"2026-06-26T15:42:50","modified_gmt":"2026-06-26T13:42:50","slug":"the-new-multilateralism-of-variable-geometry","status":"publish","type":"post","link":"https:\/\/www.rivistaeco.com\/en\/2026\/06\/26\/the-new-multilateralism-of-variable-geometry\/","title":{"rendered":"The New Multilateralism of Variable Geometry"},"content":{"rendered":"

The World Trade Organization is facing systemic paralysis. While the European Union continues to defend multilateralism and China champions open markets, the United States persists in blocking the appointment of appellate judges in order to safeguard its own industrial and strategic interests. At least, this is the picture when it comes to trade in physical goods. The real battleground today, however, is digital trade. The future of the Moratorium on customs duties on electronic transmissions has profound implications for artificial intelligence and the global flow of data. Here, the major players unexpectedly switch roles: the United States supports international rules in order to protect Silicon Valley’s Big Tech companies, while Beijing advocates “digital sovereignty.” Europe, meanwhile, seeks to position itself as a regulatory mediator. In a world where technology and defense have become inseparable, multilateralism will survive only if it continues to be understood as a matter of mutual economic interest among powers that fundamentally distrust one another.<\/em><\/p>\n

 <\/p>\n

Is it time to abandon the idea of an international trading system governed by common rules and shared institutions?<\/p>\n

The conclusion of the 14th Ministerial Conference of the World Trade Organization, held at the end of March in Yaound\u00e9, Cameroon, makes this question even more pressing.<\/p>\n

To the average citizen, the WTO may seem like a distant acronym. In reality, it is the referee that determines whether the products we purchase\u2014from smartphones to wheat\u2014are subject to fair tariffs or become hostages in trade wars. After years of paralysis of the Appellate Body\u2014the tribunal responsible for settling disputes between states\u2014and amid the growing proliferation of unilateral trade measures, the Organization now stands at a crossroads: either it regains its role as the cornerstone of the international trading system or it is reduced to little more than a forum for discussion without real authority.<\/p>\n

What is at stake is not merely customs procedures, but the world’s ability to prevent competition among the major powers from degenerating into permanent economic disorder.<\/p>\n

Why Yaound\u00e9?<\/strong><\/h3>\n

The choice of Yaound\u00e9 carried strong symbolic significance. Holding a Ministerial Conference in Africa was no coincidence: it reflects the WTO’s global nature and its determination to include emerging economies and developing countries in the governance of international trade.<\/p>\n

Hosting the conference in Cameroon acknowledges that multilateralism cannot be perceived as an exclusively “Western club,” but must instead give voice to a diversity of interests.<\/p>\n

Ministerial Conferences are the Organization’s supreme decision-making body. They are far more than political summits: they are the formal occasions on which the WTO exercises its collective sovereignty. While the General Council oversees the Organization’s day-to-day operations in Geneva, Ministerial Conferences are where governments, represented by their ministers of trade or economy, adopt politically binding decisions.<\/p>\n

For European Union member states such as Italy, representation is unified: negotiations are conducted by the European Commission, giving the EU considerable negotiating weight.<\/p>\n

The Referee in Crisis<\/strong><\/h3>\n

The Conference’s most urgent issue concerns reforming the dispute settlement system.<\/p>\n

Imagine a football match in which the referee can call fouls, but no higher authority exists to validate the final result if one team challenges the outcome. That is essentially the current state of the WTO, caught between the competing interests of the world’s major powers.<\/p>\n

Let us begin with the European Union. Brussels remains the leading champion of rules-based multilateralism. For the EU, legal certainty is essential. If one day a country were to block exports of Italian wine without justification, Italy\u2014through the European Union\u2014must be able to rely on an international tribunal capable of imposing sanctions. Without a referee, the strongest economic\u2014or military\u2014power inevitably prevails.<\/p>\n

China, meanwhile, is playing a far more sophisticated game. Beijing presents itself as a defender of the multilateral system because, as the world’s manufacturing powerhouse, it depends on open markets. A stable and predictable rules-based system protects Chinese exports against sudden tariffs imposed by other countries, such as those recently introduced by the United States.<\/p>\n

