Published in China Daily： 2024-01-29
Trade lubrication
Chen Zhaoyuan
Consensus on action to reform the WTO would make the 13th ministerial conference of great significance.
Trade remains a key component of solutions to many global challenges. Therefore, there is an urgent need to reform the World Trade Organization in order to better leverage the role of the multilateral trading system. The WTO's forthcoming 13th ministerial conference to be held in Abu Dhabi, the United Arab Emirates, from Feb 26 to 29, will provide an important opportunity for all parties involved to reach consensus on reform issues. Since the 12th ministerial conference achieved multiple historic breakthroughs and vowed to carry out necessary reforms to the WTO, implementing the momentum of reforms into action has become a top priority.
The first thing that needs to be clarified is that the basis for reform is to maintain, rather than weaken, the authority and effectiveness of the WTO-centered multilateral trading regime. On this basis, inclusivity and transparency are the cornerstones of the reform process, which not only concern the reform's procedures and methods, but also affect its content and results.
The principle of inclusiveness emphasizes the need to ensure that all members, regardless of their size and strength, have a voice and influence in the reform process. The reform should not let a few members hold the final say, nor form discriminatory cliques. Special attention should be given to the needs and challenges of the developing countries, especially the least developed ones, with the intent of helping them enjoy more equitable opportunities for growth while integrating into economic globalization. The principle of inclusiveness means that reform should continue to place the development agenda at the core of the WTO's work, safeguard the development interests and policy space of developing members, and promote the balanced growth of the world economy.
Transparency should be another key principle of WTO reform, which requires transparency in the negotiation, decision-making and implementation of reform outcomes. Greater transparency will help enhance the participation and trust of member states in the WTO reform process, thereby boosting their sense of identification with the outcomes. In addition, the principle exerts pressure on the protectionist and double-standard behavior of certain countries, and in particular on the United States to stop undermining international trade rules and the multilateral trading system.
Attention also needs to be paid to urgent and mature reform priorities. On the one hand, urgent matters that endanger the normal operation of the WTO need to be prioritized, and currently, it refers to restoring the functioning of the WTO Appellate Body. The dispute settlement mechanism and its two-level trial system are important guarantees for the effective implementation of multilateral trade rules. The obstruction by the United States is the main reason for the deadlock in the Appellate Body. The US disregarded the opinions of the vast majority of WTO members and vetoed the proposal to initiate the Appellate Body member selection process for the 69th time at a meeting of the WTO's Dispute Settlement Body in October 2023. James Bacchus, former chairman of the Appellate Body, recently pointed out in an article that the hypocrisy of the Biden administration is most evident in WTO dispute settlement, and the US' accusations of the Appellate Body's lack of restraint are unfounded. On the contrary, the US has not restrained itself in applying unilateral and discriminatory trade measures. WTO reform should resolve the issue of the suspension of the Appellate Body at the soonest, promote the establishment of a comprehensive and well functioning dispute resolution system that all members can use, and put unilateralism and protectionist practices that violate WTO rules in the cage of the system.
On the other hand, the 13th WTO ministerial conference should be taken as an opportunity to implement the mature issues in the early negotiations into practical results, such as the second round of fishery subsidy negotiations, agriculture and food security, integration of small economies into the world trade system, plastic pollution, and e-commerce, etc. These fields represent different aspects of the global trade ecosystem and demonstrate the WTO's vitality in keeping up with the times. The related achievements also show the WTO's commitment to sustainable development and its ability to adjust regulatory frameworks to meet the trade needs in today's era, which will enhance the international community's confidence in WTO reform.
Innovative and pragmatic reform pathways must be adopted. Under the consensus rule, the effectiveness of the WTO is weakened, but if the consensus rule is abandoned, it may be difficult to prevent WTO reform from being dominated by major powers. An innovative and pragmatic solution to overcome this dilemma is to use the Joint Statement Initiative to realize multilateral outcomes through plurilateral agreements. The Investment Facilitation for Development Agreement is a recent noteworthy case. It has received support from over two-thirds of the WTO members and is the first major issue initiated and led by China and related developing members in the WTO. It is expected to further achieve practical results at the 13th ministerial conference. Furthermore, in the field of digital trade, 90 WTO members, including China, the US and Europe, substantially concluded negotiations on some global digital trade rules in December 2023. These members account for more than 90 percent of the global digital trade, and the Joint Statement Initiative on E-Commerce has become the core platform for formulating high standard digital trade rules.
Another innovative and pragmatic reform pathway is to consolidate the WTO's deliberative function. Alongside negotiation and dispute resolution, trade policy review is one of the major functions of the WTO.Strengthening the deliberative function would provide WTO members with a space to discuss both emerging and longstanding trade issues, promote policy analysis and consensus building. Given the important role of deliberation in ensuring transparency in trade policies among WTO members and monitoring their compliance with WTO rules and commitments, trade frictions can also be avoided or resolved through the deliberative functions of various WTO committees and their subsidiaries in the future.
With unilateralism and protectionism on the rise, some economic and trade issues have shown a trend of politicization, weaponization and pansecuritization, and the multilateral trading system has been severely shocked in recent years. It is imperative to reform the WTO to ensure the smooth running of the global trade system. With the convening of the 13th ministerial conference, China, as a responsible developing country, should continue to be a staunch supporter of multilateralism and global governance, contributing wisdom and strength to achieving substantive progress of the WTO reform.