TWN Info Service on WTO and Trade Issues (Jul26/05)
9 July 2026
Third World Network

Trade: Majority reject WTO reform proposals amid credibility concerns
Published in SUNS #10477 dated 8 July 2026

Geneva, 6 Jul (D. Ravi Kanth) -- Attempts by the chair of the World Trade Organization's General Council (GC) to drive progress through a seemingly irrational agenda for meetings on WTO reform apparently failed last week, with a large majority of developing and least-developed countries indicating that the proposed reforms lack credibility, said people familiar with the development.

Barring a small group of major developed and several middle-income countries - known as the "Friends of the System" group, which includes China - the majority of members sharply rejected any changes to consensus-based decision-making, self-designated special and differential treatment (S&DT), and other foundational issues, said participants who attended the meeting.

Fully aware of the majority's opposition to the proposals on WTO reform, the GC chair, Ambassador Clare Kelly of New Zealand, must now reconsider whether it is appropriate to continue with these negotiations, rather than focusing on the issues being raised by the majority of developing countries, said people familiar with the development.

During meetings held from 30 June to 1 July on issues such as "development," "level playing field issues," "decision-making," and "foundational issues", intense opposition to these four topics - which are increasingly seen as the concerns of a "small clique" of countries - has torn apart the credibility of the reform process, said several trade envoys who asked not to be quoted.

Moreover, the seemingly irrational and excruciating meeting agenda set by the GC chair, which has been repeatedly opposed since 2025, appears to be viewed as a "wrecking-ball" strategy intended to make the WTO even more irrelevant, said a former GC chair who asked not to be identified.

The agenda also seems to expose the utter disregard for the concerns of small countries with limited resources, said a trade envoy who asked not to be quoted.

ASYMMETRIES

Developing countries appear to have voiced their core demands, including addressing the existing asymmetries, preserving the consensus principle, maintaining self-designated S&DT for developing countries, tackling the unfinished Doha agriculture agenda, and focusing all efforts on the MC12 mandate on dispute settlement system (DSS) reform, said people familiar with the development.

To recall, the MC12 mandates, endorsed by all members in Geneva in June 2022, explicitly outlined the path forward on dispute settlement.

They stated: "We acknowledge the challenges and concerns with respect to the dispute settlement system including those related to the Appellate Body, recognize the importance and urgency of addressing those challenges and concerns, and commit to conduct discussions with the view to having a fully and well-functioning dispute settlement system accessible to all Members by 2024."

However, the 2024 deadline was never met and is unlikely to be met anytime soon, as one powerful country appears to have opposed any further discussions on this issue, said people familiar with the development.

In 2025, the current GC chair from New Zealand, who previously chaired the discussions on DSS reform, reportedly placed DSS reform on the proverbial back burner while ensuring that the "manufactured" agenda of WTO reform occupied center stage, said people familiar with the development.

Since the Geneva ministerial conference in June 2022, a small group of countries appears to have ensured that negotiations on DSS reform remain stalled, while shifting and "hijacking" the discussions toward the "manufactured" agenda of WTO reform - apparently driven by the Norwegian GC chair in 2024 and later as facilitator in 2025, said people familiar with the development.

The DSS reform negotiations were seemingly scuttled by a powerful member who appears to be opposed to any binding two-tier dispute settlement system.

The United States is likely to impose a new round of seemingly illegal tariffs under Section 301 of the US Trade Act of 1974 next week on grounds of the use of "forced labour".

This section has been severely censured by several WTO dispute panels. However, panel rulings have been voided by the US by appealing to the WTO' Appellate Body, which has remained dysfunctional since December 2019.

In a similar vein, several previous ministerial mandates - dating back to the WTO's Fourth Ministerial Conference in Doha, Qatar in November 2001 - have called for making special and differential treatment (S&DT) "simple" and "effective" to ensure that S&DT is implemented and that developing countries can actually avail themselves of the proposed benefits.

Several studies have pointed out that developed countries neither properly implemented nor even adequately addressed duty-free, quota-free market access for least-developed countries.

Yet, under the pretext of WTO reform, a small group of countries - particularly the US - want to radically change the current architecture for S&DT, an exercise Washington initiated during the Trump administration's first term and has now escalated again, said people familiar with the development.

In its proposal (WT/GC/W/998) on "further perspectives on WTO reform," circulated on 23 March, the US stated that it "believes that Members should seek to restore the purpose of SDT by agreeing to objective criteria for determining eligibility."

Effectively, the US appears determined to deny S&DT to more than 20 developing countries, said people familiar with the development.

DECISION-MAKING

Last week, a large majority of countries rejected any proposal to alter decision-making by consensus - which they consider a treaty right enshrined in the Marrakesh Agreement that established the WTO in 1995.

"If originalism is so vital for the current American Supreme Court after 250 years, how on earth can the foundational principles of the Marrakesh Agreement – now 31 years old - be altered according to the whims and fancies of powerful members such as the US, the European Union, and China?" asked a trade envoy who asked not to be quoted.

The powerful countries also want to dismantle the MFN (most-favored-nation) principle on non-discriminatory trade - to promote their allegedly unilateral and illegal actions, which have been in full play since April 2025.

The US stated that it "believes Members need to rethink how the MFN principle functions in its current form and embark on a frank discussion of the link between MFN and reciprocity, which itself is a bedrock WTO founding principle."

Essentially, the US demand to link MFN with reciprocity would amount to replacing the notion of comparative advantage with mercantilism in global trade, said people familiar with the development.

Similarly, the proponents of WTO reform calling for "flexible" decision-making appear to be attempting to incorporate plurilateral agreements into the WTO - another route to break the rules, said many developing countries.

To top it all, the manner in which some facilitators have been drawn from the "Friends of the System" group, as well as the nomination of a developed-country trade envoy on "decision-making" has raised questions, said a trade envoy who asked not to be quoted.

Moreover, facilitators with little or no institutional knowledge appear not only to be inexperienced but are also capable of constructing reports that promote reform agendas with little credibility, said people familiar with the development.

Interestingly, one facilitator - who until recently allegedly served as a former director of finance at the WTO and was later promoted to trade envoy for her country - now oversees the "development" file, said people familiar with the development.

The "facilitators are lightweights", said a trade envoy, adding that they could pose a problem in constructing the reports. +