The crisis-hit World Trade Organization (WTO) is going through difficult times. World leaders have committed to an overhaul of the Geneva-based institution, but it is unclear what the future holds. Swiss ambassador to the WTO Didier Chamboveyexternal link gives his view.
The year 2018 was marked by a number of challenges for the multilateral trading system and for international trade in general.
Rising tensions between some trading powers have led to a proliferation of measures and countermeasures, which are weighing on the development of trade. The WTO’s dispute settlement system is in crisis, with the United States blocking the appointment of new judges to the Appellate Body [the world's top trade court]. This situation could lead to a paralysis of this body by December, due to a lack of judges to validly deliberate.
With respect to the organization's negotiating role, concluding new multilateral agreements has also become extremely tough. Big differences remain, particularly on topics that have long been on the WTO agenda, such as agriculture, services and industrial products. In addition to the multitude of members' interests, several states are sceptical about the ability of trade to contribute positively to their economic development.
To overcome these obstacles, it’s necessary to reform the WTO, both to improve the way it functions and to better meet the needs of its members. Although there is still no consensus on the content of such a reform, the G20 acknowledged the need for it at its December 2018 summit.
Reflections are still at the exploratory stage and are being carried out in various forums, especially within the Canadian initiative, where Switzerland is an active participant. These issues were at the heart of the informal ministerial meeting organised by Switzerland and which brought together 32 WTO members on January 15, 2019, in Davos.
Reforming the WTO is not just about resolving the dispute settlement mechanism crisis, although this question remains a priority. For Switzerland, it is also about modernizing the organization to enable it to restrain protectionist tendencies and to adapt to major changes in the structures and modalities of international trade. To this end, it is important to increase the transparency of different trade practices and policies.
The reform should also examine ways to differentiate commitments made by developing countries according to their respective economic capacities.
Other issues on the agenda this year include negotiations on the elimination of certain subsidies that contribute to overfishing, in accordance with the United Nation's Sustainable Development Goals (SDGs). The modernisation of e-commerce rules is also needed. Switzerland and 75 other countries – including the US, the EU and China – adopted a declaration of intentexternal link to this effect in January 2019 in Davos.
The multilateral trading system is one of the main pillars of Switzerland's foreign economic policy. The WTO guarantees favourable and predictable trading conditions and is the best tool against the law of the strongest. It is crucial to preserve the WTO’s credibility and to improve the way it works. It is with this in mind that Switzerland is actively participating in reform efforts aimed at achieving concrete results, particularly at the 12th WTO Conference in Astana in June 2020.
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