House Budget Committee Urges National Leaders to Reinforce the Functions of the WTO

Jakarta: Since the tariff war between China and the United States (US) broke out in 2018, and has continued to this day, even escalating to many countries after US President Donald Trump imposed tariffs on many countries, Indonesia has been heading towards a chaotic international order.

Back then, Indonesia initiated international relations to further develop together under the auspices of the General Agreement on Tariffs and Trade (GATT). This trade and tariff agreement was created because many countries implemented economic protectionism following the Great Depression of the 1930s. GATT was established on the principles of non-discrimination, transparency, and equality between exports and imports. GATT grew and developed into the World Trade Organization (WTO) in 1995.

Developed countries, such as the US and Europe, were aggressively promoting free trade across all regions. They viewed tariff policies as a distortion of what should be free trade, a market mechanism. Developing countries, like Indonesia, feared that the free trade era would crush their uncompetitive goods and dominate the domestic market.

Over time, all countries were "forced" by developed nations to join the WTO and participate in the free trade arena. Of course, in the early days of their WTO membership, developing countries like Indonesia were "battered" like a David-Goliath battle in the free trade arena, due to disparities in product quality, prices, and production capacity.

Since the WTO's inception, 631 international trade disputes have been adjudicated, with 503 of these cases reaching the appeal stage. Over time, the WTO regime has become a commonly recognized international mechanism. Developing countries are being forced to grow faster and achieve higher quality to compete in the free trade arena. Some developing countries have even surpassed developed countries.

Vietnam, Thailand, and Indonesia are examples of developing countries that have been able to compete in the WTO era. China has even become a new leader in international trade. In 2024, China's global trade value reached USD 6.164 billion, surpassing the US's USD 5.424 billion.

Oddly, when the US began to overtake and its manufactured products became less competitive, resulting in a trade deficit, it then arbitrarily imposed tariffs on many countries. It's both amusing and sad that not a single country took this case to the WTO. Everyone was busy negotiating with the US, holding a weak bargaining position. It wasn't negotiations, but begging for mercy. Only China persisted, steadfast in engaging the US in a tariff war.

"I urge all countries to think multilaterally. It's time for the WTO to prove itself in the international interest. In the beginning, developing countries accused the WTO of being a tool for developed countries to push all countries into the free trade era so they could dominate the international market. Those who didn't enter the free trade arena were ostracized and sanctioned," said Said Abdullah, Chairman of the House of Representatives Budget Committee, in his statement on Wednesday, July 23, 2025.

He explained that now that the free trade era has begun, simply because it can't compete, the US is closing itself off through tariffs. According to him, this clearly violates the tenet of free trade, namely trade without tariff barriers.

"Why is the WTO silent? The WTO's silence further confirms that the WTO institution is only needed if it aligns with the interests of developed countries like the US. If it doesn't, it's no longer needed," he stressed.

According to him, it's time for world leaders to reassert their international commitments. Furthermore, they should strengthen international institutions, such as the WTO, IMF, and World Bank, as they function, so that no one or two countries can freely act arbitrarily and selfishly.

"If the world no longer needs these international institutions, it's better to disband them. Rather than pretending they don't exist. Why should we contribute to the WTO, IMF, and World Bank if they are in fact just a malfunction, wasting money for nothing?" he said.

He also encouraged each country to resolve its financial, trade, and economic problems bilaterally and regionally, according to their respective interests, such as through the G20, BRICS, and ASEAN. "But if we see it as important, there's still a glimmer of hope. Let's work together more closely, strengthen our resolve, and re-enforce and perfect the WTO, IMF, and World Bank as a fairer path to international resolution," he said.