Stumbling Stones in The Way of WTO Reformation

DOI: 10.20542/0131-2227-2019-63-8-13-20
V. Obolenskiy (,
Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation;
Institute of Economics, Russian Academy of Science, 32, Nakhimovskii Prosp., Moscow, 117218, Russian Federation

Abstract. The increasing number of the WTO member states expresses dissatisfaction with the results of the performance of the organization. Within the last quarter of century the legal structure of the WTO remains practically unchanged and it does not allow to regulate on the multilateral level those areas related to trade that go beyond the formally established competence of the organization. The main reasons for the WTO’s weak response to the challenges of the time lie in the preservation of the order of its decision-making by consensus despite of a fundamental change in the balance of power in the world trade and the organization itself in favor of developing countries. The greatest complaints regarding the current activities of the WTO are caused by the functioning of its dispute resolution mechanism including the Appellate body, the insufficient level of transparency of the member countries’ trade policies, the fulfillment of their obligations to notify trade-related regulatory measures, the use of “unfair” trade practices. In the light of these claims, individual countries have worked out initial proposals for WTO reformation that could serve as a starting point for further substantive discussions. It has also become clear that the WTO is no more coping with its basic negotiating function. To date, agreement has been reached on only one item of the extensive program of negotiations of the Doha Round, which already lasts for eighteen years. In this situation, the WTO is moving away from the enough successful negotiation practices of the GATT. It came to the understanding of the inevitability of shifting the focus from the adoption of binding multilateral agreements for all members to the preparation of agreements with a limited number of participants interested in liberalization in a particular direction of trade. As a result of the change in the approach to the negotiation process, the system of regulation of international trade will acquire a three-layer configuration more and more. Its foundation will remain the multilateral agreements of the Uruguay Round of the GATT; the second layer will be open for accession new multilateral agreements of the WTO. The third layer will be formed by the bilateral and multilateral RTAs, the regulatory rules of which go beyond the formal competence of the WTO. A destructive position towards the WTO is taken by the United States, whose actions cannot be regarded as anything other than the desire to dismantle the multilateral trading system and to return to the regulation of foreign economic relations on a bilateral basis, as it was before the creation of the GATT in 1947. It is obvious that the continuation of the current trade policy by the United States will complicate the harmonization of the measures that are so much needed for reformation of the WTO.

Keywords: international trade, balance of power, WTO, principle of decision-making, dispute resolution, transparency of trade policy, “unfair” trade practices, negotiation agenda, United States


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For citation:
Obolenskiy V. Stumbling Stones in The Way of WTO Reformation . World Eonomy and International Relations, 2019, vol. 63, no. 8, pp. 13-20.

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