International economic governance has been reversed two decades to a level where national strength, not rules, underpins trade ties, claimed a recently released proposal on reforming the World Trade Organization (WTO) by the European Commission.
The WTO is challenged in terms of international trade rules setting and the multilateral dispute-solving mechanism, and that is because the organization has failed to keep pace with the changing world, the proposal said.
The EU proposal focuses on three fields – updating international trade rules, strengthening the supervisory role of the WTO and improving the dispute-solving mechanism, Zhao Ke, associate researcher at the Institute for International Strategic Studies of the Central Party School, wrote in The Beijing News.
He noted that the proposal also somewhat represents the stance of Japan and the US on certain issues, because its spirit chimes with the four joint statements from the ministerial trade talks between them since last December. It, for example, targets so-called market distorting behavior, like industrial subsidies.
The reason for Europe to take the leading step is that the European economy has integrated into the global value chain. Compared with the US, the EU relies more on the multilateral trade system represented by the WTO, Zhao noted.
According to Zhao, the bloc might become the biggest winner of the reform.
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