TWN Info Service on WTO and Trade Issues (Jul26/12)
21 July 2026
Third World Network

Trade: North accused of "railroading" WTO reform as South resists
Published in SUNS #10482 dated 15 July 2026 

Geneva, 14 Jul (D. Ravi Kanth) -- Ahead of the World Trade Organization's General Council (GC) meeting on 14-15 July, a coalition of major industrialized nations - Japan, the European Union, and the United Kingdom among others - rushed to unveil their respective WTO reform proposals on 13 July.

According to people familiar with the development, this apparent haste is a calculated manoeuvre to dictate the narrative on the fiercely contested reform issues that the majority of developing and least-developed countries have overwhelmingly opposed.

On 13 July, the European Union submitted three proposals: "WTO reform: Further reflections on disciplines, subsidies and industrial policy" (WT/GC/Reform/W/5); "WTO reform: Further reflections on foundational issues following the fourteenth session of the ministerial conference" (WT/GC/Reform/W/6); and "WTO reform: Further reflections on the WTO's governance (WT/GC/Reform/W/7).

These followed Japan's submission on "Designing together: A fairer and more dynamic system" (WT/GC/ Reform/W/8).

Some of the proposals like Japan's proposal on "a fairer and more dynamic system" appear to raise serious questions of conflict of interest, as Japan's trade envoy is also the facilitator for the WTO reform issue of  "decision-making", said several trade envoys, who asked not to be quoted.

Last week, the United Kingdom circulated its proposal, titled "Levelling the playing field through multilateral reform" (WT/GC/Reform/W/4).

This came on the heels of a Swiss non-paper on "flexible" decision-making, Australia's proposal to institutionalize plurilateral arrangements, and Argentina's proposal on advancing plurilateral agreements.

Behind closed doors, the industrialized countries' aggressive tactics have triggered a strong backlash.

According to some trade envoys, who preferred not to be identified, during an informal lunch gathering of select countries, the chair of the General Council, Ambassador Clare Kelly of New Zealand - which itself co-sponsors these proposals - was cautioned that if the major reform proponents resort to this form of negotiation/coercion, the developing countries will respond in kind.

Despite this intense opposition and the turmoil in what one African trade envoy described as the "reform casino," the industrialized countries appear to be hurriedly throwing their proverbial chips on the table to deceive the developing and poor nations.

The envoy, who asked not to be quoted, painted the situation as "an asymmetrical negotiating warfare."

Historically, the developing countries have lacked the resources and unity necessary to thwart these non-level playing field game plans.

Surprisingly, the United States has refrained from throwing its proverbial chips into this particular game, even as it wages allegedly WTO-illegal tariff and trade wars against various countries, said another trade envoy who asked not to be quoted.

A snapshot of the proposals reveals little more than proverbial "old wine in new bottles."

Over the past year and a half, these exact issues had already been pushed by the proponents and the controversial GC chair and facilitator, Ambassador Petter Olberg of Norway.

Now, the current GC chair is unabashedly advancing the same WTO reform issues despite the complete lack of a ministerial mandate - either at the WTO's 13th ministerial conference (MC13) in Abu Dhabi in March 2024 or at the 14th ministerial conference (MC14) in Yaounde, Cameroon in March 2026, according to people familiar with the development.

In both instances, the proponents and facilitators leaned on the chair's statements - which typically reflect a failure to achieve consensus and signify failed ministerial meetings.

"The chair's concluding reports since 1995 have been seemingly considered as irrelevant and with disdain - not worth the paper on which they are written," said a trade envoy who asked not to be quoted.

Yet, under the guise of "openness" - particularly regarding the transparency needed in sharing developments from the recent informal Heads of Delegation meeting or detailing how the guiding questions on WTO reform were opposed - the GC chair has not offered any statement until now, said a trade envoy who asked not to be quoted.

"REFORM CARDS"

Regarding the submissions made on 13 July, the EU's three proposals appear to be an effort to legitimize its favoured issues by cloaking them in a grand narrative that is on the face of it notably disingenuous, said people familiar with the development.

In the introduction to its proposal (WT/GC/Reform/W/7) on further reflections on the WTO's governance, the EU claims that its paper "builds on the EU submission on WTO reform of 21 January 2026 (WT/GC/W/986) and contributes to the ongoing reflections between Members following the fourteenth session of the Ministerial Conference (MC14) in Yaounde in March 2026 on the issue of decision-making."

