World Trade Institute

Will Trump derail world trade?

The World Trade Institute (WTI) has been a major influence on international trade law for 25 years. Founder Thomas Cottier and director of studies Isabelle Van Damme discuss what the Trump presidency means for world trade and what the WTI can contribute to solving the current challenges.

Thomas Cottier: Bern is the capital, where trade policy is negotiated. But the fact that we have made Bern our home is primarily due to the fact that this is where we received the best offer when we started a quarter of a century ago. In 1999, the Silva Casa Foundation and the Canton of Bern granted us the funds to build up the WTI in a former printing works on Hallerstrasse with the support of the then Rector of the University of Bern, Christoph Schäublin. We also received a scholarship program from the State Secretariat for Economic Affairs (SECO) in the first 15 years. At the beginning, we were a private foundation but not part of the university. It did recognize our “Master of Advanced Studies in International Law and Economic Studies (MILE)” though. Once we’d been awarded large SNSF projects, we were then integrated into the University of Bern in 2007.

Thomas Cottier: Today, we are one of the world’s leading university education programs for trade policy. Most of our more than 500 alumni apply the knowledge they acquired here in the private, public or academic sector. I am particularly pleased that we were able to invite the best experts from the fields of law, economics and political science to teach here right from the start – and in fact at a time when the term “international trade law” was not really in common use yet.

Thomas Cottier: The WTI led the National Centre of Competence in Research Trade Regulation from 2006 to 2017. The project trained numerous young researchers and dealt with the relationship between trade policy and other policy areas such as human rights and environmental policy. Research was also conducted on the related issues of governance from the perspective of law, economics and international relations. We placed a particular focus on following developments in the WTO and formulated reform proposals.

Isabelle Van Damme: Not at all. Of course, the foundation of the WTI in 1999 was closely linked to the establishment of the WTO. But the focus soon opened up, and it also came to be about regional trade, supply chains and investment. Our focus has always been on the interfaces between international business, policy and legislation. It is not just the topics at the WTI that have changed, so has the public’s view of world trade. At the turn of the millennium, it was still viewed largely positively. But today the reversal of this opinion is obvious.

Thomas Cottier: The end of the 1990s was a time of global political awakening. The foundation of the WTO in 1994, the end of the Cold War and the economic opening up of China brought many radical changes full of hope. Back then, globalization helped lift many people out of poverty – and it continues to do so. But we soon saw a return of the trade wars. However, it would be wrong to label the WTI as an advocate of free trade and globalization that ignores the population’s legitimate expectations. Our aim is rather to help assess globalization, see legislation is passed on it and find a balance between all interests. This is also demonstrated by the previously mentioned National Centre of Competence in Research, which was titled “From fragmentation to coherence”: The goal of the WTI is to look at internal trade issues together with external problems and to discuss them to find the best possible solutions and regulatory mechanisms.

“It is a question of observing the whole production process and ensuring that it becomes more ecological and socially responsible. ”

Thomas Cottier

Thomas Cottier: Let’s consider the shift from product standards to production standards: According to the established rules, physical characteristics are decisive in whether two products are the same – and therefore also need to be treated equally in customs law. But over time, it became clear that it was not just the final product that’s important but also how it was made. It is a question of observing the whole production process and ensuring that it becomes more ecological and socially responsible. Since then, sustainability has become increasingly important in production. Research at the WTI has made an important contribution to this.

Isabelle Van Damme: His threats are nothing new; he already made many of them during his first presidency and even carried them out to some extent too. Even then, President Trump did little for existing multilateral institutions to avoid trade disputes or to negotiate legally. His administration favored unilateral measures to force its interests through, or engaged in negotiations outside the multilateral system.

“My hope is that the majority of states will not be deterred by this disruptive behavior.”

