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EU puts forward ideas to reform 'outdated' WTO

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EU puts forward ideas to reform 'outdated' WTO

Cecilia Malmstroem - Photo EC

(BRUSSELS) - A day after US President Trump announced tariffs on $200 billion of Chinese goods, the EU put forward proposals to upgrade World Trade Organisation rules, which it says are outdated and often ignored.

The EU's approach to WTO reform is outlined in a document which will be presented to EU partners in Geneva on 20 September during a meeting on that subject convened by Canada.

Presenting the Commission's concept paper, the EU's Trade Commissioner Cecilia Malmstroem criticised the United States in particular for blocking reform of the WTO's dispute settlement mechanism. She said the Appellate Body - "the core of the WTO's ability to function in a meaningful way" - was "on the verge of paralysis, because the nomination of new judges to replace those who are retiring is being blocked by the US."

She added that "Many member countries in the WTO ignore their transparency obligations - not being open with their trade policy when it comes to government support, for instance. They have an obligation to report that, but they don't."

Ms Malmsotroem added that the WTO had has not been able to adapt sufficiently to the rapidly changing global economy: "The world has changed, the WTO has not. It's high time to act to make the system able to address challenges of the today's global economy and work for everyone again. And the EU must take a lead role in that."

The EU has remained a staunch supporter of the multilateral trading system. On 28 June, the European Council gave the Commission a mandate to pursue WTO modernisation to adapt it to a changing world, and to strengthen its effectiveness.

The EU's new concept paper, already consulted with EU Member States, sets out the direction of this modernisation effort. Without prejudice to the EU's final position on these matters, these ideas relate to three key areas:

  • updating the rule book on international trade to capture today's global economy
  • strengthening the monitoring role of the WTO
  • overcoming the imminent deadlock on the WTO dispute settlement system.

The EU executive says it has started to engage with other WTO partners: with the US and Japan, in the framework of the trilateral discussions; with China, in the dedicated working group set up during the latest EU-China Summit; with other partners, most recently at the G20 Trade Ministerial.

It says the EU will continue discussing these first ideas with various WTO partners in the coming weeks with a view to preparing concrete proposals to the WTO.

EU concept paper on WTO reform

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