WTO talks: As power exertion intensifies, multilateralism has become more relevant, not less

With the next Ministerial Conference of the World Trade Organization (WTO) approaching, the future of multilateralism is in the spotlight. Ministers from across the world will discuss the future of global trade rules at a time when the multilateral system is already under strain—from stalled negotiations and dispute settlement paralysis to the growing preference among major economies for bilateral and plurilateral arrangements.

Against this backdrop, the broader geopolitical shift towards spheres of influence and transactional diplomacy raises a fundamental question: Can the WTO remain a credible platform for collective rulemaking or will it gradually be sidelined by power-driven bargaining among the largest economies? This matters profoundly for developing countries, given that a functioning multilateral system is one of the few mechanisms capable of balancing asymmetries of power in global trade.

At the heart of this changing world order is the return of spheres of influence as an organizing principle of international politics. In the decades following the Cold War, the prevailing assumption was that the world was moving towards a rules-based order. Multilateral institutions were designed to provide platforms where countries could negotiate, resolve disputes and pursue collective solutions to global challenges.

That assumption is now under strain. Major powers are increasingly comfortable with the idea that different regions may fall under the strategic influence of particular states. Rather than relying primarily on universal institutions, they are turning to arrangements that reflect geopolitical alignments and power hierarchies.

This does not necessarily imply the abandonment of international institutions. But it does suggest that decisions once expected to emerge from multilateral negotiations are being influenced by strategic bargaining among major powers.

A key driver of this shift is the growing emphasis on bilateral relationships. Washington’s strategic posture has increasingly prioritized direct alignments with individual partners rather than broad multilateral frameworks. Bilateral agreements allow greater flexibility, faster negotiations and, most importantly, greater leverage.

From a tactical perspective, bilateralism offers advantages for powerful countries. Negotiating one-on-one enables them to shape outcomes more effectively than within large forums where smaller states can collectively influence the agenda.

Yet, these dynamics challenge the broader international system: as negotiations shift in favour of bilateral arrangements, the imbalance between large and small economies becomes more pronounced, weakening the design of multilateral institutions in levelling the playing field.

Another dimension of the emerging geopolitical environment is the changing value of formal commitments. In this worldview, traditional diplomatic agreements institutionalized through treaties and outcome documents are increasingly seen as secondary to immediate negotiating leverage.

Policy decisions in such a framework are shaped less by institutional obligations and more by transactional calculations. What matters most is the balance of advantage in any given negotiation: who holds leverage, who requires access and what concessions can be extracted.

For many countries, this approach heightens uncertainty in international relations. Agreements once assumed to be stable may become subject to renegotiation, while strategic commitments can evolve quickly depending on domestic politics or economic pressures. Such flexibility may benefit powerful states capable of rapidly adjusting their negotiating position, but it complicates long-term planning for others.

The Global South faces an important strategic question: How can they protect their interests in a world where rules are becoming more fluid and power asymmetries more visible? The answer lies in strengthening multilateralism, not abandoning it.

Ironically, the more strain global institutions face, the more indispensable they become for developing countries as smaller economies depend on multilateral frameworks that provide them with transparency, predictability and dispute resolution. They also allow coalitions of countries to shape global rules in ways that would be impossible through purely bilateral channels.

The Global South, therefore, has a strong incentive to safeguard these institutions. This does not mean defending the status quo blindly, but reforming them for new realities. The task is clear: To ensure that the rules of the international system are not written solely through power, but participation, negotiation and shared responsibility.

Developing countries collectively represent the majority of the world’s population and a growing share of global economic activity. If they act together, they can shape the future of international institutions rather than simply reacting to the preferences of major powers.

India can contribute to this effort. As one of the largest economies in the developing world and an increasingly influential diplomatic actor, India has advocated for a more inclusive and representative global order, demonstrating through its leadership in forums such as the G20 that multilateral diplomacy remains both possible and necessary.

The challenge ahead is not simply to preserve existing institutions but adapt them to a more contested geopolitical landscape. That will require creativity, coalition-building and a willingness to reform outdated structures while preserving the core principles of collective governance.

The world may be entering a new era of strategic competition and regional influence. But that does not make multilateralism obsolete. On the contrary, it makes it indispensable.

The author is president, Chintan Research Foundation, and former director at the World Trade Organization.