The EU’s vision to recast the World Trade Organisation

On 13th November, the EU Trade Commissioner Cecila Malmström delivered a speech in Washington on global common challenges with the United States in the context of investigations and safeguard measures on EU steel imports. The European Commissioner stressed the need to recast the World Trade Organization (WTO) in a changing global environment. 


Below the key points of her speech:

The crucial role of international institutions

Multilateralism is the cornerstone of a predictable and stable system to address the global challenges – i.e. technology changing the labour market, migration and climate change and emerging market, especially China.

The EU supports the creation of a new global architecture to uphold the liberal world order and International institutions play a specific role:

  • NATO stands against the threat of Russia in the Eastern Europe;
  • The United Nations aims to foster large-scale cooperation;
  • The International Monetary Fund establishes a stable financial and monetary framework;
  • The WTO is making stability for open trade, a fundamental economic freedom.

The EU’s proposal to recast the WTO

Save the “Appellate Body”, the dispute mechanism of the WTO: The EU Commissioner declared that “Without proper enforcement of the common rules, they don’t mean anything”. Compliance with WTO rules is effectively guaranteed by the Appellate Body, but the current rulebook cannot guarantee effective operation.

“For the EU, the priority is to keep the WTO effective by safeguarding the essential principles of the bidding nature of the decisions, the independence of the Appellate Body and the two-stage effective”.

Updating the body of rules in the face of emerging markets: The WTO system must be adapted to changing international trade rules in order to meet new challenges, especially those posed by the Chinese economy. China’s trade policy allows the use of unfair practices, such as massive industrial subsidies and forced technology transfers. The new regulation must therefore reflect economic realities. The creation of a new ecosystem is a prerequisite for the successful implementation of a system of balance and the US is a key partner.

“In this process the US is a key partner. We are working with the US and Japan to update the rulebook. We are trying to write some of the new rules together, around unfair practices by China. We hope that through productive engagement and working together, the US will see the benefits of the system that they built themselves”.

The EU is committed to open traders and support rule-based international trade. The WTO system is essential for the good functioning of international trade and avoiding unfair trade practices. However, rules must evolve to prevent unfair trade practices and to ensure international trade stability.

« Countries believe that open global trade is a good thing. That trade agreements can be win-win, if they are fully anchored in the multilateral system. (…) There is a lot to be gained from bilateral agreements, but much more to be lost from a failure of the multilateral system. »


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