Alan Wm. Wolff

The role of plurilaterals in the WTO’s future

· November 17, 2021 · 12th Ministerial Conference, Joint Statement Initiatives and Joint Declaration · , , , , , , , , , , , , · No Comments

As the WTO is less than two weeks from the start of its 12th Ministerial Conference, an important question for the WTO Membership is whether or not the WTO will incorporate results from plurilaterals started at and after the 11th Ministerial (the so-called Joint Statement Initiatives) into the WTO or will rather limit the role of plurilaterals and effectively further reduce the relevance of the WTO going forward.

As reviewed in prior posts, India and South Africa have challenged the role of plurilaterals where WTO requirements are not followed to make it part of the WTO acquis. See, e.g., February 20, 2021:  Will India and South Africa (and others) prevent future relevance of the WTO?, https://currentthoughtsontrade.com/2021/02/20/will-india-and-south-africa-and-others-prevent-future-relevance-of-the-wto/. The paper from India and South Africa, THE LEGAL STATUS OF ‘JOINT STATEMENT INITIATIVES’ AND THEIR NEGOTIATED OUTCOMES, 19 February 2021, WT/GC/W/819 and one revision (WT/GC/W/819/Rev.1) was the subject of discussions at the March 1-2 and 4, 2021 General Council meeting and has been raised in subsequent General Council meetings as well. See GENERAL COUNCIL, MINUTES OF MEETING HELD IN VIRTUAL FORMAT ON 1-2 AND 4 MARCH 2021, WT/GC/M/190 (23 April 2021), pages 65-78; GENERAL COUNCIL, 7-8 October 2021 PROPOSED AGENDA, WT/GC/W/828 (5 October 2021), agenda item 11 (PAPER TITLED “THE LEGAL STATUS OF ‘JOINT STATEMENT INITIATIVES’ AND THEIR NEGOTIATED OUTCOMES” BY INDIA, SOUTH AFRICA AND NAMIBIA (WT/GC/W/819/REV.1)). Neither India nor South Africa are participating in any of the Joint Statement Initiatives (“JSIs”) at the present time.

Below are some excerpts from the March 2021 General Council meeting which lays out the views of a few of the WTO Members on the topic. The excerpts start with the views of India and South Africa as the sponsors of the paper and then follows with the reaction of a number of Members who support the JSI process. Many more Members expressed views. The controversy basically revolves around whether WTO Members will pursue initiatives among those with an interest with all Members being able to monitor, participate and join when desired or be limited by a system which has proven largely unable to address new issues in a timely manner.

India (pages 65-67 of WT/GC/M/190)

“10.2. The representative of India recalled that India and South Africa had submitted the paper in document WT/GC/W/819 dated 19 February 2021 on the “The Legal Status of ‘Joint Statement Initiatives’ and their Negotiated Outcomes”. As a co-sponsor, India was not questioning the right of Members to meet and discuss any issue. However, when such discussions turned into negotiations
and their outcomes were to be brought into the WTO, the fundamental rules of the WTO should be followed. The WTO had been established as a forum concerning multilateral trade relations in matters dealt with under the agreements in the Annexes to the Marrakesh Agreement and for further negotiations among its Members concerning their multilateral trade relations and to provide a framework for the implementation of results of such negotiations.

“10.3. The Marrakesh Agreement defined ‘Plurilateral Agreements’ as the agreements and associated legal instruments that were included in Annex 4 to the Agreement. The Ministerial Conference, upon the request of the Members party to a trade agreement, decided exclusively by consensus to add that agreement to the said Annex 4. Procedures for amending rules were enshrined in Article X of the Marrakesh Agreement. On the other hand, the GATT and GATS contained specific provisions for modifications of Schedules containing specific commitments of Members.

“10.4. Amendments or additions to the rules were governed by multilateral consensus based decision-making or voting – right from the outset when a new proposal for an amendment was made. On the other hand, negotiations on modifications or improvements to Schedules could arise either as the outcomes of consensual multilateral negotiations pursuant to Article XXVIII of GATT or Article XXI of GATS or be reached through a bilateral request and offer process or as a result of a dispute. In fact, even changes to Schedules could not be made unilaterally as other Members had the right to protect the existing balance of rights and obligations.

“10.5. The GATS read in concert with the Marrakesh Agreement provided for different rules and procedures for amendment of rules and modification of schedules. While the GATS rules were governed by the GATS Part II, “General Obligations and Disciplines”, Part III of the GATS contained provisions concerning Members individual “Specific Commitments” pertaining to distinctly identified services sectors which were inscribed in Members’ Schedules. In case of conflict in interpretation, Article XVI.3 of the Marrakesh Agreement provided that in the event of a conflict between a provision of the Marrakesh Agreement and a provision of any of the Multilateral Trade Agreements, the provisions of the Marrakesh Agreement should prevail.

“10.6. Each of the JSIs was likely to pose different legal challenges to the existing WTO rules and mandates given the differences in the nature and scope of issues covered under each of those initiatives. However, any attempt to bring in the negotiated outcomes of the JSIs into the WTO by appending them to Members’ Schedules, even on MFN basis, following modification of Schedules
procedures, bypassing multilateral consensus would be contrary to the provisions of the Marrakesh Agreement.”10.7. Any attempt to introduce new rules, resulting from JSI negotiations, into the WTO without fulfilling the requirements of Articles IX and X of the Marrakesh Agreement would be detrimental to the functioning of the rules-based multilateral trading system. Among others, it would erode the integrity of the rules-based multilateral trading system, create a precedent for any group of Members to bring any issue into the WTO without the required mandate. bypass the collective oversight of Members for bringing in any new rules or amendments to existing rules in the WTO, usurp limited WTO resources available for multilateral negotiations, result in Members disregarding existing multilateral mandates arrived at through consensus in favour of matters without multilateral mandates, lead to the marginalization or exclusion of issues which were difficult but which remained critical for the multilateral trading system such as agriculture and development thereby undermining balance in agenda setting, negotiating processes and outcomes and fragment the multilateral trading system and undermine the multilateral character of the WTO.

“10.8. The document listed various options to move ahead. As per the provisions of the Marrakesh Agreement, for bringing in their negotiated outcomes in the WTO, the JSI Members could seek consensus among the whole WTO Membership, followed by acceptance by the required proportion of Members according to Article X of the Marrakesh Agreement. Alternatively, they could get the new agreements included in Annex 4 following Article X.9 of the Marrakesh Agreement. They also had option to pursue agreements outside the WTO Framework, as had been envisaged in the Trade in Services Agreement (TISA) or as had been done in multiple bilateral or plurilateral FTAs or RTAs. The proponents of a “flexible multilateral trading system” could even seek amendment to Article X of the Marrakesh Agreement following procedures enshrined therein to provide for such an approach.

