The EU presented its ideas for reforming the World Trade Organization

September 19, 2018 10:08 amComments Off on The EU presented its ideas for reforming the World Trade OrganizationViews: 138

Cecilia MalmstromThe European Commission publishes its ideas for a reform of the World Trade Organization (WTO) to overcome market distortions such as those in China and prevent the US from leaving the organization.

A day after the US President Donald Trump triggered another round of duties in the trade war with China the European Union presented its ideas to combat subsidies distorting the market.

Donald Trump said last month that he could withdraw the US from the WTO, potentially undermining one of the foundations of the modern global economy, in which Washington has played a major role.

“The world is changing, but the WTO is not. It is time to take action to make the system capable of meeting the challenges of the global economy today and working again for all. And the EU must have a leading role in this”, said the EU Trade Commissioner, Cecilia Malmstrom.

Without mentioning the EU’s final position on these issues, the ideas are related to three key areas. The areas are: updating the set of rules in international trade to cover today’s global economy, strengthening the role of the WTO as an observer, as well as overcoming the stagnation observed in the WTO dispute settlement system.

Washington accused the WTO of losing its focus on trade talks in favor of litigation and blocking appointments in the Dispute Chamber. By the end of September, the seven-member chamber will have only three judges, the number needed to hear each complaint.

The United States’ position has led to a series of diplomatic talks as WTO members are trying to prepare their response. The top-level sales representatives met in Geneva in July and will meet again this week before a ministerial meeting in Ottawa.

European leaders urged the Commission in June to make proposals with “partners with similar positions” to improve the work of the WTO in key areas such as subsidies, law enforcement and negotiations.

The WTO works on the basis of consensus among its 164 members, each having the right to veto. This is why the new initiatives risk becoming a circulation coin. A few reforms have been successful so far, many of which have stalled, including talks on cutting agricultural subsidies, strengthening market access, reforming access to medicines, improving the dispute settlement system and liberalizing trade in services.

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