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December 12, 2017

WTO faces “serious challenges”, losing trade focus

United States Trade Representative Robert Lighthizer has outlined a series of "serious challenges" with regard to the World Trade Organization (WTO), including concerns the group is losing its focus on negotiation and is instead moving towards becoming a litigation-centred organisation.

By Beth Wright

United States Trade Representative Robert Lighthizer has outlined a series of “serious challenges” with regard to the World Trade Organization (WTO), including concerns the group is losing its focus on negotiation and is instead moving towards becoming a litigation-centred organisation.

In his opening statement at the WTO’s 11th ministerial meeting in Argentina this week, Lighthzer said that while the WTO is “obviously an important institution”, that “serious challenges exist”.

He warned the organisation is losing its essential focus on negotiation, with too often members seeming to believe “they can gain concessions through lawsuits they could never get at the negotiating table.” He questioned whether this is good for the institution and if the current litigation structure makes sense; a move customs and international trade law firm Sandler, Travis & Rosenberg says perhaps suggests the US will not participate in additional negotiations until its concerns on enforcement are addressed.

Lighthizer also pointed to the need to clarify the organisation’s understanding of development within the WTO. 

“We cannot sustain a situation in which new rules can only apply to the few, and that others will be given a pass in the name of self-proclaimed development status. There is something wrong, in our view, when five of the six richest countries in the world presently claim developing country status. Indeed, we should all be troubled that so many members appear to believe that they would be better off with exemptions to the rules. If in the opinion of a vast majority of members playing by current WTO rules makes it harder to achieve economic growth, then clearly serious reflection is needed.”

Lighthizer also claimed it is “impossible” to negotiate new rules when many of the current ones are not being followed, perhaps suggesting the US will not participate in additional negotiations until its concerns on enforcement are addressed, says Sandler, Travis & Rosenberg in the firm’s Trade Report, published today (12 December).

“This is why the United States is leading a discussion on the need to correct the sad performance of many Members in notifications and transparency,” Lighthizer added. “Some members are intentionally circumventing these obligations, and addressing these lapses will remain a top US priority.”

Meanwhile, the US Trade Representative said much can and should be done at the WTO to help make markets more efficient. He added the US is interested in revitalising the standing bodies to ensure they are focused on new challenges, such as chronic overcapacity and the influence of state-owned enterprises. It is also working closely with many members in committee and elsewhere to address real-world problems such as SPS barriers, Lighthizer said.

“We believe that all of us are here primarily to represent our own citizens to secure rules that will best help them,” he added. “As President Trump said in his UN speech, institutions like this function best when all sovereign nations acting in their own best interest pull together and find ways that permit us all to prosper.

“The United States looks forward to working with all members who share our goal of using the WTO to create rules that will lead to more efficient markets, more trade and greater wealth for our citizens. Such outcomes will build public support not only for open markets, but for the WTO itself.”

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