“10.9. Through the paper WT/GC/W/819, India and South Africa reiterated that basic fundamental principles and rules of the rules-based multilateral trading system as enshrined in the Marrakesh Agreement should be followed by all Members including the participants of various JSIs. Negating the decisions of past Ministerial Conferences by decisions taken by a group of Ministers on the sidelines of a Ministerial Conference or the side-lines of any other event would be detrimental to the existence of the rules-based multilateral trading system under the WTO.”

South Africa (pages 67-68 of WT/GC/M/190)

“10.10. The representative of South Africa said that the WTO had been established as a forum concerning multilateral trade relations. South Africa’s interest in submitting the paper was to remind Members of the legal architecture that governed the functioning of the WTO which was critical to preserve its multilateral character. The pandemic was a sharp reminder of the importance of global cooperation in dealing with global challenges. The challenges facing humanity were not limited to
the pandemic but included rising inequality both within and between countries, poverty and food insecurity, among others. Those necessitated that Members avoided measures that undermined or fragmented the trading system.

“10.11. Any group of Members could discuss any issue informally. However, when discussions turned into negotiations, and their outcomes were sought to be formalized into the WTO framework, it could only be done in accordance with the rules of procedure for amendments as well as decision-making as set out in the Marrakesh Agreement. The plurilaterals were provided for in the Marrakesh Agreement and were included in Annex 4 to the Agreement – and there were specific rules to be followed to integrate those into the WTO framework. It was however important to note that the Ministerial Conference, upon the request of the Members party to a trade agreement, decided exclusively by consensus to add that agreement to the said Annex 4.

“10.12. The provisions in the Marrakesh Agreement had been carefully negotiated and were a result of the experience acquired in the GATT which had been characterized especially after the Tokyo Round by agreement on a number of plurilateral codes. There had been recognition that those plurilateral codes had created a fragmented system of rules. In respect of some Contracting Parties,
the GATT rules had been applicable, while in respect of the rest, both the GATT rules and the rules of plurilateral codes had been applicable. That created considerable complexity in determining what obligations had been applicable in respect of which Contracting Party.

“10.13. The Preamble to the Marrakesh Agreement clearly articulated Members’ vision for the WTO and it was to develop an integrated, more viable and durable multilateral trading system. Article II.1 stated that “The WTO shall provide the common institutional framework for the conduct of trade relations among its Members.” Article III.2 stated that “The WTO shall provide the forum for negotiations among its Members concerning their multilateral trade relations”. It provided for consensus-based decision-making as enshrined in Articles III.2, IX, X and also X.9 as well as procedures for the amendments of rules as articulated in Article X.

“10.14. The Marrakesh Agreement did not make provision for the so-called open plurilaterals and flexible multilateralism. Therefore, any suggestion that when offered on MFN basis, no consensus was required for bringing new rules into the WTO was legally inconsistent with the fundamental principles and procedures of the Marrakesh Agreement. Importantly, new rules could not be brought into the WTO through amendment of Members’ Schedules. It had also been suggested that the Telecommunications Reference Paper justified why the consensus principle could be bypassed. However, as part of the package of the Uruguay Round outcome, there had been a multilateral consensus and a formal mandate for the negotiations, including agreement on inscribing outcomes into Schedules without an amendment procedure.

“10.15. There were systemic and developmental implications inherent in plurilaterals especially if they attempted to subvert established rules and foundational principles of the Marrakesh Agreement. They risked eroding the integrity of the rules-based multilateral trading system, creating a precedent for any group of Members to bring any issue into the WTO without the required consensus, including disregard of existing multilateral mandates, marginalizing issues which were difficult but yet critical
for the multilateral trading system such as agriculture and development thereby undermining balance in agenda setting, negotiating processes and outcomes, fragmenting the system and undermining the multilateral character of the WTO which Members had sought to resolve by creating the WTO following the GATT experience.

“10.16. The legal framework of the WTO provided clear options for Members who were part of JSIs as outlined in the paper. South Africa was therefore calling on Members to respect the rules which continued to underpin the functioning of the WTO.

Australia (page 69 of WT/GC/M/190)

“10.24. The representative of Australia noted Members’ commitment to improving the effectiveness of the WTO’s rulemaking function. Australia was a participant in all the current JSI negotiations under way and strongly supported that important work at the WTO. Plurilateral initiatives were neither novel nor revolutionary in the multilateral trading system. They had always been a part of the WTO architecture had constituted the predominant form of rulemaking in the multilateral trading system for decades. WTO-consistent plurilateral trade agreements with wide participation played an important role in complementing global liberalization efforts. The current JSIs had the potential to deliver vital outcomes that strengthened the WTO’s rulemaking function and its health more generally. More than 110 Members were participating in one or more of the current JSI negotiations – demonstrating the wide acknowledgement from across the Membership that that was a legitimate and useful form of rulemaking. They had and continued to be inclusive, open and transparent.

“10.25. Australia did not agree with the legal analysis in India and South Africa’s paper. For instance, the suggestion that Members could not improve their GATT or GATS Schedules without consensus agreement was not accurate. Members could always incorporate improvements to their Schedules whether unilaterally or as a group of Members. That was the legal architecture which participants had agreed to use in the services domestic regulation JSI. Australia had full confidence in the WTO consistency of that approach. In the case of the e-commerce JSI, its participants were still exploring the legal structure options they could best use to incorporate eventual outcomes into the WTO legal framework but were confident that those pathways could be found. Australia encouraged all Members to participate in or at least keep an open mind on those plurilateral discussions to pursue
outcomes that modernized and enhanced WTO rules for the whole Membership.”

Costa Rica (pages 69-70 of WT/GC/M/190)

“10.26. The representative of Costa Rica was focused on ensuring that the WTO operated within the legal framework agreed by the Members. Costa Rica would reject any attempt to force Members to abide by new obligations without their consent. Costa Rica was a participant in the Joint Statement Initiatives on Electronic Commerce, Investment Facilitation for Development, MSMEs and Services Domestic Regulation. The reason for that was simple. Costa Rica was recognizing the need to adapt to the trade policy challenges of the 21st century. But that did not mean that any Member who chose to remain outside those discussions would be forced to adhere to any new obligations.

