The World Trade Organisation (WTO) was established in 1995 with the objective to create the same conditions for all members. However, according to the view of the European Commission (EC), which acts as the representative of the Member States within the WTO, this objective is no longer satisfactorily fulfilled. That is why the EC has now complied with its own demand and presented a concept paper on the modernisation of the WTO on 18 September 2018. The main focus of the Commission is thereby on updating the rules, developing the monitoring function including sanctions and on averting an imminent blocking of the dispute settlement system.
Currently, the US government is blocking the appointment of new judges for the Appellate Body of the WTO. If this blocking would continue until the end of 2019, the Body, which actually consists of seven judges, would be reduced to fewer than three judges and therefore would no longer have a quorum. In its concept paper, the Commission is proposing to improve the dispute settlement process to enable a smooth cooperation between Appellate Body and WTO members. It also wants to strengthen the Body's independence. The Commission has already entered into trilateral talks with the United States and Japan, and also with China. Talks have also taken place with the G20 Trade Ministers, who were already in favour of modernisation in the run-up.
The smouldering trade conflict with the United States and the resulting (punitive) tariffs imposed on China and the EU as well as the blocking of the Appellate Body are only a few of the reasons for the strong wish to modernise the Organisation quickly. According to the European Commission, the unwillingness to provide information on state subsidies would distort competition as would a forced technology transfer. Therefore, the Commission proposes comprehensive monitoring measures including sanctions, which are to create transparency also with regard to implementing multilateral trade policy agreements. Even if the Commission does in particular look at China, the reaction of the other threshold countries is by no means clear: the so-called Doha Rounds, which pursued the goal to place sustainable development at the centre of the world trading system, consist of the greatest differences between the positions of the most important threshold countries and the industrial nations when it comes to market access conditions.
On 10 September, the European Parliament’s Committee on International Trade presented a Draft Report “WTO: the way forward”, which is also in favour of modernising the WTO and which voices similar demands as introduced in the Commission Concept. Hence, rapporteur Bernd Lange (S&D) also demands in the Committee meeting on 27 September to renew the rules to be able to meet the challenges of world trade in the 21st century. This includes in particular the sectors relating to electronic business, digital trade, global value chains and the economic empowerment of women. In respect of sustainable development goals, Klaus Buchner (Greens) and Helmut Scholz (GUE/NGL) want to enshrine more far-reaching demands than are to be found in the current Draft Report. All factions call for more transparency and suggest among other to strengthen the WTO Secretariat. According to them, this measure would also result in more efficient processes. The question, in which areas the negotiations have to be multilateral - hence by all WTO members - and in which areas plurilateral negotiations may also be entered into, was also the subject of many discussions.
European Commission: Concept paper
European Committee on International Trade: Draft Report on WTO: the way forward