The growing fragmentation of the global trading system, intensifying geopolitical conflicts and mounting pressure for global trade reforms have reignited debates about the future of multilateralism and the role of plurilateral trade agreements within global intergovernmental body the World Trade Organisation (WTO).

These issues formed the core of a recent Trade and Industrial Policy Strategies (TIPS) webinar – held last month under the theme ‘Development Dialogue: Economic Diplomacy in a Changing World’ – during which policymakers, academics and trade experts examined the implications of shifting global trade power dynamics for developing countries, including South Africa.

The webinar took place against the backdrop of increasing uncertainty in the global economy, with tensions over industrial policy, tariffs, strategic minerals, climate-related trade measures and digital trade increasingly reshaping long-established trade relationships.

Opening the discussion, Department of Trade, Industry and Competition (dtic) trade deputy director-general Xolelwa Mlumbi-Peter said the current global trading environment was undergoing profound structural changes that were undermining predictability and weakening a multilateral rules-based system that has governed trade for decades.

“For the best part of three decades, the world had settled into a predictable trading environment that offered a rules-based multilateral trading system. But in recent years we have seen that this system has come under significant strain,” she noted.

Global Power Dynamics

University of Cape Town School of Economics adjunct professor Dr Faisal Ismail placed the current global trade debate in a historical context by tracing the evolution of the General Agreement on Tariffs and Trade (GATT) and the WTO.

According to Ismail, many of the tensions currently evident in the global trading system reflected longstanding structural imbalances that were embedded in the original trading order after World War II and have persisted to the present day.

He noted that the US and the UK played dominant roles in shaping the early GATT framework, with developed countries setting negotiating agendas and designing rules in ways that often disadvantaged developing economies.

Sectors in which developing countries held comparative advantages, particularly agriculture and textiles, were historically excluded from meaningful liberalisation by advanced economies.

“At the heart of the debate is asymmetry – whether the system is fair, unfair and imbalanced, and from whose perspective,” Ismail added.

He explained that developing countries entered the Doha Development Round in 2001 seeking reforms that would address these imbalances and create a more equitable trading system based on development-oriented outcomes. However, the eventual collapse of the Doha Development Round marked a turning point in global trade governance.

The changing global economic realities, including the rise of China and other emerging economies, prompted developed countries, particularly the US, to shift away from broad multilateral negotiations towards narrower issue-specific arrangements, Ismail elaborated.

He also highlighted submissions made ahead of the recent WTO Ministerial Conference (MC14), held in Yaoundé, Cameroon, in March, where some countries advocated for plurilateral approaches that would extend benefits only to participating members. Such proposals, he warned, risked deepening fragmentation within the global trading system and further marginalising developing countries.

Evolving Position

Trade and Industrial Policy Strategies executive director Dr Saul Levin provided a data-driven assessment of South Africa’s evolving trade profile and its implications for the country’s economic diplomacy.

Although South Africa had maintained a trade surplus in recent years, supported in part by strong commodity exports during the post-pandemic recovery period, the country’s export basket remained heavily concentrated in minerals, metals and other resource-based products.

“South Africa is still very commodity focused. Our largest exports are metals, minerals and ores, but also increasingly vehicles and agricultural products,” Levin added.

He also noted that South Africa’s trade relationship with China was becoming increasingly significant, particularly in relation to critical minerals, industrial investment and agroprocessing exports, while highlighting emerging opportunities linked to new Chinese market- access measures for African exports.

“China is still our largest trading partner. They went on a charm offensive immediately after the US imposed tariffs last year – and quite successfully,” Levin said.

He also outlined the risks and opportunities associated with South Africa’s trade relationship with the EU, including the implications of the EU Carbon Border Adjustment Mechanism.

Levin argued that South Africa’s economic diplomacy would increasingly need to focus on diversification, decarbonisation and digitalisation, and also stressed that industrial and trade policy could no longer be considered in isolation from broader issues such as climate transition, energy security, digital infrastructure and technological change.

