The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations.
At its heart are the WTO agreements, negotiated and signed by the bulk of the world's trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.
It is an organization for trade opening. It is a forum for 164 governments to meet and negotiate trade agreements. It is a place for them to settle trade disputes. It operates a system of trade rules.
The WTO is run by its member governments, so all major decisions are made by the membership as a whole.
Amid growing trade tensions between the US and China, criticism of the global trading system is also increasing. The World Trade Organization oversees the international trading commitments and has been hit with negative comments by the US government over what it calls “unfair practices.”
So, European and Chinese officials met in Beijing to discuss reforming the WTO. Both sides have been hit with US tariffs as the US turns more toward protectionism and away from globalization.
Keith Rockwell, the spokesman for the WTO, stated that the organization provides a key foundation for the global economy that permits the stable and predictable flow of goods and services across borders.
Regarding the issue of the tariff dispute, especially between China and the United States, the WTO has played as an important role in this situation. Keith Rockwell said that the WTO is broader than two members.
Nowadays, other players are all involved in the trade tension. “We've been involved in a number of ways, all of our committees are looking very closely at these issues,” said Keith. These things are related to intellectual property, dispute settlement reform, the use of national security exemptions.
Recently, Chinese and European officials met to discuss the reform of the World Trade Organization. China is trying to keep the WTO functioning just as it has been and maintaining the multilateral system.
A sign of the World Trade Organization (WTO) is seen at the organization headquarters in Geneva on April 12, 2018./ VCG Photo
From China's perspective, the country wants three things in the reform process. The first one is that the core value of free trade must be upheld. The second one is that the interests of developing countries should be respected and the third one is consensus through cooperation.
John Gong, the professor of economics at the University of International Business and Economics in Beijing, said that considering whether China is still a developing country has been controversial, but China officially stated that it is still one based on their current situation.
So it is important to benefit through rules and regulations to reflect reality. The obligations to the WTO should be different between developing and developed countries.
Uri Dadush, a non-resident scholar at Bruegel, stated that Europe is the world's largest trading bloc, and that all of the trade it represents is about a third of world trade.
On reforming the WTO, Europe is extremely concerned about the viability of the global body. Europe has concerns similar to those of the United States with respect to subsidies and state-owned enterprises in China.
A logo is pictured outside the World Trade Organization (WTO) headquarters in Geneva, Switzerland, October 2, 2018./ VCG Photo
Regarding the ability of the WTO to settle disputes between China and the United States, Uri pointed out that the WTO is an organization where members live and rules have been established by each member.
“It is really difficult to obligate members to follow the rules,” said Uri. “The WTO is in an extremely difficult situation” because the WTO's disciplines are challenged by its most important member (the United States).
When asked about which countries are the most vulnerable if the functioning of the WTO is ineffective, Uri responds that there are over 160 countries in the WTO. A very large number of them are developing countries, so trade relations will be determined by power.
In this context, developing countries are on the weaker side, excluding China. “Small countries which do not have many bilateral agreements or regional agreements will be extremely vulnerable to the law of the jungle,” said Uri.
The Heat with Anand Naidoo is a 30-minute political talk show on CGTN. It airs weekdays at 7:00 a.m. BJT and 7:00 p.m. Eastern in the United States.
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