WTO Director Says Agency Facing Golden Opportunity to Reform

By Kate Wang

World Trade Organization Director-General Roberto Azevedo said in Washington last week that the agency is facing a golden opportunity to reform. Though the U.S.-China trade tensions have almost made the WTO collapse, experts believe that once the deal is done, it will be a big gain for all countries.

“We have a once-in-a-generation opportunity to renew the trading system, and this has to be a positive thing,” said Azevedo.

The global trading system is experiencing unprecedented changes. In December last year, in the communiqué of the G20 summit, leaders for the first time reached an agreement on reforming the WTO. Although the outlook is still unpredictable, WTO Director-General Azevedo said that the reform will follow some basic principles.

“It is clear that the WTO has to be better, has to be faster and more responsive,” said Azevedo.

WTO Director General Roberto Azevedo
World Trade Organization Director General Roberto Azevedo at the Peterson Institute for International Economics’ conference on ‘The Changing International Trading System: Value Chains, Digital Trade, and WTO Reform in Washington on April 11, 2019. (Chip Somodevilla/Getty Images)

Azevedo said that member states are now taking necessary and pragmatic steps to reform the WTO with quick and effective measurements. The reforms include strengthening the WTO’s existing rules, establishing settlement mechanisms, and improving the negotiation mechanisms.

Azevedo wrote on Twitter, “Spoke at the Peterson Institute in Washington DC on how the WTO is responding to the big challenges in global trade, and why the rules-based global trading system is more essential than ever but must be ready to evolve.”

Catalyst for Reform

The U.S.-China trade dispute is seen as the trigger for WTO reform. The Trump administration believes that the WTO has long been unfair to the United States, but benefited countries like China who have abused the system.

Dealing with China’s industrial subsidies, forced technology transfer, theft of intellectual property, and the special and differential Treatment that China enjoys as a developing country are all areas that the United States has asked the WTO to reform.

“It will be extremely hard to write down explicit rules to deal with these concerns that China’s system brings, because it’s always evolving,” said Chad P. Bown, a trade policy expert at the Peterson Institute of Economics.

The U.S.-China trade negotiations are still in the final stage. Dr. Bown believes that this is a great opportunity for changing China’s unfair trade practices.

“I think now we’ve got a whole host of issue that we can all put on the table,” said Bown. “And there is big gains for all of us if we actually get a deal.”

Chad Bown at Peterson Institute for International Economics
Chad Bown, senior fellow at the Peterson Institute for International Economics during his speech at the Peterson Institute in Washington on April 11, 2019. (NTD Screenshot)

To force the WTO to reform, the Trump administration has blocked appointing new judges to fill the WTO Appellate Body vacancies. If it continues until this December, this dispute settlement mechanism may be paralyzed. But Director-General Azevedo is confident that a solution will be found by then.

“No dispute settlement mechanism is not an option,” said Azevedo. “I think that is not going to happen. Something will be figured out, I don’t know what.”