Advancing WTO Reform
AS the world’s largest trader of goods and largest developing economy, China is poised to actively participate in and advance reform of the World Trade Organization (WTO) to enable the organization to better meet the needs of global economic and trade development, thus driving global economic growth.
An Urgent Task
Since its birth in 1995, the WTO has played an irreplaceable role in maintaining free and fair world trade, bolstering trade growth, and fueling emerging and developing countries’ development. According to the organization’s data, as of the end of 2017, the WTO members had filed lawsuits on 308 trade disputes, and with expert panels, they ensured that 156 cases saw the release of arbitration reports. The proportion of the lawsuits initiated by developed economies to those by the developing economies was 3:2.
Data also show the evident role of the organization in promoting trade growth. During the period of 19942017, the global trade in goods grew 3.1-fold, faster than the growth speed of the world economy at 1.9-fold. What’s noteworthy is the impressive growth of emerging and developing economies in trade with their export share of the global total rising to 47.8 percent from 27.3 percent.
Despite its positive roles, the rule-based WTO with multilateralism as its tenet is facing unprecedented challenges posed by rising unilateralism and trade protectionism in the world.
The WTO Appellate Body verges on paralyzation. The organization’s major functions include dispute settlement, trade negotiations, implementation, and monitoring. The WTO’s procedure for resolving trade disputes is often likened to a jewel in a crown since the rule-based mechanism has ensured a fair environment for trade. However, since 2017, its appeal and dispute settlement mechanism has faced the most serious crisis since its birth. Immediate correction is needed, or it will be in danger of being paralyzed.
According to the WTO rule, the Appellate Body is composed of seven members who are appointed by the Dispute Settlement Body to serve four-year terms. Each appeal is heard by three members of a permanent seven-member Appellate Body. However, thwarted by the United States, the body has not been able to start the selection of new members, leading to only three members remaining, two of which are reaching the end of their tenures in December 2019. If the situation does not turn around, the Appellate Body will inevitably face suspension.
Multilateral trade negotiations have been delayed. The WTO grew out of the General Agreement on Tariffs and Trade (GATT), which was an international body whose early members were almost all developed economies. The bulk of the WTO’s current work comes from the 1986–94 negotiations called the Uruguay Round