“10.27. Costa Rica focused its remarks that day on the negotiations on services domestic regulation as that was the initiative that it had the pleasure of coordinating. Those negotiations and the outcome they would produce were firmly within the rules of the WTO. 59 proponents of services domestic regulation had established the initiative at the end of 2017 after they had to accept with
great regret that no further progress had been possible in the Working Party on Domestic Regulation. Each and every proposal submitted had been rejected in its entirety by South Africa and other Members. Proponents of domestic regulation had no choice but to accept that position.

“10.28. Since that time, work on the subject had so far advanced in the Joint Statement Initiative on Services Domestic Regulation. To the extent that participants considered it to be a viable prospect for an outcome to be delivered that year, Costa Rica clarified that the outcome would consist of a set of disciplines on licensing, qualification and standards which would bind only participating
Members but would benefit services suppliers from all Members who traded with the participating Members which currently represented more than 70% of world services trade.

“10.29. The outcome that was envisaged would be incorporated into participating Members’ GATS schedules of specific commitments. In substance, it covered precisely those types of measures that were listed in the GATS as areas for additional commitments, namely, qualification standards and licensing matters That was important because the paper introduced by India and South Africa suggested that the disciplines developed by the initiative constituted some form of not further specified rules which did not fit under the architecture of services schedules. That was quite untrue. Rather, the disciplines constituted improvements of participating Members’ existing commitments.

“10.30. Participating Members would give legal effect to the outcome by inscribing the disciplines as additional commitments in the respective GATS schedules. That would not be done by seeking to add a new agreement to the WTO architecture but by applying well established multilateral WTO procedures to improve Members’ schedules of specific commitments. Concerns about the work of the JSI had been raised already at the end of 2019. At that time, India had argued that some of the disciplines could be of a GATS minus nature and the GATS Article VI.4 mandate could be affected by the work of the initiative. As the Coordinator of the initiative, Costa Rica had had the pleasure of discussing those concerns with India in more detail and to report back to the group. While participants in the initiative did not agree that the disciplines in question could be understood to undercut existing GATS obligations, they agreed wholeheartedly with India that the disciplines should not be understood to weaken any provision contained in the GATS.

“10.31. Indeed, participants had recently incorporated in the negotiating text language expressing clearly that the disciplines should not be constructed to diminish any obligations under the GATS. The GATS Article VI.4 mandate to develop any necessary domestic regulation disciplines was not, would not and could not be affected by the fact that Members participating in the JSI would undertake additional commitments on domestic regulation. Costa Rica was therefore disappointed to see that India currently appeared to question the right of any WTO Member to improve its services commitments. The JSI on Services Domestic Regulation remained open and transparent and all Members were welcome to join the meetings and to constructively engage ensuring that the outcome benefited service suppliers across the world and included as many Members as possible.”

Chinese Taipei (page 70 of WT/GC/M/190)

“10.32. The representative of Chinese Taipei noted that the plurilateral approach had contributed to global trade in the past. The ITA was an example. Certain limited use of the plurilateral approach could support and supplement the multilateral trading system by facilitating international trade. The discussions under JSIs had given the WTO new momentum which was necessary and healthy for the multilateral system. It was an unavoidable trend that more and more trade issues were emerging that urgently needed Members to establish new disciplines for them. It was highly important to update WTO rules and to make the WTO a living organization and not be left behind by the world.

“10.33. Through Joint Statement Initiatives, Members had developed a creative way to address the trend so that the WTO’s legislative function could be improved for it to maintain its relevancy given new developments in the world – with Members still maintaining the flexibility not to opt in. Chinese Taipei called on Members to jointly think about how plurilateral agreements could be integrated into the multilateral trading system while considering Members’ needs for their respective development stages and maintaining the existing rights and obligations of non-participating Members.”

Colombia (page 70 of WT/GC/M/190)

“10.34. The representative of Colombia believed that that was an important discussion for the future of the organization as those initiatives covered the interests of many Members to move forward on crucial issues in global trade relations. Colombia appreciated the interest the Director-General had expressed on JSIs. That was a necessary step for the strengthening of the WTO. Colombia was happy to see how the path that had begun with previous processes such as the ITA was currently joined by many Members who were involved in the JSIs – an important space to resolve pending priorities.

“10.35. Such perspective had led Colombia to actively and formally participate in the JSIs on ecommerce, investment facilitation for development, services domestic regulation, MSMEs and trade and gender. Colombia also expressed its interest in other nascent initiatives which would likewise have an important impact on the WTO’s future as a driver of development for Members. With regard to the document being reviewed that day, Colombia did not share the legal analysis that the paper had set out but remained ready to continue that discussion in the appropriate forum. Colombia reiterated its commitment to the JSIs and its support for any work that could be done in that area.”

Mexico (page 70 of WT/GC/M/190)

“10.36. The representative of Mexico said that JSIs provided an excellent opportunity to furnish the WTO with tools that would allow it to face the current challenges in global trade. Members were in a situation where some of them believed that they were still not in a position to fully integrate themselves into the work under way. The JSI participants had never foreclosed the possibility for more Members to join those initiatives when they deemed it appropriate to do so nor did those initiatives diminish the rights and obligations of non-participating Members. Rather, the JSIs offered a possibility to move forward and help the WTO become more relevant by promoting trade as a vehicle for development. Mexico had been a strong proponent of the JSIs as the work had taken place openly, inclusively and transparently with voluntary participation at its core.”

Russian Federation (page 71 of WT/GC/M/190)

“10.37. The representative of the Russian Federation found the paper by India and South Africa upsetting. There was no doubt that Members should respect the right of any of them to express its attitude towards current developments within the multilateral legal system and to point out issues which it could see as contradictory to the system’s rules. The paper was however not about that but
dealt with the issue of whether the WTO should move forward and regain its relevancy amid the changing global economic environment or should it be further bogged down by disagreements among Members and lack of consensus eventually turning into an archaic and useless institution.

“10.38. The multilateral outcomes at MC11 had clearly been quite poor. The decision to promote and accelerate fisheries subsidies negotiations – the only multilateral and negotiation-related result achieved in Buenos Aires – was evidently not enough to chart a way forward for the WTO. The JSIs in which Russia was proud to participate in had been considered globally as a signal of Members’ ability and readiness to explore possible formats to move ahead. The progress achieved in all JSIs since then demonstrated the effectiveness of that approach. For example, the JSI on Services Domestic Regulation was an attempt to deliver on a long standing commitment of all Members to develop the respective disciplines as set out in GATS Article VI.4.

