WTO reform: will a consensus ever be reached?

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It has been discussed many times before, but the issue of WTO reforms is once again hitting the headlines.


With the 12th Ministerial Conference of the World Trade Organization (WTO) about to take place in Geneva, attention has once again returned to the governing body itself and the current problems it is facing.

This is a topic that has been doing the rounds for some time, not least in the past year as nations around the globe have grappled with their responses to the COVID-19 pandemic and how trade can address it.

Now, though, there is a growing consensus that change and a complete overhaul of the WTO is essential - and that there may never be a better time to do it. Here, we'll take a look at why reforms might be necessary, what they might look like, and if they can ever be agreed upon.

New comments from the EU

Debate was sparked on the issue of reforms once again this month, when EU executive vice-president Valdis Dombrovskis gave a speech about the future of the WTO ahead of MC12.

In it, although he praised the organization for contributing to stable economic growth for 25 years, he insisted things cannot go on as they are amid hopes that "benign neglect" will make everything OK again. 

"The face of trade has changed considerably since the foundation of the WTO in 1995. Meanwhile, the rules that govern the organization have not. In its current form and state, the WTO is caught between a rock and hard place. Its negotiating function is paralyzed. Its dispute settlement system is frozen. The WTO is in urgent need of reform," Mr Dombrovskis concluded.

What does the EU think should happen?

He went on to outline what the EU thinks should happen next, which included the WTO being restored to the center of international trade negotiations and better provision for laws and regulations surrounding digital trading.

Mr Dombrovskis also addressed the WTO's dispute settlement system, which has certainly been a major sticking point in how the governing body will move forward. He called a working dispute resolution process 'critical' if trade conflicts are to be avoided and pointed out that independent adjudication would help to take the politics out of trading between nations.

In his concluding remarks, the vice-president said MC12 needs to be the place to start reshaping the WTO, with a view to having it relaunched in a more effective way by MC13 at the latest.

"We need all hands on deck. We have to stop speaking past each other and focus on what unites us rather than what divides us. The case for the WTO is irrefutable. Let us act and get things moving," Mr Dombrovskis pleaded.

How about the rest of the world?

The EU is not the only part of the world that has been giving its attention to WTO reform, either, with even those within the governing body acknowledging that matters cannot continue as they are.

Deputy director-general Xiangchen Zhang said during a speech in Singapore that he also thinks MC12 is a vital time for delivering concrete results on the challenges that have been confronting the multilateral trading system.

"A successful MC12 ... is critical for reinvigorating the WTO and demonstrating to the world that we are back in business. MC12 is an opportunity we cannot afford to miss," he commented.

Meanwhile, Britain's international trade secretary Anne-Marie Trevelyan has voiced the UK's support in reforming the WTO to ensure fairer rules for all and a more transparent system during a meeting in Italy.

Another key voice to have spoken up this month is that of the US, which has - perhaps surprisingly - come out in support of and commitment to the WTO.

Trade chief in Washington Katherine Tai insisted Joe Biden's administration is behind the institution and that it could be a force for good during a "race to the top". However, she too pointed out that the WTO has been slow to change in the face of rapid global developments and must alter in future.

Ironically, one of the biggest reasons behind this paralysis has been the US blocking appointments of new judges to the WTO Appellate Body - meaning it can no longer function at all - something Ms Tai neglected to address on this particular occasion. Despite former president Donald Trump having left office, Mr Biden has so far continued this policy.

In what seemed to be a rather pointed dig at the US in response, though, Mr Dombrovskis said he feels America in particular needs to help the WTO as opposed to letting it decline by neglect.

General consensus - and change?

There are many conflicting arguments in terms of what should happen next, but the general consensus is that the WTO cannot continue in its present guise and must get out of its current rut.

After all, even before the coronavirus problem, former chief Robert Azevedo told the BBC it was facing its worst crisis since 1947.

Perhaps, then, now is indeed the time for the nations at MC12 to grab the bull by the horns and provide a workable approach to WTO reform. In their united goal of bouncing back from the pandemic, developing and developed nations alike could be more receptive to working together and bringing trust back to the organization - and that could be a great place to start in creating new foundations for a fresh global trading system.