Hamid Mamdouh — WTO reform imperative: a possible way forward

The urgent always came before the important. Time to change that | WTO

Posted by Peter Ungphakorn

This is a short proposal on World Trade Organization (WTO) reform by Hamid Mamdouh, former director of the WTO Secretariat’s Trade in Services Division and a recent candidate to be WTO director-general.

Mamdouh proposes members start from overall principles and cover all three of the WTO’s main functions:

This should be done, he suggests, in a new working party to start work in the new year.

He is not alone. The EU Commission and Council have also floated the idea of a working group on WTO reform in a trade policy statement presented to the European Parliament on February 18, 2021 (page 18 of this). The EU is understood to be discussing the proposal privately with other delegations in Geneva.

Mamdouh’s approach is practical and reflects the need to look at all aspects of the WTO as a package rather than to discuss the components separately.

However, Robert Wolfe and I continue to argue that before this can happen in Geneva, governments need to reconsider their approaches and their priorities back in the capitals.

— Peter Ungphakorn

WTO reform imperative: a possible way forward

Hamid Mamdouh | Friends of Multilateralism Group

By Hamid Mamdouh
November 1, 2021

(The original paper is available as a pdf file here)

The WTO has been facing increasing challenges since 2008. The ensuing economic crisis, distortive rescue measures, anti-globalization backlash, the failure of the Doha Round and rising trade tensions among members. All that, combined with the more recent Covid 19 crisis, have confronted the WTO with unprecedented threats. Ideally the organization should have been able to manage those challenges with its built-in institutional capabilities represented in its three vital functions namely, the oversight function, the negotiating function, and dispute settlement. However, the three functions have broken down, one after the other.

For several years, the WTO has been in a crisis management mode focused on short term accomplishments

For the past five years, political leaders (G20, G7 and others) have been stressing the urgent need for necessary WTO reform. Structured discussions have been taking place in other forums including the latest G20 meeting in Sorrento and concrete initiatives have been put forward (eg, the G20 Riyadh initiative) identifying priority issues for discussion and resolution, emphasising that any reforms can only be decided by the WTO itself. However, to date, there is yet to be a structured process in the WTO to address the reform agenda. For several years, the WTO has been in a crisis management mode focused on short term accomplishments. In other words, the urgent always came before the important. Now, the important should be seen as the most urgent if there is a will to save the system from sinking into irrelevancy.

MC12 [the 12th WTO Ministerial Conference, this coming Nov 30–Dec 3] represents an opportunity for WTO Members to take a collective decision to start such a structured process. Ideally, Members should have been investing time and effort over the past six months to develop an insightful agenda that reflects a political vision for how the reform process should unfold. At this point in time, it is too late for any such agenda to be ready for MC12. However, it is not too late to aim for a simple agreement among Members to start such a process post MC12. This could be achieved at a high level of generality that covers only essential elements of strategic guidance, such as:

  • Recall the common purpose of the WTO and its objectives enshrined in the Marrakesh Agreement (securing stability and predictability of trading conditions through a rules-based system)
  • Reaffirm the foundational principles of the WTO (transparency, non-discrimination, fair competition, inclusiveness, special and differential treatment [for developing countries], sustainability, etc ….)
  • Affirm the need for a wholistic approach to WTO reform to address issues relating to the three vital functions:
  • The oversight function by regular WTO bodies (Councils and committees) entailing transparency, notifications, cross-notifications, monitoring, cooperation with other international organizations, deliberating specific trade concerns raised by members, as well as discussing new issues or any matters raised by any member that affect the functioning of WTO agreements or the attainment of their objectives.
  • The negotiating function and its operation, including clarifying existing rules regarding different types of negotiating processes and outcomes, the application of special and differential treatment for developing countries and LDCs [least-developed countries] as well capacity building strategies to mitigate the negotiating capacity inequality across the membership.
  • The dispute settlement function (reviewing the operation of the DSU [Dispute Settlement Understanding], reforming the functioning of the AB [Appellate Body])

This process could be taken forward by a Working Party to develop an agenda by a specific date in the first half of 2022, with a view to developing recommendations by MC13 [the 13th WTO Ministerial Conference].

Such a process will no doubt be challenging and would require clear political vision of what the WTO of the future should look like, as well as a great deal of thought leadership to anchor political solutions in sound substantive and technical details.

Hamid Mamdouh is Senior Council at King & Spalding LLP (Geneva office), and Visiting Professor, Queen Mary University of London’s Centre for Commercial Law Studies (CCLS). Before retiring in September 2017, he was a member of the GATT and WTO Secretariats, becoming Director of the Trade in Services and Investment Division. He represented Egypt in the Uruguay Round negotiations up to 1990.

Reproduced with permission of the author

Updates: None so far

Image credit:
WTO building | WTO
Hamid Mamdouh | Friends of Multilateralism Group

Author: Peter Ungphakorn

I used to work at the WTO Secretariat (1996–2015), and am now an occasional freelance journalist, focusing mainly on international trade rules, agreements and institutions. (Previously, analysis for AgraEurope.) Trade β Blog is for trialling ideas on trade and any other subject, hence “β”. You can respond by using the contact form on the blog or tweeting @CoppetainPU

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