“10.39. As for the incorporation of new plurilateral initiatives into the WTO Agreements, Russia agreed with suggestion of India and South Africa that it should be done in accordance with the relevant provisions of the Marrakesh Agreement. However, the final goal of the JSIs was not to create a set of isolated rules among like-minded Members but rather to update the multilateral legal
system as a whole. That was why the JSIs remained open to all Members at any stage.

“10.40. The most disappointing fact about the submission was that while attacking JSIs, it did not provide any way forward essentially keeping the WTO to languish in the current limbo. No Member had taken the position to leave behind the core WTO mandated issues like agriculture or ‘horizontal’ S&DT. However, if the needs of the businesses and the people worldwide including in developing countries required Members to agree on adequate and up-to-date rules on other important issues, they had no right to keep those requests as hostages of their inability to reach progress on all fronts.”

Japan (page 71 of WT/GC/M/190)

“10.41. The representative of Japan appreciated the Joint Statement Initiatives as an essential framework to allow the WTO to address in a flexible and realistic manner the changing global economic needs of the 21st century. The JSIs responded to calls from a broad range of stakeholders by discussing key economic issues and would contribute to updating the WTO rulebook and to
ensuring the relevance of the WTO in today’s world. Without the JSIs, the WTO risked becoming less relevant and even losing its raison d’être as a cornerstone of the multilateral trading system. The JSI meetings were organized in an open, transparent and inclusive manner.

“10.42. While taking into account the convenience of respective Members including the size of their delegations in organizing the process, the fact that many of them were participating in the JSIs and actively engaging in negotiations in a creative and innovative way clearly showed the JSI’s importance. A number of achievements made in the GATT and the WTO had initially been taken up
or discussed in plurilateral initiatives which were later merged in the system. Japan believed that the JSIs were consistent with the WTO and had high hopes that they would be a key part of the MC12 outcomes. Japan would continue to work with other Members to deliver substantial outcomes in the JSIs as a positive achievement of the WTO.”

Republic of Korea (page 71 of WT/GC/M/190)

“10.43. The representative of the Republic of Korea, as a staunch supporter of the multilateral trading system, was disappointed to see the WTO in limbo in particular its failure to function as a forum for multilateral trade negotiations in response to the diverse needs and interests of Members. Upon such impasse and trade liberalization shifting weight to regional agreements outside the WTO, plurilateral negotiations could be a meaningful stepping-stone for multilateral agreement. It also served as a test pad for pioneering new trade rules as demonstrated by the GPA and the ITA. The JSIs which were held parallel with multilateral negotiations were essential to maintain the WTO’s relevance in the changing trade environment. Those negotiations were responsive to the demands of diverse stakeholders which would help rebuild trust in the multilateral trading system. Korea
therefore expressed its concern on the communication submitted by India and South Africa which raised questions on the concerted endeavours for revitalizing the WTO’s negotiating function.”

United States (pages 71-72 of WT/GC/M/190)

“10.44. The representative of the United States believed that plurilateral negotiations at the WTO could be a useful means to advance issues of interest to Members and to keep the WTO relevant. It did not view plurilateral negotiations and outcomes as undermining multilateral ones. In fact, plurilateral initiatives could foster new ideas and approaches and build momentum toward
multilateral outcomes. The various rigid positions expressed in the paper would seem to foreclose Members’ ability to pursue creative and flexible approaches at the WTO to the challenges of today and tomorrow.”

Possible JSI outcomes at the WTO’s 12th Ministerial Conference

The WTO is hoping that the 12th Ministerial Conference will finally deliver a fisheries subsidies agreement after 20 years of negotiations. It would be a multilateral agreement and only the second such agreement (the other being Trade Facilitation) concluded since the creation of the WTO in 1995. There are hopes for collective action on trade and health and some other issues. But many of the likely deliverables will involve Joint Statement Initiatives. Hence the position of India and South Africa may muddy the outlook for whether such initiatives when concluded will be incorporated into the WTO acquis.

Press accounts of a recent Chatham House event noted the view of the European Union that the WTO needs to be able to bring these initiatives into the WTO. See Inside U.S. Trade’s World Trade Online, Weyand: WTO reform should include easier’ path for plurilateral deals, November 15, 2021, https://insidetrade.com/daily-news/weyand-wto-reform-should-include-easier-path-plurilateral-deals (“World Trade Organization members need an ‘easier’ way to integrate plurilateral agreements into the organization’s rulebook, European Commission Director-General for Trade Sabine Weyand said on Friday, calling for the idea to be a part of broader WTO reform discussions.”). The EU, like most other WTO Members, has been an active participant in various JSIs.

A former Deputy Director-General of the WTO, Alan Wolff, presented views in Singapore earlier this week on the subject of the role of plurilaterals in the WTO. See Peterson Institute for International Economics, Alan Wm. Wolff, Plurilateral Agreements and the Future of the WTO, November 16, 2021, Remarks delivered at the Nanyang Technological University, Singapore, https://www.piie.com/commentary/speeches-papers/plurilateral-agreements-and-future-wto. His speech is worth reading in its entirety. A few excerpts are provided below and highlight the critical importance of plurilaterals going forward. Whether plurilaterals are within the WTO or outside will basically determine whether the WTO can maintain relevance in the future.

“Plurilateral agreements have become and will remain the primary path forward for improving the conditions for international trade.

“Insofar as the future health of the multilateral trading system is concerned, there are three alternatives:

“(1) coalitions of the like-minded will be able to conclude open plurilateral agreements within the WTO,

“(2) forward-leaning agreements are negotiated outside the WTO but become templates for the multilateral rules, or

“(3) the WTO becomes increasingly irrelevant to new global challenges and there is a consequent fragmentation of the world trading system.”

After reviewing the JSIs and other initiatives on climate change, trade and health and other matters, Amb. Wolff notes that

“Global problems need global solutions.

“The only practical way forward for the WTO is through open plurilateral agreements. Otherwise, Members who are looking for solutions will view the WTO as being increasingly irrelevant. The WTO to thrive needs to become more flexible.

“Notionally, various subjects can be negotiated on their own, in disparate venues, each unrelated to the other, without full transparency, without interested countries having a say. That is a recipe for global incoherence. It is the opposite of what is needed.

“Where trade is a vitally important aspect of meeting a global challenge – such as a pandemic or climate change, there is no clear alternative venue for addressing fully countries’ needs. The WTO must be pressed into service.

“It is time for the WTO’s Members to take the next step and embrace the open plurilateral agreements being negotiated now and those that are going to be launched to meet their needs for the 21st century.”

