In 2019, Kent Jones of Babson College wrote in an opinion column on barrons.com that recent trade disputes might result in the collapse of the WTO. If that happened, then “unbound by any WTO constraints, countries would be free to negotiate or impose new tariffs on imports from their trading partners who could, in turn, respond with higher tariffs on their trading partners.”
a. What was the purpose of the WTO when it was established?
b. If the WTO collapsed and had the consequences that Jones outlines, which groups would be made better off, and which groups would be made worse off? What would happen to the economic efficiency of the world economy? Briefly explain.