Reforming Multilateralism

UK Foreign, Commonwealth and Development Office Southern Africa trade policy head David Machin offered a perspective from the UK, arguing that the challenge facing countries was no longer whether the global trading system was changing, but rather how governments responded to those changes.

While the WTO remained central to global trade governance, providing predictability, stability and dispute resolution, achieving consensus among the organisation’s diverse membership had become increasingly difficult, he acknowledged.

Against this backdrop, Machin argued that plurilateral approaches could provide pragmatic mechanisms for advancing negotiations in areas such as digital trade, investment facilitation and e-commerce: “Multilateral solutions remain the gold standard, but where consensus across the full WTO membership has proven difficult, we believe plurilateral initiatives can offer a pragmatic way to make progress in specific areas”.

He also emphasised that well-designed plurilateral agreements could still remain inclusive if they incorporated transparency, openness and flexibility for developing countries.

Regional integration initiatives such as the African Continental Free Trade Area (AfCFTA) remained important, while regional agreements, bilateral partnerships and multilateral frameworks should be viewed as complementary rather than competing approaches.

Machin added that the UK remained committed to supporting AfCFTA implementation through technical assistance and trade facilitation support.

Meanwhile, senior academic and global governance expert Professor Daniel Bradlow argued that many of the current tensions within the WTO reflected broader shifts in global political and economic power.

The creation of the WTO, following the signing of the Marrakesh Agreement in April 1994, coincided with a period of optimism after the end of the Cold War, when advanced economies still dominated the global trade system. However, the subsequent rise of China and other emerging economies fundamentally altered global power dynamics.

“The balance of power was shifting relatively from the rich countries towards a more balanced situation in which at least some countries in the Global South were becoming important,” Bradlow added.

He noted that issues such as climate policy, labour standards, technology governance and industrial policy had become increasingly intertwined with trade negotiations, thereby creating new sources of tension within the WTO. As a result, modern trade governance was no longer concerned solely with tariffs and goods, but increasingly with how products were produced, regulated and integrated into global value chains.

Bradlow argued that African countries would need to strengthen regional coordination and develop common negotiating positions to enhance their bargaining power within global trade forums: “I think it creates opportunities in terms of regional integration and creating more economic development on the continent, but also more challenges in terms of economic diplomacy”.

World Trade Organisation permanent representative for South Africa Ambassador Mzukisi Qobo told Engineering News & Mining Weekly after the webinar that plurilateral agreements could coexist with the WTO framework, provided they did not undermine the developmental and multilateral foundations of the global trading system.

Qobo noted that the growing use of plurilateral arrangements reflected the difficulties associated with achieving consensus among the WTO’s 166 members amid heightened geopolitical tensions and increasingly diverging national interests. However, he cautioned that poorly designed plurilateral frameworks could sideline developing-country concerns.

“What is required is that there are guidelines or conditions that ensure that the adoption of plurilateralism doesn’t damage the multilateral spirit.”

Multilateralism remained essential for preserving predictability, fairness and non- discrimination in international trade, and the WTO would continue to play a critical role in areas such as customs valuation, sanitary and phytosanitary standards, technical barriers to trade and trade policy reviews, all of which contributed to stable and predictable global commerce.

Qobo maintained that South Africa’s economic diplomacy should remain firmly anchored in developmental objectives while pursuing diversified and pragmatic international partnerships. This, he said, required balancing bilateral relations with major economies, such as the US, China and the EU, while simultaneously deepening regional integration through the AfCFTA, the SADC and the Southern African Customs Union.

He added that Africa’s expanding market and demographic profile presented significant long-term opportunities for industrial development and market integration. From a South African perspective, there should therefore be sustained efforts to support a reformed multilateral system.

“We should remain committed to giving multilateralism a chance, working with all countries to build bridges and ensure that the WTO remains at the centre of the global trade system,” he concluded.