The future of the WTO: addressing institutional challenges in the new millennium

In the light of recent setbacks of the WTO, particularly in Seattle and Cancun, this report looks at the state of the organisation in order to study and clarify institutional challenges and to consider how the organisation can be reinforced to meet these challenges in the future. The report also revisits fundamental principles of the trading system which in the view of the authors have been greatly misinterpreted or misunderstood. Altogether the report intends to give a broad view of the current challenges to the WTO that goes beyond the failures of the Doha round.

The report offers a number of principal observations and recommendations. They include:

• the process of globalisation as well as the role played by the WTO is widely misunderstood and wrongly interpreted – many constituencies neither understand its benefits nor its limitations
• the current spread of preferential trade agreements should be cause for concern
• effective reduction of MFN tariffs and non-tariff measures in multilateral trade negotiations should be aimed at: a commitment by developed WTO members to establish a date by which all tariffs will move to zero should be considered seriously
• perceived loss of sovereignty should not be cause for concern
• creation and interpretation of WTO rules should be for WTO members alone, and observer status should only be granted on the basis of potential contribution to the WTO
• international development agencies, in particular the World Bank, should improve programmes to fund trade policy related adjustment assistance for developing countries
• achieving coherence in global economic policy making should be a priority
• WTO members should develop a set of clear objectives for the WTO’s relations with civil society, yet the Secretariat is not obliged to engage with groups that seriously aim at undermining or destroying the WTO
• special effort should be made to assist local civil society organisations dealing with trade issues in least-developed countries, particularly in Africa
• more resources are needed to properly engage civil society
• the Dispute Settlement Body should occasionally select particular findings for in depth analysis by a reasonably impartial expert group
• the General Council should adopt a Declaration that a Member blocking a measure which otherwise has broad consensus should declare in writing that the measure is of vital national interest
• there should be a strengthened management culture in the Secretariat.