Rare unanimity on this issue is expressed by both Eastern and Western hemisphere countries, along with WTO officials. The initiative to revise the rules of its functioning is likely to be launched in March at the WTO summit in Cameroon. EU trade ministers intend to push for reform of the basic trade rules of the World Trade Organization (WTO).
Both the U.S. and the EU are now questioning the viability of the most-favored-nation principle, which requires equal treatment in trade relations between countries. Russia also advocates a reset of negotiations on the development of the organization. According to German Chancellor Friedrich Merz, the WTO is no longer functioning and cannot fulfill its tasks.
The WTO has long been in need of change
According to WTO chief Ngozi Okonjo-Iweala of Nigeria, the world is experiencing the biggest breach of global trade rules in the last 80 years. What is needed is a new system of trade policy rules and partnerships, as well as reforms in the way trade is regulated.
Specifically, at the WTO summit in Cameroon in March, the bloc intends to push for reforms to the WTO’s most-favored-nation principle (MFN), a demand also being made by the U.S. administration.
Discussions will focus on dispute settlement mechanisms, the creation of favorable treatment regimes, a system of trade policy rules and trade regulation methods.
Earlier, EU Trade Commissioner Maroš Šefčovič stated that “access to lower tariffs cannot be unconditional: it must be earned by stronger and more credible commitments to the basic principles of free and fair trade.”
World trade without rules
Over the past year, the EU has been sandwiched between China and the United States, with Beijing and Washington using various non-tariff and tariff barriers as leverage to reform their trade with Europe.
Brussels has been embroiled in a multisectoral trade dispute with China for several years over what it claims are Beijing’s subsidies and overproduction in the electric vehicle and metals industries, as well as discrimination in rare earth element exports and in the government procurement sector.
Both the U.S. and the EU are now questioning the viability of the most-favored-nation principle, which requires equal treatment in trade relations between countries.
The EU is rethinking its approach to trade policy, questioning the absoluteness of this principle for the sake of protecting its competitiveness. Growing imports and the actions of competitors (US, China) are forcing Europe to consider protectionist measures such as general duties or selective agreements, which contradicts the equality of trade terms under the WTO mold.