Isabelle Van Damme

Isabelle Van Damme: It does pose a threat to international organizations that embody and support the rules-based system. My hope is that the majority of states will not be deterred by this disruptive behavior. Maintaining the balance is a tricky business. For example, not just sticking to the dispute settlement system, but also developing it further and even opening negotiations on new issues in the WTO. The trick will be in allowing certain countries, such as the United States, to temporarily become more “hands-off” in the WTO, but without giving up their membership. And we hope that, sooner or later, certain developments will be universally recognized – also by those states that are showing disinterest now.

Thomas Cottier: A distinction must be made between Trump talking about imposing 100% punitive tariffs on Chinese electric cars, which is excessive and illegal, because no producer receives 100% subsidies, and the EU on the other hand, which is trying to calculate the amount of subsidies from China transparently, in line with the WTO’s regulations. These recent developments in the United States remind us of the importance of a rules-based system in world trade. Over the past two decades, we have more or less taken cooperation for granted. There was little interest in trade policy. Now we’re back to a parallel but separate existence.

Thomas Cottier: Geopolitical changes are making trade relations more complex. Governments and businesses need professionals who are well informed on the different aspects of world trade. That is what we want to achieve in our education and research programs. Today, our alumni sit in government offices, international organizations and increasingly in private companies. They closely follow and influence trade policy or have the goal of making their supply chains more robust. The interdisciplinarity that we cultivate at the WTI is particularly valuable in this respect.

“Safeguarding your own country against crises is good, but the concept has limitations.”

Thomas Cottier

Thomas Cottier: Climate change is such a challenge. It is in each country’s interest to find common responses to this life-threatening development. Ideological opinions must take a back seat here. Climate change is also making our food systems more unstable. In the future, it will become more important to help each other across national and continental borders when harvests fail. Safeguarding your own country against crises is good, but the concept has limitations. International cooperation is needed to solve the problem. This was also demonstrated a few years ago by the COVID-19 pandemic.

Thomas Cottier: Take the free trade agreement that the EFTA and Switzerland concluded with Indonesia in 2021. It is the first in the world to make aspects of sustainability, with regard to palm oil production, binding in the sense of the previously mentioned process and production methods. Or the free trade agreement with India, which Switzerland was able to conclude before the EU. Several WTI alumni were members of the Indian negotiating delegation. This highlights the practical benefits of the WTI: Those who have studied international trade law with us share a common basic understanding. In any case, India is an important partner for the WTI.

Isabelle Van Damme: We offer a joint education program with the Indian Institute of Foreign Trade for 25 students from the best Indian universities every year in Delhi. We also organize summer and winter courses as well as online seminars for professionals. This shows that the WTI is firmly anchored in practice.

“The WTI is to further expand the interdisciplinarity of our master’s degree, because networked thinking is incredibly important for future practice.”

Isabelle Van Damme

Isabelle Van Damme: Bern is very attractive in several respects. It is a quiet city and therefore a good base for education and research. At the same time, you can get to Geneva or any other important Swiss city quickly by train. But what I appreciate most about the University of Bern is the excellent and extremely diverse expertise: All it takes is a five-minute walk and I’m among experts from the fields of climate, agriculture, sustainability and space travel. Which brings me to one of my goals for the WTI: To further expand the interdisciplinarity of our master’s degree, because networked thinking is incredibly important for future practice.

About the person

Thomas Cottier is Professor Emeritus of European and International Business Law at the University of Bern and the former director of the WTI. He was educated at the Universities of Bern, Michigan and Cambridge. He was a member of the Swiss negotiating team for the Uruguay Round from 1986 to 1993. He founded the WTI in 1999 and headed it until 2015. Cottier has published extensively on international trade regulation and EU and Swiss foreign trade law.

About the person

Isabelle Van Damme is Professor of International Business Law and the WTI Director of Studies at the University of Bern. She studied at Ghent University, Georgetown University Law Center and the University of Cambridge. Previously, she worked in the private sector and as a consultant at the European Union Court of Justice. Her current research focuses on the administration and enforcement of EU sanctions legislation, as well as the procedural law of WTO dispute settlement mechanisms and free trade areas.

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