This paper provides a historic perspective to the debate on reforming the WTO. It focuses on issues of concern to developing countries, and the calls for institutional reform in the early years of the WTO in relation to its three key functions. The paper also delves into lessons learned from over 20 years of reform debates, and attempts to address the current realities that have brought the reform debate to the forefront at the WTO in recent years.
The challenges faced by multilateralism and increased protec- tionism in the last few years, coupled with rapid changes to the global order – economic, socio-political and technologi- cal – have warranted adaptation, changes and in some cases overhaul of existing protocols and arrangements. The multi- lateral trading system has not been spared; the system is fac- ing unresolved and emerging challenges brought about by increasing inequality among and within nations.
The World Trade Organization (WTO), as one of the global governance institutions, has been under pressure in recent years to reform. The debate about reform is not new but re- flects the evolving realities of global trade. The trade rounds during the GATT era were accompanied by various needs to adapt to changes and realities. The GATT started with 23 members, while the WTO was established in 1995 with 128 members. As of 2019, the WTO had 164 member countries. The increasing membership and the evolution of the world trading system have made the process of negotiations and decision-making complicated and the scope of the issues has also widened beyond tariffs. It must also be noted that con- sensus is more and more difficult to achieve because a small number of major economic powers are unable to resolve their differences over old and new issues.
Bertelsmann Stiftung (2018) cited issues emanating from structural transformation driven by technological change as major forces affecting labour markets independently of trade. Moreover, the rapid expansion of the digital economy, reflected in shifts to e-commerce, the servicification of man- ufacturing and associated cross-border flows of data, servic- es and digital products are changing demand for skills and the organisation of international production.
Various reports, including the Sutherland Report (2004), the Warwick Commission (2007) and Bertelsmann Stiftung (2018) have concluded that the WTO is not the panacea for all economic ills, but that it provides an opportunity for gov- ernments to define and operationalise rules that govern trade with and among countries.
This paper provides a historic perspective to the debate on reforming the WTO, while noting that developing countries were the initial proponents of the reform agenda. Chapter 1 focuses on issues of concern to developing countries and the calls for institutional reform in the early years of the WTO in relation to its three key functions: administering trade agree- ments, facilitating trade negotiations and settling trade dis- putes. Lastly, it delves into lessons learned from over 20 years of reform debates.
Chapter 2 attempts to address the current realities – new external and internal realities – that have brought the reform debate to the forefront at the WTO in recent years. This will include analysis of current proposals by members on the three key functions of the WTO and identify areas of divergence and convergence. Chapter 3 addresses the need for a holistic approach towards a more inclusive, fair and efficient WTO.