The 12th Ministerial Conference is the opportunity for WTO Members to embrace the future or commit the WTO to reduced relevancy. By early December, we should understand the likely direction of the WTO.

The WTO and the environment — will the 2020s be different in terms of trade policies that are environmentally supportive?

· November 4, 2021 · 12th Ministerial Conference, climate change · , , , , · No Comments

With the world rapidly approaching the point of no return on rising temperatures, can an organization like the WTO characterized by negotiating paralysis play a meaningful role in seeing that trade rules support sustainable growth and a livable planet in a timely manner?. Recent history would suggest the answer is no or at least not in a timely manner.

Fisheries subsidies negotiations have dragged on for more than two decades, suggesting that even if a robust trade and environment work program is agreed to at the WTO’s 12th Ministerial Conference, the chances of meaningful progress in the current decade are modest at best.

The negotiations for an environmental goods agreement amongst 17 countries and groups accounting for 90% of trade in environmental goods which began in 2014 was essentially discontinued in 2016 despite the obvious global benefit from tariff reductions on the trade in goods that can improve the environment. While many have urged the restart of the talks, it is unclear whether talks will restart and how quickly they could conclude.

There are no ongoing negotiations to address the need to reduce the carbon footprint of industry and agriculture despite some 69 countries having adopted some form of carbon price and the impending start of carbon border adjustment measures (“CBAMs”) by some WTO Members. A global agreement on a carbon price is aspirational at this point without negotiations agreed to or started. Countries working to reduce carbon emissions are concerned about “leakage” of production and jobs to countries with low standards ensuring that there will be CBAMs imposed by some. Some WTO Members are threatening retaliation if such measures are adopted. So the 2020s will likely be a period of conflict among WTO Members on the topic instead of being a period of time in which the WTO and its Members are able to make a critical contribution to controlling the global warming crisis.

Efforts at plurilateral agreements (so-called Joint Statement Initiatives or JSIs) which include some in the environmental area (e.g., marine plastics pollution) are not certain to become part of the WTO, facing opposition from India and South Africa and others.

So recent history does not shout out that the WTO will play an important role in addressing the existential threat flowing from global warming.

This is not to say that the WTO Director-General isn’t advocating for trade to play its role in addressing the problems. Moreover, the Secretariat is attempting to generate information on the role trade can play in addressing global warming through a series of information notes. See, e.g., WTO news, DG Okonjo-Iweala highlights trade’s role in ambitious and just climate action at COP26, 2 November 2021, https://www.wto.org/english/news_e/news21_e/clim_02nov21_e.htm; WTO news, WTO issues information briefs on trade, climate, related issues with COP26 talks underway, 3 November 2021, https://www.wto.org/english/news_e/news21_e/clim_03nov21_e.htm. The press release reviewing DG Ngozi’s statement is copied below.

“Trade can and must make a contribution to a comprehensive climate action agenda, Director-General Ngozi Okonjo-Iweala declared in her engagements with world leaders and stakeholders at the United Nations COP26 Climate Summit in Glasgow, Scotland, highlighting the need for ambitious yet fair commitments that ensure a green transition that is just and inclusive to all economies.

“The Director-General highlighted trade and the WTO’s role in a wide breadth of approaches to climate action in her panels and bilateral meetings, covering carbon emission reductions, the conservation of forests as critical carbon sinks, climate adaptation, and finance.

“On carbon reduction and pricing, she championed a coordinated approach at the high-level event organized by Canada and the Carbon Pricing Leadership Coalition, saying: ‘Let’s move towards a global carbon price. We have a great deal of fragmentation and we are hearing increasingly from businesses that they are finding regulations difficult to navigate and sometimes it results in higher prices for consumers and others. We also have members who are afraid this measure is somehow disguised protectionism which will prevent them from selling products abroad. Their issues need to be respected as we develop these systems.’

“’The WTO provides a forum where we can initiate this dialogue and involve developing and least-developed countries in the conversation. Leaders should task the International Monetary Fund, Organisation for Economic Co-operation and Development, World Bank and the WTO to work together and come up with a global approach,’ she said.

“Halting deforestation and establishing sustainable markets for agriculture must also be part of the comprehensive trade and climate agenda, she said at a session of the World Leaders Summit on Forests and Land Use, organized by the United Kingdom, host of COP26, and the UN Framework Convention on Climate Change. WTO members have already notified an increasing number of policies relating to forestry management (514 measures from 2009 to 2019) as well as sustainable agriculture management (over 1,200 measures). However, more action is needed, such as reforming subsidies that create perverse incentives for market actors to deplete natural resources, the Director-General said.

“At the Africa Adaptation Acceleration Summit, moreover, the Director-General said: ‘Adaptation for Africa must be a priority for the international community. This region contributes the least to emissions but suffers the most. Climate finance for Africa to meet adaptation costs must be ramped up.’

“’We also need to put in place trade policies to cushion against and adapt to the negative impacts of climate change. Trade is part of the solution,’ she said, noting the need for trade to ensure food security in the face of climate threats, provide access to adaptation technologies, and create synergies in Aid for Trade and climate finance.

“The Director-General will also underline the importance of support for developing countries and least developed countries (LDCs) at the 3 November event organized by the United Kingdom on mobilizing climate finance.”

The five information papers released from the Secretariat on November 3, 2021 are:

TRADE AND CLIMATE CHANGE, INFORMATION BRIEF N°1, MAPPING PAPER: TRADE POLICIES ADOPTED TO ADDRESS CLIMATE CHANGE, https://www.wto.org/english/news_e/news21_e/clim_03nov21-1_e.pdf.

TRADE AND CLIMATE CHANGE, INFORMATION BRIEF N°2, CLIMATE CHANGE IN REGIONAL TRADE AGREEMENTS, https://www.wto.org/english/news_e/news21_e/clim_03nov21-2_e.pdf.

TRADE AND CLIMATE CHANGE, INFORMATION BRIEF N°3, TRADE RESILIENCE IN THE FACE OF A RISING BURDEN OF NATURAL DISASTERS, https://www.wto.org/english/news_e/news21_e/clim_03nov21-3_e.pdf.

TRADE AND CLIMATE CHANGE, INFORMATION BRIEF N°4, CARBON CONTENT OF INTERNATIONAL TRADE, https://www.wto.org/english/news_e/news21_e/clim_03nov21-4_e.pdf.

