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Dispute Settlement, Trade Negotiations, Transparency Among Focuses of WTO Reform Effort

Monday, October 29, 2018
Sandler, Travis & Rosenberg Trade Report

Stating that the current situation at the World Trade Organization “is no longer sustainable,” 13 WTO members have identified a functioning dispute settlement system, a reinvigorated negotiating function, and more transparency into members’ trade policies as the three areas they intend to focus on as part of an emerging WTO reform effort. In a joint communique issued at the end of an Oct. 24-25 meeting in Ottawa, these members expressed a “common resolve for rapid and concerted action” on these issues and said they will meet again in January to review progress. The U.S. and China are not currently included in this discussion group.

The countries said the rules-based multilateral trading system embodied by the WTO has helped foster “an unparalleled chapter in global prosperity, growth, and job creation around the world.” However, they added, this system now faces “unprecedented challenges,” including a rise in protectionism, growing trade tensions linked to major shifts in the global trading landscape, and difficulties in concluding negotiations. To address these concerns and restore confidence in the WTO, the members identified three issues requiring “urgent consideration.”

Dispute settlement – unblocking the appointment of Appellate Body members and discussing ways to improve the functioning of the dispute settlement system while preserving its essential features

Negotiation – concluding negotiations on fisheries subsidies in 2019, updating WTO rules to reflect 21st century realities (which may require flexible and open negotiating approaches toward multilateral outcomes), addressing market distortions caused by subsidies and other instruments, and exploring how to best pursue development (including special and differential treatment) in rulemaking efforts

Transparency – strengthening the monitoring and transparency of members’ trade policies, including by improving members’ compliance with their notification obligations

The communique states that these objectives “will only be reached through sustained and meaningful political engagement and through dialogue with all WTO members.” The 13 participants therefore offered a political commitment to “moving forward urgently” on these issues, including by working “constructively and collaboratively” with other WTO members who have offered their own proposals. The European Union noted that the meeting’s outcome “broadly supports” the proposals it made in a September concept paper.

House Ways and Means Committee Chairman Kevin Brady, R-Texas, said he supports the goals outlined above and offered specific outcomes he would like to see achieved. These include “meaningful consequences” for WTO members that do not timely submit notifications of compliance with their obligations, “procedural fixes” to prevent the Appellate Body from diverging from established timelines and procedures, and structural reforms “to avoid troubling Appellate Body overreach and ‘gap-filling’ that go beyond its mandate.”

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