As the WTO flounders, the world’s middle powers go their own way

YAOUNDÉ, Cameroon — A last-ditch attempt to overhaul the stricken World Trade Organization failed at its ministerial conference in Cameroon, pushing a coalition of the willing to strike out on its own to save rules-based trade.

Talks to reform the global trade body collapsed on Sunday night over a standoff between Washington and Brazil — leading the work to be pushed back to the WTO’s General Council in Geneva this May.

A long-standing tariff ban on digital imports was also allowed to lapse, meaning that countries can from Monday impose duties on streaming services, software, and e-commerce transactions, though it seems unlikely countries will pull the trigger for now.  

“What happened in Yaoundé clearly underscores the need for reform,” said a diplomat to the WTO who, like others quoted in this report, was granted anonymity to speak candidly about sensitive discussions. “Again, we could not get consensus even though almost all members were ready to accept.”

After years of deadlock and rule-breaking by major powers, Western countries have banded together to form a contingency plan. If all 166 members can’t agree, smaller groups would strike their own “plurilateral” deals outside of the WTO framework, effectively bypassing its consensus-based rulebook. 

“We have plurilaterals already in the WTO,” said the diplomat quoted above. “There will be more, and it is part of the reform agenda that I hope members will endorse in Geneva very soon.”

Conversations also took place during the four-day gathering between the world’s largest trading blocs — the European Union and the 12-nation Indo-Pacific CPTPP that includes Canada, Australia, Mexico and the U.K. — to explore a digital trade alliance outside the WTO altogether.

The moves highlight a consequential shift. As deadlock deepens, countries are no longer waiting for the system to deliver — they’re looking to route around it.

Setting the scene

U.S. Trade Representative Jamieson Greer set the tone early in the ministerial, defending President Donald Trump’s tariff regime as a necessary correction to a broken system. 

“The global trading order embodied by the WTO … has overseen and contributed to severe and sustained imbalances … leading to deindustrialization, dependency, and despair,” he said.

Greer — under pressure from Silicon Valley and Wall Street — was focused on one immediate priority: locking in a permanent ban on digital tariffs.

Extending the so-called e-commerce moratorium, set to expire at the ministerial, appeared to be achievable. For the first time, India was not opposed to a two-year extension. But the U.S. and its allies pushed for the organization to go further, with Washington demanding a 10-year commitment.

The WTO Director-General Ngozi Okonjo-Iweala speaks during the ministerial conference in Yaounde on March 26, 2026. | AFP via Getty Images

Greer cast the issue as a litmus test for WTO reform, calling it the “lowest of low-hanging fruit” — and warning that failure would expose the organization’s inability to deliver.  

“The future of trade negotiations is likely to be plurilateral,” the U.S. trade chief warned. “If the pathway to incorporation is blocked, countries will still negotiate with their trade partners — but it won’t be at the WTO.”

What followed was a ping-pong negotiating tactic — Washington repeatedly linked progress on digital tariffs to broader reform efforts, effectively turning the moratorium into a battle over the institution’s future. 

“It’s the thing that kills issues — each issue should be judged on its own right,” said a Western official on the sidelines of the ministerial.

The consensus problem

The issue of consensus has long plagued the organization, which requires all members to agree before new measures can be adopted in the WTO rulebook.

In practice, that has allowed powers like India, the United States and Brazil to block agreements even if they have majority support. 

The issue came to a head when Brazil vetoed a digital tariff ban extension over the weekend.

While the country cited potential revenue losses from a digital tariff ban, diplomats from other countries said Brasilia’s negotiators felt their concerns on agriculture were not listened to and that they were dissatisfied with efforts to address them.

“Members must use the coming weeks to bridge remaining gaps and ensure that this critical measure is restored without delay,” said Sabina Ciofu, international trade policy lead at the techUK industry association. “The credibility and relevance of the WTO in the digital economy depend on it.” 

Separately to the digital tariff ban, Indian Commerce Minister Piyush Goyal torpedoed the Investment Facilitation for Development Agreement (IFDA) — a pact to simplify the rules for investing in developing countries — on the eve of the conference’s closing session.

“India showed the courage to stand alone,” Goyal wrote on X, criticizing members for “discussing guardrails and legal safeguards for plurilaterals before the integration of any specific plurilateral outcome.”

It was an issue that was supposed to define the ministerial conference — with previous holdouts like Turkey and South Africa publicly signaling they would not stand in the way.  

Trade ministers and high-level officials from over 166 countries gather for the opening of the conference in Yaounde on March 25, 2026. | Ahmet Emin Donmez/Anadolu via Getty Images

Working around the WTO

As talks ran into overtime, it became increasingly clear that plurilateral deals were the fastest way to secure progress.

A coalition of members pushed an e-commerce agreement into force through their domestic legislation. This includes provisions that maintain the tariff ban, providing an interim solution for the 66 signatories.

“[The EU] do not feel the sufficient sense of urgency in order to start delivering results,” said EU Trade Commissioner Maroš Šefčovič. “Therefore, plurilateralism is the way to reinvigorate the WTO.”

Over the course of the summit, attention repeatedly turned to talks taking place on the sidelines. Perhaps the most consequential was a meeting of the EU and CPTPP, or Comprehensive and Progressive Agreement for Trans-Pacific Partnership, where the two blocs explored plans to launch negotiations on a digital trade deal, setting rules on data flows, electronic contracts, and how data is stored and governed. 

“We meet every two years … the world has changed drastically in two years, trade has changed drastically in two years,” Canada’s Trade Minister Maninder Sidhu told POLITICO. “The conversations I’m having from morning to evening are, what does reform look like?”

Those in the discussions hoped that the Cameroon summit would focus on finding areas where rapid progress is possible, creating a work program moving forward. But with no consensus reached, that will now fall to the follow-up talks in Geneva.

A new system emerges 

Critics argue that work to secure deals without the backing of all WTO members undermines the organization’s role as a champion of free and fair trade — and risks fracturing the global trading system.

Jane Kelsey, an emeritus professor of law at the University of Auckland, said that the push “aims to sideline multilateralism so that self-selective groups of more powerful states can cherry-pick what they negotiate.”

But others like Keith Rockwell, a former WTO chief spokesperson who is now a senior research fellow at the Hinrich Foundation think tank, points out that in the previous General Agreement on Tariffs and Trade (GATT) system that existed before the WTO, countries could pick and choose which deals to sign up to.

“The system worked pretty well, but when the WTO came into being the thinking was that everyone should sign up to pretty much everything [and] Special and Differential Treatment would be extended to developing countries,” he said. “This has, I would argue, worked much less well.”

The plurilateral push allows countries to progress new deals, regardless of what blockers do. 

“They can change their regulations to align with the terms of the deal regardless of what India says,” he said. “In any event, what can the Indians do? Bring 66 WTO members to an impotent Dispute Settlement System? Good luck with that,” he added. 

What comes next

Countries have continued to signal they’re going to work around the issue of consensus. 

After the ministerial, countries backing the stalled investment deal issued a joint statement, led by South Korea and Chile, pledging to press ahead with the deal as a smaller group. 

“Despite the absence of consensus on incorporation, the initiative will continue to move forward,” they stated. 

“[Plurilaterals] should be seen as a potential template for the more flexible approaches that will be needed to move the system out of its current paralysis,” said Andrew Wilson, Deputy Secretary General of the International Chamber of Commerce. 

“The ultimate question coming out of this conference is not whether reform of the WTO system is necessary, but which government are prepared to step forward and build the coalition needed to advance it.”