WTO (Negotiations, Regular Work, Leadership)

An Agenda for Reforming the World Trade Organisation – A New Wind Blowing

There have been calls by developed countries to reform the World Trade Organisation (WTO), including recently by the European Union and Canada covering dispute settlement, regular work and transparency, as well as rulemaking. This paper discusses whether there is a case for reform in these areas, from a developing country perspective.

There have been calls by developed countries to reform the World Trade Organisation (WTO), with the European Union and Canada in 2018 putting on paper definite ideas on how they wished to see the reform done. The proposed reform is shaped around three areas: i) safeguarding and strengthening the dispute settlement system; ii) the WTO regular work and transparency, including improving the efficiency and effectiveness of the WTO monitoring function; ii) rulemaking in the WTO, modernizing the trade rules for the twenty-first century, including the approach to the development question. The catalyst for the calls for reform is the continued blockage by the US of the appointment of Appellate Body members.

But has a case for reform been made? The case for reforming the WTO dispute settlement system is no stronger now than it has always been. The reason members will go along with reforming the WTO dispute settlement mechanism is simply because not doing so would mean that there will be no functional WTO dispute settlement system soon. The case for reforming the WTO regular work and transparency looks more like a call for reinvigorating the regular work, and can be accommodated within existing mandates and the WTO mechanisms already in place. On these two issues every Member is therefore bound to have both offensive and defensive interests in the agenda being proposed. However, an agenda for rulemaking in the WTO and the so-called modernizing is a harder case to sell. The current understanding amongst the WTO membership is that those Members who are willing to pursue issues on which there is no multilateral consensus can do so in plurilateral arrangements. That understanding is unlikely to change.

On the two issues of dispute settlement and WTO regular work it would be in the interest of all Members to get involved in shaping the form and content of the proposed reform agenda. Every WTO Member should certainly have an interest in seeing the dispute settlement mechanism working optimally, and the WTO regular work invigorated.

It is interesting that it is the action of a developed country, the US, which has given rise to calls for reforming the WTO. Developing countries have repeatedly stated in the past that the WTO is not delivering for them. So there is now a new wind blowing. But on the other side of this wind lies another floundering reform agenda, the DDA. Lessons abound from that experience. Even limited outcomes based on the proposed reform agenda would be welcome for a WTO that could be consigned to irrelevance through failure once again.