TRADE AND CLIMATE CHANGE, INFORMATION BRIEF N°5, AFRICA UNDER A CHANGING CLIMATE: THE ROLE OF TRADE IN BUILDING RESILIENT ADAPTATION IN AGRICULTURE, https://www.wto.org/english/news_e/news21_e/clim_03nov21-5_e.pdf.

A former Deputy Director-General of the WTO, Alan Wolff, in comments to the Harvard JFK School last week, identified a third required outcome of the WTO’s 12th Ministerial Conference (besides a statement on trade and health and the conclusion of the fisheries subsidies negotiations) to be —

“3. A clear pledge to deal with trade and climate, and other environmental issues (marine plastics pollution, fossil fuels, etc. – this last, probably unspecified).

“• The effort is likely to take the form of an open plurilateral negotiation, a joint statement initiative. This is now a path more often chosen, as agreement among 164 disparate sovereigns is becoming close to impossible to achieve.”

See Defining Success for MC12, Notes for remarks of Alan Wm. Wolff, Peterson Institute for International Economics, Harvard JFK School, 29 October 2021, https://www.piie.com/sites/default/files/documents/wolff-2021-10-29.pdf (page 3).

While the start of a JSI on trade and climate is the most that can be hoped for at the Ministerial, even if achieved, the question will be can progress be made quickly enough to affect global warming. The fact that the scope of any such negotiations is uncertain strongly supports the view that efforts at the WTO on a plurilateral or multilateral basis will be too limited and too late to make a difference.

This will likely mean any meaningful movement will be implemented by individual Members or potentially small groups and probably occur outside of the WTO. In the absence of global or plurilateral agreements, actions by individual Members will be needed but almost certainly not enough.

Let’s hope that the above analysis proves too pessimistic. For our children and grandchildren, a lot depends on a global robust response to global warming in many policy areas, including trade.

Alan Wolff’s vision for saving the WTO — aspirational but is it achievable?

· May 1, 2021 · The future of the WTO · , , , , , · No Comments

Alan Wolff served as a Deputy Director-General at the World Trade Organization until the end of March this year. He is now a Distinguished Visiting Fellow at the Peterson Institute of International Economics. While at the WTO, DDG Wolff was a frequent speaker to Members and groups on various aspects of the WTO, its importance to bettering lives and promoting peace and the need for reform to remain relevant. I have covered some of former DDG Wolff’s statements in prior posts. See, e.g., March 6, 2021, WTO’s four Deputy Directors-General tenure reportedly concludes at the end of March 2021 — thanks for an outstanding job, https://currentthoughtsontrade.com/2021/03/06/wtos-four-deputy-directors-general-tenure-reportedly-concludes-at-the-end-of-march-2021-thanks-for-an-outstanding-job/ (DDG Wolff gave 142 speeches between October 2017 and March 6, 2021); December 8, 2020, Trade for Peace Week at the WTO – a positive look at how trade can and should contribute to global peace and stability, https://currentthoughtsontrade.com/2020/12/08/trade-for-peace-week-at-the-wto-a-positive-look-at-how-trade-can-and-should-contribute-to-global-peace-and-stability/; November 22, 2020, DDG Wolff’s comments to G20 on immediate challenges for trade to address economic rebound from the pandemic and for WTO reform, https://currentthoughtsontrade.com/2020/11/22/ddg-wolffs-comments-to-g20-on-immediate-challenges-for-trade-to-address-economic-rebound-from-the-pandemic-and-for-wto-reform/; November 10, 2020, The values of the WTO – do Members and the final Director-General candidates endorse all of them?, https://currentthoughtsontrade.com/2020/11/10/the-values-of-the-wto-do-members-and-the-final-director-general-candidates-endorse-all-of-them/.

On April 29, 2021, the Peterson Institute of International Economics presented an hour virtual program with Mr. Wolff during which he presented his thoughts on “Saving the WTO, A Roadmap to the Future” and answered questions. Mr. Wolff provided a paper, and a slide deck (which he went through during his presentation). Links to the virtual meeting, his paper and his slide deck can be found here: PIIE Virtual Event, The Future of the WTO, April 29, 2021, Chttps://www.piie.com/events/future-wto; Alan Wm. Wolff, Saving the WTO, A Roadmap to the Future of the World Trade Organization, April 29, 2021, https://www.piie.com/sites/default/files/documents/wolff-4-29-2021speech.pdf; Alan Wm. Wolff, presentation slides, Saving the WTO, A Rodmap to the Future, April 29, 2021, https://www.piie.com/sites/default/files/documents/wolff-4-29-2021ppt.pdf.

Mr. Wolff’s paper, slide deck, and presentation reflect his thinking on the importance of the World Trade Organization, the challenges that need to be addressed to get to a future of continued importance for the WTO and reforms that will be required in the structure and operation of the organization. For those with an interest in the multilateral trading system and the challenges defining the current mix of global trade needs, Mr. Wolff’s materials are an important resource and will undoubtedly spark a lot of discussion in Geneva, in capitals and among those caring about a viable trading system. While there are practical aspects of his paper, the paper in total is aspirational. While there are many questions about whether the elements of the roadmap laid out are achievable and while there are some potential missing links or sequencing issues that may prevent forward movement on some items, Mr. Wolff’s vision of what could be is worth careful evaluation.

Mr. Wolff reviews that the WTO governs more than three quarters of world trade, is the basis for the hundreds of free trade agreements and has all Members stating that the system serves their interests. Negotiations, transparency/ implementation and dispute settlement are the core elements. For fragile and conflict-affected countries, membership supports achieving peace through improving opportunities for citizens. Since the late 1940s, the GATT and now the WTO have seen huge increases in trade with billions of lives improved as a result.

While the value of the WTO is encapsulated in the above aspects, there are obviously many problems that plague the current functioning of the WTO. Some are discussed in Mr. Wolff’s paper — e.g., mistrust, limited success of negotiating function, lack of full transparency, breakdown of the dispute settlement system, and changing economic profile of Members and hence obligations Members should assume.

There are eight current major challenges that Mr. Wolff identifies as needing to be addressed to get to the future (slides 8 and 9):

“1. Dealing with the trade aspects of fighting the pandemic.

“2. Using trade to boost the economic recover, with special attention to developing countries.

“3. Making the recovery greener.

“4. Assuring that carbon border adjustment measures are based on cooperation and do not become a source of conflict.

“5. Forestalling fragmentation of the digital economy.

“6. Putting into place binding dispute settlement that is accepted as legitimate by all litigants.

“7. Making the trading system visibly more positive for workers.

“8. Reforming the WTO as an institution.”

