The European Commission submitted a note to the World Trade Organization (WTO) on Wednesday 22 February with proposals for reforming the organisation. It looks at three areas where it believes enhanced deliberation would be crucial.
State intervention in support of the industry
For the Commission, the current WTO rules are “not sufficient to tackle the negative effects of government intervention in the economy”. However, the WTO already imposes rules on its members in this area through the Agreement on Subsidies and Countervailing Measures (SCM).
However, the EU would like to warn that the rules-based order will be weakened and that there will be more trade conflicts if the tensions associated with these effects are not addressed. It does not cite any particular case, but the recent example of the USInflation Reduction Act (IRA) may be one example of the trade tensions mentioned.
The WTO should therefore be the place to define how far public intervention in support of industrial sectors can go, says the Commission. The aim is to identify, through the deliberations, what is missing in the current rules, but also to provide more transparency on support programmes or any other form of state intervention.
The EU believes that the 13th WTO Ministerial Conference (MC13) in February 2023 could be the right time to establish a space to conduct these discussions, which could then provide recommendations for MC14.
Environmental challenges and trade
As with subsidies, the EU would like to see more transparency and dialogue on the environmental measures taken by states that have an impact on international trade.
To this end, it proposes to strengthen the deliberation on this topic in the Committee on Trade and Environment (CTE). The aim would be for members to provide information on environmental measures affecting trade.
This could also be an opportunity to deliberate on technical methods, such as the calculation of emissions contained in marketed products.
Trade and inclusiveness
The European Commission outlines a number of avenues for greater inclusion of developing and least developed countries. The first step is to strengthen the WTO’s Committee on Trade and Development, it said.
Secondly, the WTO has to make an effort to show the inclusiveness and social dimension of trade.
Finally, the differentiated capacities of members need to be taken into account in rule-making and deliberations, and this can be done through a revision of technical assistance for effective participation in WTO activities.
The EU will present its note to the WTO General Council on 6 March.
See the note: https://aeur.eu/f/5ge (Original version in French by Léa Marchal)