Finally, Washington is the actor that triggered the current crisis. From the U.S. perspective, the former Appellate Body had exceeded its mandate, evolving into a kind of global Supreme Court that excessively constrained America’s freedom to pursue its commercial security and industrial policies.<\/p>\n

The United States is calling for a radical overhaul that restores greater prominence to national sovereignty. It does not want a referee empowered to interpret the rules, but rather a more flexible system allowing major powers to protect their strategic interests without being constrained by external legal rulings.<\/p>\n

In short, Washington is willing to play the game\u2014but only as long as the rules do not prevent it from defending its industrial and technological base.<\/p>\n

The result is a bifurcated system. Some countries, including China and the European Union, rely on the MPIA (Multi-Party Interim Appeal Arbitration Arrangement), an alternative appellate mechanism among participating members. Others, such as the United States, are able to “appeal into the void”: they challenge a ruling despite the absence of any functioning body capable of issuing a final decision. As a consequence, the original ruling remains suspended and cannot be fully enforced.<\/p>\n

The European Union supports the current system because it provides predictability. Beijing backs it to protect its exports. The United States, by contrast, argues for greater flexibility.<\/p>\n

America’s change of position is especially significant. After creating the multilateral system in the aftermath of World War II, Washington now regards it as no longer serving its strategic interests. China’s rise as a geopolitical rival, together with growing concerns over industrial and technological security, has prompted a renewed emphasis on economic sovereignty.<\/p>\n

To understand how this situation came about, it is useful to briefly retrace the key stages of the crisis. Following the creation of the WTO in 1995, with its two-tier dispute settlement system, the first tensions with the United States emerged during the 2010s, culminating in the systematic blocking of appointments to the Appellate Body beginning in 2017. The breaking point came in 2019, when the Body lost the quorum required to operate.<\/p>\n

Since then, despite temporary solutions such as the MPIA, the reform efforts launched during recent Ministerial Conferences have yet to produce a definitive outcome. At Yaound\u00e9, WTO members reaffirmed their commitment to reforming the dispute settlement system, but they remain divided over a fundamental issue: the binding nature of the second level of adjudication. The United States continues to oppose a strong Appellate Body, while many other members insist that the system must remain legally binding.<\/p>\n

The result is the continuation of the status quo: a formally multilateral system that is, in practice, incomplete.<\/p>\n

The Digital Trade Dilemma<\/strong><\/h3>\n

Virtually every category of product has become a target of U.S. tariffs, yet the real strategic battleground is digital trade.<\/p>\n

Since 1998, a Moratorium has prohibited customs duties on electronic transmissions. This means that when we download software, stream a movie on Netflix, or purchase a video game online, we do not pay customs duties at the border because digital information\u2014the “bits” themselves\u2014moves freely across borders.<\/p>\n

The Moratorium has been renewed repeatedly over the years, and it was extended once again at Yaound\u00e9, albeit only temporarily. Should it lapse, every country would be free to impose customs duties on every gigabyte crossing its digital borders.<\/p>\n

The consequences would extend far beyond the entertainment industry. They would affect the entire modern economy.<\/p>\n

For example, regardless of where it is installed, a wind turbine manufactured in Germany constantly transmits diagnostic data to its producer through cloud-based systems. Taxing those data flows would effectively mean taxing industrial production itself.<\/p>\n

The implications would be even more severe for artificial intelligence. Training AI models requires enormous quantities of data to move across national borders. If every transfer of data between servers located in different countries were taxed as though it were a physical commodity, the cost of developing or updating AI applications would become prohibitive. Scientific research would fragment along national lines, while global innovation would increasingly favor only those capable of keeping their entire data infrastructure within domestic borders.<\/p>\n

American Opportunism and Chinese Control<\/strong><\/h3>\n

This is where today’s geopolitical landscape becomes especially revealing. The United States is often portrayed as the WTO’s principal critic\u2014and rightly so. Washington has blocked appointments to the organization’s appellate tribunal. Yet, when it comes to digital trade, the United States has a powerful, highly pragmatic interest in preserving multilateral rules.<\/p>\n

