WTO overhaul targets fairer trade, easier decision-making to end paralysis

Business Times

16-07-2025

[GENEVA] World Trade Organization members are seeking to break years of paralysis in international trade negotiations, which have been sidelined by the Trump administration and risk becoming irrelevant, internal WTO documents seen by Reuters.
Trump's sweeping tariffs have forced countries to line up to negotiate bilateral trade deals with Washington, bypassing the multilateral framework.
WTO members had already struggled to reach deals due to a consensus requirement among all 166 members. Preventing members from blocking decisions is now the top priority in reform talks, diplomats told Reuters.
'The sense of urgency is palpable, and there is widespread recognition that there is no viable alternative to reform,' Norway's WTO Ambassador Peter Olberg, who was appointed to facilitate the organisation's reform talks, said in an internal communication to members seen by Reuters.
The WTO's foundational Most Favoured Nation (MFN) rule requires equal treatment among members but developing countries have privileges to help them compete. These include China and India, which Trump argues are now major economies with no need for extra support.
One document showed WTO members are aiming to streamline decision-making processes, promote fairer industrial policies including subsidies, and review the privileges of developing countries.
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The proposals feed into reform consultations running through the latter part of this year that are intended to inform the next WTO ministerial conference in Cameroon in March. The latest round of consultations is taking place this week.
Among the proposals is the so-called Pareto improvement, which a senior Chinese WTO delegate in Geneva said China had put forward. This measure would require members to provide clear, evidence-based proof of harm when blocking proposals.
Other proposals include permitting members to opt out of decisions and allowing subsets of countries to advance negotiations without full consensus.
'The post-war multilateral system as we know it is dead,' Roberto Azevedo, WTO Director-General from 2013 to 2020, told Reuters, calling reform discussions a 'do or die' situation for the WTO in particular.
WTO Director-General Ngozi Okonjo-Iweala conveyed the US position to members in a restricted document viewed by Reuters, that a 'reform by doing' approach – of practical, incremental improvements in the organisation's functioning – is 'vacuous' and would fail to tackle the deeper structural issues.
The US said in its 2025 trade policy agenda that its patience is 'wearing thin' and that key issues will not be resolved until China and other major economies – implying countries like India – relinquish their privileges.
China said in June that it had heard 'every word' of the US concerns, expressing openness to discuss such privileges, as well as tariffs and industrial policy.
India's WTO mission did not respond to a request for comment.
Current reform talks do not address the dispute settlement system, which will be considered at a later date, according to one of the WTO documents.
The WTO declined to comment on this article. Olberg did not immediately reply to a request for comment. REUTERS