Functioning of the WTO

Global solutions to the world’s sustainable development require a strong multilateral trading system that guarantees fairness, predictability and effectiveness. Yet, the current deadlock in the WTO negotiations, and the proliferation of preferential trade agreements, has raised questions about the ability of the WTO to deliver on these fronts prompting experts to call for a reform of the current functioning of the institution. At the heart of the matter is the need to balance three different and sometimes competing demands: greater efficiency in the conduct of negotiations; enhanced legitimacy including by better addressing public policy concerns; and greater inclusiveness, so as to overcome power asymmetries.

The debate over institutional reform – whether it is needed, in what form and via what kind of process – is not new. It has been ongoing ever since the creation of the WTO. In recent years, proposals to reform the “negotiating function” of the WTO have targeted first and foremost the notion of single undertaking, suggesting instead new approaches such as “variable geometry” or “critical mass” agreements. The move towards plurilateral agreements such as the Trade in Service Agreement (TISA) or the Environmental Goods Agreement (EGA) is symptomatic of this trend but has been criticised for its exclusive nature and for affecting trade off opportunities in the Doha Round by de facto removing certain elements from the equation. Beyond the negotiating function itself, years of near-exclusive focus on the Doha Round have inhibited institutional evolution and even diminished some of the WTO’s permanent, non-negotiating functions such as the work of the regular committees.

As a contribution to the discussions that evolve around these issues, the E15 Initiative joined forces with the World Trade Institute (WTI) to convene a group of leading experts, trade practitioners, former policy makers and private sector representatives, led by theme leader Manfred Elsig. The group’s task consisted in reviewing the functioning of the WTO in the past two decades, and its adequacy to address the challenges and opportunities in today’s global trading system. Based on this diagnosis, it examined possible alternative approaches to enhance the effectiveness of multilateral negotiations while exploring options to strengthen the monitoring and deliberative function of the WTO, as well as formal or informal mechanisms to enhance the participation of the private sector and other stakeholders.