Multilateralism in international trade: Reforming the WTO

Since its establishment in 1995, the World Trade Organisation (WTO) has embodied the multilateral trading system. Despite successes in some areas, including the effective settlement of numerous trade disputes and the conclusion of new multilateral trade agreements, the WTO currently faces serious challenges to its legitimacy and its effective functioning.

Of particular concern is the US blockage of new appointments to the WTO’s Appellate Body (AB), which fulfils a key role in the WTO dispute settlement system. This impasse could soon paralyse the practical enforcement of multilateral trade rules, which would undermine the rules-based system. In addition, certain countries’ contentious trade practices cannot be addressed under existing WTO rules, and rules on transparency are not fully complied with. The WTO has also had limited success in adding new issues to its trade agenda, and the 2001 Doha round was inconclusive. This has led many countries to pursue their own trade agreements outside the WTO’s multilateral framework.

The EU was a key supporter of the multilateral trading system and sought to address the challenges that the WTO faces. In September 2018, the European Commission published a concept paper on WTO reform, in particular in the areas of rule-making, regular work and transparency, and dispute settlement. Other countries had also been working on WTO reform, sometimes together with the EU. A meeting of 13 WTO members, including the EU, to discuss reform proposals was due to take place in Canada on 24 and 25 October 2018.

The European Parliament strongly supported the multilateral trading system and had expressed its support for efforts to reform the WTO. The Parliament’s International Trade Committee was currently drafting an own-initiative report on the matter.

European Commission: DG Trade: WTO modernisation. Introduction to future EU proposals. Concept Paper, September 2018 http://trade.ec.europa.eu/doclib/docs/2018/september/tradoc_157331.pdf

ESO: Key source: World Trade Organisation http://www.europeansources.info/record/world-trade-organisation-wto/

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