By Emma Farge and Olivia Le Poidevin
GENEVA, Dec 17 (Reuters) – Countries are making progress on reforming the World Trade Organization (WTO) but will fall short of clinching a deal at a major meeting early next year, the ambassador leading the talks said in a confidential document.
Observers say reforms at the 30-year-old trade watchdog are urgently needed, with some believing the future of the organisation is at stake.
The WTO told Reuters it does not comment on the positions of individual members, pointing to comments made by its Director-General Ngozi Okonjo-Iweala in the Financial Times that members should use the current crisis to reform and modernise the rule book.
In particular, members accept the need to improve decision-making as the consensus rule whereby all 166 members must agree to pass new trade deals has gridlocked negotiations for years, blocking even those that enjoy near universal support.
Norway’s WTO ambassador Petter Olberg wrote in the December 12 document seen by Reuters that the range of ideas for reforming decision-making meant that the issue cannot be resolved at a ministerial meeting in March 2026. However, he said progress was being made and ministers meeting in Yaounde, Cameroon should agree on a framework to move forward.
The U.S. voiced frustration in a communication sent to members that blockages in the consensus-based system were stopping members from joining plurilateral agreements. These deals allow groups of interested members to strike deals among themselves, with an option for others to sign on later.
It warned that this threatened the organisation’s viability and could drive countries to negotiate new deals outside it.
The U.S. also called for reform discussions to address one of the WTO’s core principles – Most Favoured Nation (MFN) – which requires members to treat others equally. It said MFN was designed for an era where trade partners were expected to adopt open, market-oriented trade policies.
“That expectation was naive, and that era has passed,” it said in a statement.
“If the WTO does not reform by making tangible improvements in those areas that are central to its mission, it will continue its path toward irrelevancy,” the U.S. said in the communication.
A diplomatic source cautioned that the U.S.’ position was not widely supported by members.
“The U.S. views on WTO reform are far from those of most members and even challenge the WTO’s purpose and core principles. Simply put, without MFN, there’s no real multilateralism,” the source told Reuters.
Since U.S. President Donald Trump began imposing higher import tariffs this year on most trading partners, the share of global trade conducted under the Most-Favoured-Nation terms is down from about 80% to 72%, WTO data shows.
(Reporting by Emma Farge and Olivia Le Poidevin, editing by Ed Osmond)
Comments