5.3 Recommendations
5.3.5 WTO reforms
The challenges facing the WTO are deeply interconnected. The challenges that are being faced pertain to: the consensus decision-making rule; the panels; the AB; the General Council; the DG; the Ministerial Conferences; and the WTO members. This requires the reform of the whole WTO system. The negotiators need to go back to the drawing board in order to innovate a system that is up to date because the current rules were negotiated more than 27 years ago. These rules are outdated with the current reality of: the modern- day economy; trade; politics; globalisation; environmental- and human rights concerns;
information, communication and technology; and the emergence of new trade concerns (such as intellectual property rights).
The US argument is that the AB had strayed from its mandate. This crisis, according to the US, would accelerate the much-needed reforms, given that the rules remain unchanged since 1995 because this needs the consensus of all 164 WTO members, which has been lacking.
The WTO was not made to cope with state-led economies, like China that joined in 2001.
When China joined the WTO, it ushered in a new era for global trade, as the US and other WTO members thought that China would become a more open economy. However, to date, that has never happened.
The US has been complaining that there is a lack of rules for cyber intrusion and technology transfers towards China's persistent subsidising of its state-owned companies that gives it an unfair advantage according to the US. With the AB "dead", trade disputes could lead to trade wars, especially between the US and China. This could deter global trade and investments.
70
Even though China says that it supports the AB, it has shown very little appetite for reforming its economic practices. As a result, the US says the existing system is unable to tame China and constrains the US's efforts to fight back.224
This calls for an overhaul of the entire WTO system, and not just its DSS. The WTO DSS can be improved and the current AB crisis will perhaps encourage the members to make the changes that have long been needed.
224 Grozoubinski 2020 https://www.lowyinstitute.org/publications/world-trade-organization-optimistic-pre- mortem-hopes-resurrection 3.
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