Multilateral Trading System

The United States is one of the founding fathers and architects of the World Trade Organisation (WTO) in Geneva but also one of the most notorious critics of the multilateral trade system. It is largely responsible for the blockade of the Appellate Body of the WTO Dispute Settlement Mechanism. Why is this so? And could this change under the new U.S. President Joe Biden?

The World Trade Organization (WTO) serves as the guardian of free and rules-based word trade. Unfortunately, the multilateral organization finds itself confronted by significant challenges. The central problem is the discord among the 164 member states. This is delineated in the difficulties in finding a new Director-General. In the light of rampant protectionism, state interventions, and national go-it-alone strategies, the WTO must be reformed to give it the necessary teeth to ensure a global level playing field.

The dispute settlement mechanism of the World Trade Organisation (WTO) is in deep crisis as the United States blocks the appointment of members to the Appellate Body (AB). The EU has responded by revising its Enforcement Regulation and by creating an Interim Appellate Body with a “coalition of the willing”.

The European Union and its Member States are founding members of the World Trade Organisation (WTO). Today, the European Commission represents the entire EU in the multilateral organisation with one voice. The Commission advocates for comprehensive reform of the WTO.

The accession of the People’s Republic of China to the World Trade Organisation (WTO) in 2001 raised hopes around the world that the multilateral trading order would serve as a catalyst for far-reaching structural reforms. These hopes have largely been disappointed. Since joining the WTO, China has formally fulfilled many of its accession obligations, drastically increased its economic power and risen to become the world’s leading exporter of goods. German companies and consumers have strongly benefited from these developments.

Trade in Information and Communications Technology (ICT) products is on the rise. However, the dissemination of innovative solutions is often hampered by barriers to trade. The World Trade Organisation (WTO) achieved an important breakthrough with the conclusion of the Information Technology Agreement (ITA and ITA II). But more could be done.