Why? Because the digital platforms that dominate the global economy\u2014Google, Microsoft, Amazon, and Meta\u2014are American. If the WTO were to collapse and the Moratorium disappear, governments around the world could begin imposing arbitrary digital taxes aimed directly at Silicon Valley’s profits. For Washington, multilateralism is therefore no longer a philosophical ideal but a protective shield for its own corporations. The United States supports WTO rules governing digital trade not because it embraces international constraints, but because those rules prevent other countries from taxing America’s technological leadership.<\/p>\n

China responds with the doctrine of “digital sovereignty.” Beijing wants to participate in global trade while simultaneously preserving the sovereign right to control every piece of data entering or leaving its Great Firewall. This creates an inherent contradiction. China supports WTO rules when they facilitate exports of solar panels, electric vehicles, and other physical goods, yet it is far more cautious about allowing unrestricted cross-border flows of data and other intangible assets beyond state control. The risk is a fragmented digital world: an open, Western internet alongside an alternative, state-controlled internet centered on Beijing, with the WTO caught in the middle attempting to reconcile two fundamentally incompatible visions.<\/p>\n

Europe as the Broker of Rules<\/strong><\/h3>\n

Caught between American opportunism and Chinese state control, where does Europe stand?<\/p>\n

The European Union is above all a regulatory superpower. It lacks America’s technology giants and China’s centralized political control. Consequently, its comparative advantage lies in regulation.<\/p>\n

Brussels can aspire to become a coordinator, building a coalition of middle powers\u2014including Canada, Japan, African nations, and Latin American countries\u2014that seek clear rules for artificial intelligence and digital trade: rules capable of protecting citizens’ rights, particularly privacy, without stifling innovation.<\/p>\n

The European Union can demonstrate that security does not require isolationism.<\/p>\n

One of the greatest challenges in this respect is the increasingly blurred boundary between trade and defense.<\/p>\n

In the past, the distinction was straightforward: a tank was a weapon, a computer a consumer product.<\/p>\n

Today, in the age of artificial intelligence, virtually every technology has become dual-use.<\/p>\n

The algorithms that optimize logistics in an Amazon warehouse closely resemble those used to coordinate autonomous drones on the battlefield.<\/p>\n

If the WTO proves unable to define where commercial activity ends and national security begins, every country will be tempted to invoke defense concerns as a justification for restricting technological exchanges.<\/p>\n

This has already happened in the semiconductor industry, where the United States prohibited exports of advanced chips to China\u2014not for economic reasons, but to prevent Beijing from developing more advanced military AI applications.<\/p>\n

Peace Through “Bits”?<\/strong><\/h3>\n

In the aftermath of Yaound\u00e9, major multilateral gatherings such as the WTO’s 14th Ministerial Conference will no longer be merely a series of tedious technical meetings. They will also serve as a barometer of the world’s health.<\/p>\n

Economic integration does not guarantee peace\u2014we are learning that lesson the hard way\u2014but its erosion makes conflict far more likely.<\/p>\n

If the major powers come to recognize that a tariff war over data, artificial intelligence, and advanced technologies would leave everyone poorer and less efficient, multilateralism may yet find a new reason to exist. Its foundation will no longer be shared ideals so much as a balance of mutual interests.<\/p>\n

In truth, that has always been true to some extent. Even in the postwar era, the international rules-based system reflected concrete interests\u2014predominantly American ones. The difference today is that those interests no longer align with the existing institutional architecture, while the common ground of shared values upon which a new consensus might be built has largely disappeared.<\/p>\n

 <\/p>\n

Gianmarco Ottaviano is Professor of Economics and holds the Achille and Giulia Boroli Chair in European Studies at Bocconi University, where he also serves as Co-Director of the Research Unit on Globalization and Industrial Dynamics at the Baffi Centre.<\/em><\/p>\n

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