Statement by Ambassador Shea at the TNC Heads of Delegation Meeting

Statement delivered by Ambassador Dennis Shea

At the World Trade Organization
TNC Heads of Delegation Meeting, October 12, 2020

Mr. Chairman, it is encouraging to see a growing international consensus on the need for a reset of the WTO, and an acceptance that the organization needs to undergo fundamental reform after years of limited achievements.

I would like to focus my remarks today on one aspect of the necessary reform of the WTO – confronting the failure of the negotiating function to bring about greater liberalization of trade and to promote market practices.  We had once believed that successive rounds of negotiations at the WTO would preserve the relevance of the organization by addressing the uneven liberalization of tariffs and other market access barriers across the Membership, and by providing a forum to deal with the profound distortions to the world economy from non-market practices and policies.  We are all well aware that this has not happened.  We have to push a bit deeper into why that is the case.

The institutional paralysis of the negotiating function should be at the center of our reform efforts.  It is clear to us that piecemeal reforms will not suffice to pull the WTO from its current rut. Consequential reform of the negotiating function needs to begin with a shared commitment to the foundational principles of the WTO, which include a strong commitment to market openness and a level playing field.

We believe that all Members – whether founding Members or Article XII Members – have undertaken commitments to curb non-market practices that cause significant trade distortions. From this foundation, we need to take concrete steps to revitalize how we negotiate.  Otherwise, we will once again collectively fail to achieve our negotiating objectives. We have asked some simple questions to begin with – do we all agree to commit to fulfilling basic transparency obligations, and do we agree that we should reserve special and differential treatment to the lowest-income countries least integrated into the global trading system? If not, then perhaps our divisions are far deeper than they may outwardly appear.

We also need to appreciate the connection between a dysfunctional dispute settlement system and the near collapse of the WTO’s negotiating function.  As the Appellate Body assumed more and more authority beyond that envisioned in the Dispute Settlement Understanding, many members refocused their efforts, using litigation rather than negotiation as the means of achieving desired outcomes.

If we are going to change the unacceptable status quo at the WTO, we need to question our current way of doing things. The United States has actively engaged on issues we believe are important, and we have been willing to put our name to concrete ideas and proposals.

We have sought to reassert our shared vision of a trading system based on market-oriented conditions; reform our approach to special and differential treatment; encourage greater compliance with basic transparency obligations; and reaffirm that it’s up to the membership itself – not elements of the WTO’s dispute settlement system – to issue authoritative interpretations of the WTO Agreements.

These are all necessary building blocks for a multilateral negotiating pillar to function properly. Looking ahead, we have difficulty in seeing how we break out of the rut we now find ourselves in unless we address some of these fundamental questions that speak to how the negotiation function is going to work. As the United States stressed at the recent G20 meeting, if we collaborate to embrace reforms and reinvigorate the WTO, we stand a chance of making it relevant in light of today’s challenges. A good first step would be concluding an ambitious fisheries subsidies agreement this year. However, time is running short.