Dispute Settlement discussion

There are many specific proposals for actions that are suggested to be taken under each of the topics. Each section of the paper is worth careful review. For purposes of this post, because I have written extensively on dispute settlement, I look at the section of Mr. Wolff’s paper dealing with dispute settlement (pages 14-18). Mr. Wolff’s discussion is copied below.

“Dispute settlement

“• The primary feature that distinguishes the WTO from most other international organizations is the fact that the commitments contained in its agreements are enforceable. Putting into place binding dispute settlement accepted as legitimate by all litigants is essential to restore enforceability.

“There being no Appellate Body (AB) at present, major litigants, including the U.S. and the EU, have used a procedural trick to prevent a dispute settlement panel finding from becoming final. This is informally known as “appealing into the void”. Proceedings are paused indefinitely while the losing party at the panel stage appeals to a body that does not exist except on paper.

“The blocking of appointments is the sole result of one Member, the United States, being dissatisfied with what the Appellate Body was doing and not doing, mostly rendering trade remedies less effective and in some instances totally ineffective. While killing off the Appellate Body was largely a matter of one Member acting against the will of 163 others, there has been a growing recognition that only a serious negotiation is going to resolve the matter. Importantly, an increasing number of Members now concede that the former system had serious imperfections, so that change is necessary.

“There is a far wider and deeper importance to the dispute settlement issue than correcting quasi-judicial overreach, or under-performance. The premise on which the United States entered into its agreements liberalizing trade was that industries and workers suffering harm from facing a more open domestic market or from unfair foreign competition would have a remedy within agreed limits. The erosion of trade remedies — their increasing unavailability and increasing ineffectiveness when available — caused a fundamental imbalance as compared with the deal that the United States thought that it had negotiated. In part it is due to this imbalance that a belief has grown in some quarters that the WTO serves capital rather than labor.

“It is the widely held view in the United States, in the Senate, House and Executive Branch, that the Appellate Body sowed the seeds of its own destruction. Domestic experience in the United States with its own Supreme Court is instructive. The Court itself becomes threatened if it becomes politically tone-deaf. This occurred with respect to
New Deal legislation during the 1930s, and it was, observers feel, threatened again during more recent times with the attempted judicial repeal of Obamacare. In the United States, the constitutional system has checks and balances preventing a rule by judges (gouvernance des juges as the problem was known when it was a central cause of the French revolution). In the WTO, there has been neither a legislative nor an executive function available to review and change any outcomes that emerged from the Appellate Body. Kritarchy, rule by judges, is a form or governance that is unsustainable, and that is what occurred, at least with respect to trade remedies. This is unsupportable for an organization consisting of Members prizing sovereignty over their own trade.

“The solution to the WTO dispute settlement problem lies in creating accountability to the Members. This should not take a form that interferes with the independence of its decision-making nor the binding nature of decisions. I support, as do almost all and perhaps ultimately all Members, a binding, independent, two-tier (panel and appellate stage) WTO dispute settlement system. As it may be impossible to create a relevant legislative function which would provide systemic checks and balances, much of the cure of necessity will have to lie in how a new Appellate Body (NAB) is structured.

“The European Union created a multiparty interim arrangement (MPIA). Although not a complete solution in itself, it can provide some ideas for moving forward with changes in the structure of the appellate body and how it functions. The process conducted by then Dispute Settlement Body Chair Ambassador David Walker also yielded elements of a
potential solution. The following suggestions could be considered:

“• Expand the number of Appellate Body members. The EU suggested a roster of 10 for its MPIA (only three serving on any one case) but this number could be expanded to provide greater diversity of representation both in terms of geography and skill sets — including relevant trade remedy experience, as antidumping and subsidies are complex matters.

“• Provide explicitly for a role of the WTO secretariat to seek to narrow differences and make the process more about settling a particular dispute than on seeking to make law.

“• Seek to uphold the primary importance of trade agreements by directing appellate panels to look at negotiating history to discern the intent of the parties.

“• Have strict time limits for appellate review to discourage a de novo examination of the issues at hand.

“• Place emphasis on streamlining written presentations as well as limits on length of decisions to focus on the essential elements needed to settle a dispute.

“• The rules should provide that only issues raised by the parties can be addressed on review.

“• Where the WTO agreements do not cover a specific issue, the matter should be referred to the Members to resolve through rulemaking.

“• Double down on the emphasis that the appellate review is not to expand obligations or limit rights and is to give due deference to domestic decision making where trade remedies are the subject of review.

“• The appellate body should not act as a collegial body on particular cases — appellate panels should be independent of each other.

“• It is necessary to try to provide a suitable oversight role for the Dispute Settlement Body (DSB) which is currently no more than a rubber stamp for appellate decisions.

“Another major problem with WTO dispute settlement is that it takes far too long to get to a result, often taking several years. This is unacceptable in the eyes of ministers of WTO Member countries bringing a case and industries seeking to benefit from it. Strict time limits must be adhered to. Justice delayed can easily become justice denied.

“As for process, I would suggest that the trilateral partners, the EU, the U.S, and Japan, begin working on a solution. The three are used to working with each other. The EU and the U.S. have been the furthest apart on the AB issue, with Japan somewhat in the middle. In parallel, a small working group of friends of the DSB chair or General Council chair, could be constituted to consider ways forward. The trilateral would feed suggestions into the working group, and both could report to the Membership as a whole in the DSB. At this stage a meeting of the whole membership in the name of inclusiveness, would not be productive. Inclusion in a null result is not meaningful inclusion.”

As Mr. Wolff’s paper correctly notes, there have not been effective checks and balance on the Appellate Body which is not supportable over time as it results in obligations not from negotiations but from decisions of the Appellate Body. His suggestions address a number of concerns raised by the U.S., including overreach problems through clarifying what expanding rights and obligations means (e.g., no gap filling), providing deference to administering authorities in trade remedy cases (giving meaning to ADA Art. 17.6(ii), limit issues reviewed to those raised by parties, strict time limits, etc.

