The 164 members of the World Trade Organization (WTO) must engage in a constructive dialogue to modernize the Organization and increase its relevance, participants at a conference held on 16 November in Paris stressed.
Bruno Le Maire, French Minister of Economy, warned against the risk of a new cold war, this time a trade war between China and the United States. Because it is indeed the new global balance, where “China has quickly become a very unique ‘Far East’ - with its own rules and behaviours”, added Mr. Le Maire.
To emerge from the Cold War, it is first necessary to avoid retaliation, which could lead to an “open and hot trade war". “It would be an economic suicide for everyone”, he continued. "The right answer? It is the “new multilateralism”, thanks to the modernization of the WTO, by integrating issues such as the fight against global warming or the digital challenge, according to Le Maire.
But this modernisation, called for by Le Maire and embodied in a proposal from the European Commission (see EUROPE 12098), is not unanimously supported by all WTO members.
Roberto Azevêdo, Director General of the WTO, cautiously noted the split between modernising countries, which wish to adapt the WTO to the new century (see EUROPE 12125), and conservatives who prefer to focus on completing the work in progress. And to concede: “Currently, I must say, there is no common point of view on how to move forward with these issues”.
However, Azevêdo acknowledges the systemic risk posed by the Chinese model, and the need to reform the WTO to adapt it to its members’ diverse economic models - which is not reflected in the rules of the Organization, founded in 1995. "The trading system must not allow these anti-competitive practices to continue without corrective action”, he said. "There is no doubt that the emphasis on reform makes sense”.
Trade Commissioner Cecilia Malmström called for constructive cooperation between WTO members, arguing that discussions were blocked by a few members “who are taking advantage of the situation”. “If this does not happen in a fair and legal way within the system, the United States will level the playing field outside the system”, the Swedish Commissioner added.
Mrs Malmström also stressed the inevitable role that China will have to play in this exercise, particularly on the issues of horizontal subsidies and forced technology transfers. For the Commissioner, the time has come to put our money where our mouth is: “Starting negotiations on the key areas of horizontal subsidies and t Appellate Body is the test of WTO modernisation".
The speakers agreed to meet, to make progress on these issues, in Buenos Aires in two weeks' time, during the G20 meeting. (Original version in French by Hermine Donceel)