EU Commission releases a concept paper on WTO reform with suggestions on digital commerce and technology transfer
The European Commission released a concept paper on the modernisation of the World Trade Organization (WTO), with the aim of ensuring that the development of the international trade system happens ‘in sync with current economic, political and technological changes’. The release comes a few days after the delivery of Commission President Jean-Claude Juncker’s final State of the European Union Speech, in which he highlighted the need to tackle threats to multilateralism and engage in the reform of the WTO. The suggestions in the paper were clustered in three areas: 1) updating the rule book on international trade to capture today’s global economy; 2) strengthening the monitoring role of the WTO; 3) overcoming the imminent deadlock on the WTO dispute settlement system. Under the first area, the proposal advocates for the adoption of measures focused on rebalancing the trade system, such as curbing market-distorting government support and the distortive effects of state-owned enterprises. It also calls attention to market access barriers to services and investments, which would include the discriminatory treatment of foreign investors, forced technology transfer and barriers to digital trade, for example. The paper proposes a new approach to flexibilities granted in the context of development objectives. It advocates for a review of the current distinction between developed and developing countries, which “no longer reflects the reality of the rapid economic growth in some developing countries”. According to the proposal, blanket flexibilities to developing countries should be substituted by a nuanced approach that would introduce mechanisms of ‘graduation’ when certain flexibilities are no longer needed. Moreover, Special and Differential Treatment (SDT) should become targeted, needs-driven and evidence-based. Among the proposals to strengthen the procedural aspects of the WTO’s rulemaking activities, the paper suggests that plurilateral agreements should be encouraged in areas where multilateral consensus is unattainable. The EU’s approach to the WTO reform will be presented to EU partners in Geneva on 20 September during a meeting on that subject convened by Canada.