Missing from Mr. Wolff’s analysis is the concern raised by the Trump Administration that because economies such as the Chinese economy don’t conform to market-economy principles, the current dispute settlement system doesn’t permit addressing distortions created by such economic systems and permits such economies to block efforts to address such distortions by trading partners under their domestic law. Mr. Wolff while serving as a Deputy Director-General at the WTO reviewed his belief that the WTO system was premised on convergence of economic systems versus the coexistence of different economic systems. He repeated that view during the virtual event on April 29th and in his paper but noted that a number of WTO Members do not support that view. In a consensus based system, those opposed to convergence can block clarification of the need to converge. Mr. Wolff’s paper doesn’t review whether dispute settlement reform can occur without solving that underlying issue (either through achieving convergence or by adopting new rules to achieve more acceptable balance). Indeed, his paper suggests that “Part of the answer to distrust in the area of trade will be putting into place more effective and timely dispute settlement as a means for trade agreement enforcement.” (page 22)

Also missing from Mr. Wolff’s analysis is the need to curb review of factual findings of panels by the Appellate Body (the DSU Article 11 issue) and the need to address rebalancing of rights and obligations to correct for past overreach situations.

Conclusion

Mr. Wolff’s paper and presentation correctly claim that the WTO must be more engaged and respond to the existing challenges through action. While acknowledging the mistrust and problems with the current structure and operation of the WTO, his remarks present a vision of a better functioning global trade system that responds to the needs of its Members, is capable of addressing a changing world through improved transparency, cooperation, updated rules, a revised dispute settlement system and a Secretariat that is able to present ideas for action, independently monitor compliance and more.

For skeptics, it will be easy to point to not only mistrust, but vastly different perspectives by Members on the role of the WTO and the focus of future activities, the current consensus system and its use by many to thwart movement, and the increased activity of Members outside of the WTO to support the view that Mr. Wolff’s vision, however interesting, has no chance of succeeding.

Mr. Wolff quotes President Theodore Roosevelt in his paper (page 5), a quote that he would undoubtedly put forward in response to the skeptics and to urge WTO Members to recommit to the effort.

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust
and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.“

Selecting an acting Director-General for the World Trade Organization — the road forward

· July 30, 2020 · Selection of WTO Director-General · , , , , , · No Comments

At tomorrow’s informal meeting of the Heads of Delegation in Geneva, the hoped for agenda would include both finalizing the process for phase three of selecting a new Director-General and, if progress were made in consultations with Members, reviewing selection of an acting Director-General to serve after current Director-General Roberto Azevedo steps down on August 31 until a new Director-General is in place (likely November 7 or later). If the issue of the acting Director-General is resolved at the informal Heads of Delegation meeting, then a General Council meeting would be called, presumably tomorrow afternoon, to formally select the acting Director-General by consensus.

News articles indicate that the consultation process appears at an impasse with the United States wanting Deputy Director-General Alan Wolff to serve as the acting Director-General but facing opposition from both the EU and China. Mr. Wolff is from the United States. Apparently the other Deputy Director-General being actively considered is Karl Brauner who is from Germany. See, e.g., Reuters, July 29, 2020, Exclusive: WTO unlikely to get interim leader as U.S. insists on its candidate, causes impasse, https://www.reuters.com/article/us-trade-wto-usa-exclusive/exclusive-wto-unlikely-to-get-interim-leader-as-us-insists-on-its-candidate-causes-impasse-idUSKCN24U2P2. The article suggests that Members may be considering simply leaving the WTO organization without a Director-General until the selection process is completed. But the end game won’t be known until the meeting tomorrow morning.

Efforts by WTO Members to avoid blockage of selection process

The WTO Members agreed to a process for selecting a new Director-General at the end of 2002 to try to avoid the deep divisions and chaos that had characterized the 1999 selection process where there was a deadlock over two candidates, a delay in picking a Director-General and ultimately a decision to give the position of Director-General to each of the two candidates but at reduced time periods of three years each. In 1998-1999 there were no agreed-to procedures for either the selection of the next Director-General or for choosing an acting Director-General.

The 2002 procedures adopted by the General Council were intended to address both issues, although the vast majority of the procedures pertain to the selection of the Director-General while only one sentence of one paragraph addresses the selection of an acting Director-General. See Procedures for the Selection of Directors-General, adopted by the General Council on 10 December 2002, WT/L/509 (20 January 2003), para. 23 (“In the event of a vacancy in the post of Director-General, the General Council shall designate one of the existing Deputy Directors-General to serve as Acting Director-General until the appointment of a new Director-General.”). The 2002 procedures are embedded below.

WTL509

The lack of leadership by the U.S., EU and China

If the news articles are correct that the impasse flows from the views of the United States, the EU and China, then one can only shake one’s head in disappointment at each of the three for lack of leadership. In a prior post, I reviewed that the selection of an acting Director-General should be an easy job for the WTO membership. Each of the four Deputy Directors-General are well known to the Members and each is obviously qualified. The job of acting is temporary and has been described as administrative in nature. See July 24, 2020, WTO Director-General’s farewell address to the General Council while Members can’t agree on an acting Director-General, https://currentthoughtsontrade.com/2020/07/24/wto-director-generals-farewell-address-to-the-general-council-while-members-cant-agree-on-an-acting-director-general/.

Alan Wm. Wolff is an exceptionally talented individual who has probably had the largest public presence of any Deputy Director-General in the history of the WTO. His speeches which are available from the WTO news archives should be collected and released as a book by the Secretariat. They reflect Mr. Wolff’s deep commitment to the multilateral trading system, his deep knowledge of history and cover a broad array of topics. For example, he speaks eloquently on the role of the World Trade Organization in maintaining peace and stability, the history of the WTO, the values undergirding the organization, the hope that the WTO provides to countries seeking accession and the work ahead to keep the organization serving its core purposes. He would be a very interesting candidate for Director-General if the United States had put him forward. He certainly would be a competent acting Director-General.

But the same can be said for each of the other Deputy Directors-General. Each will be able to handle the interim task of being the acting Director-General pending the selection of a new Director-General.

So it is obviously disappointing to see the impasse which reflects poorly on each of the major players involved.

A possible solution

While the WTO Members can obviously ignore the procedures they adopted in 2002 for selecting an acting Director-General and proceed without a Director-General, there are different paths to a possible solution that could be taken.

Obviously, Members could opt to overcome the impasse and get behind one of the four Deputy Directors-General. That is the best possible outcome.

Absent the Members fulfilling their role and finding consensus, the Deputy Directors-General who are under active consideration could withdraw their names from consideration by indicating that they would not serve if selected. While WTO Members may be unable to look out for the best interest of the organization, there is little doubt that each of the Deputy Directors-General has the best interests of the WTO at heart.

While the impasse could be solved by just Alan Wolff withdrawing, it would be a stronger message if both Messrs. Wolff and Brauner withdrew. There would still be two individuals to choose from. And a needless problem for the organization would be solved by the Secretariat leadership despite the narrow thinking of some of its Members.

The above suggestion is just a thought for the good of the WTO and its Members.