It suggests "possible improvements to the institutional set-up and engagement structures at political and senior levels."

The EU argues that its proposal "identifies possible practical tools and instruments within the existing framework of rules to operationalise the principle of consensus-based decision-making with the objective of facilitating effective outcomes and overcoming persistent blockages."

Regarding the "questions of decision-making"- discussed in Pillar 1 on Governance and Institutional Issues under the WTO reform process facilitated by Ambassador Olberg, as well as in various breakout sessions on WTO reform at MC14 - the EU seemingly fails to admit that there was no "consensus" reached at MC14, said people familiar with the development.

Contrary to the EU's claim that "the ministerial debate highlighted universal recognition of the practice of consensus-based decision-making as a cornerstone of the WTO," this appears to be a play on words given the glaring lack of consensus among ministers, said people familiar with the development.

Barring the EU and its fellow reform proponents, there was major opposition at MC14 to any "tweaking" of the principle of consensus-based decision-making.

The EU's proposal asserts that "the debate also demonstrated a growing sense that decision-making is not functioning effectively. Many Members underscored that consensus is distinct from unanimity and from veto power"- a characterization that seems to be factually incorrect, said a trade envoy who asked not to be quoted.

The EU states that "the WTO reform debate shows that the value of consensus-based decision-making is recognised."

However, it argued that "the key issue is its operation and the misguided equation of consensus with unanimity. Consensus is understood under Article IX of the Marrakesh Agreement to mean lack of a formal objection and thus allows for operationalising the concept of consensus in a more result-oriented manner."

Without naming India and Brazil among others, the EU maintains that "the way consensus currently functions has resulted in protracted deadlocks - including instances of persistent blocking by a single or a very limited number of Members opposing - thereby contributing to the Organization's paralysis."

However, this alleged "organizational paralysis" actually stems from the constant practice of moving the goalposts without addressing the mandated issues, thereby eroding trust by major countries like the EU and others at every ministerial meeting since the WTO's ninth ministerial conference in Bali, Indonesia in December 2013, said people familiar with the development.

Having covered all WTO ministerial conferences so far, a former trade envoy, who asked not to be quoted, noted the glaring practice of the industrialized countries in raising new issues only after "pocketing" (a term used in multilateral trade negotiations) major agreements such as on trade facilitation.

On "next steps", the EU suggests the following in its proposal:

1. "The European Union looks forward to further engaging with Members in an open and constructive manner on the above suggestions, tools and instruments in the WTO reform process with a view to developing operational and effective decision-making.

2. In support of this objective, the membership could consider requesting the Secretariat to compile, for Members' background and future reference, a compendium on past practice and tools for overcoming blockages in decision-making.

3. The membership could also explore inviting other international organizations for an information session on sharing their decision-making practices and experiences, notably as regards procedural and operational aspects, with WTO Members."

In short, the EU and other industrialized countries appear to be working simultaneously to push through several controversial issues at once, even as opposition to them scales up, said people familiar with the development.

FOUNDATIONAL ISSUES

In its proposal (WT/GC/Reform/W/6) on "foundational issues", the EU states: "These foundational issues were discussed by trade ministers at the 14th Ministerial Conference (MC14) in Yaounde for the first time. On the one hand, the ministerial debate highlighted a broad recognition that the WTO's foundational principles, including the most-favoured-nation principle (MFN) and non-discrimination more broadly remain indispensable to the stability and predictability of the conditions for global trade."

"On the other hand," Brussels contends that "the debate highlighted a growing sense that the multilateral trading system is not functioning as originally intended and thus the need for its reform. The continuation of the debate on foundational issues has now been established as one of the four areas of WTO Reform where work will continue under the auspices of the General Council in the coming months."

Several participants argued that this framing manipulates the events of MC14 to serve the EU's interests, failing to credibly reflect the views of the majority of members who stand firmly against changes to the foundational issues.

It is well established that the EU, the US and Japan -  part of a so-called "trilateral" - have long targeted China's alleged subsidy regime.

The EU argues that "it is essential to further explore the linkages with the other main tracks: level playing field, governance and development."

It highlighted that the increasingly impactful and far-reaching State interventions leading to overcapacities and systemic imbalances, with negative spillovers on other Members constitute a key global trade policy challenge.

To ensure fairness, the EU asserts, openness needs to come hand in hand with stronger rules ensuring a level playing field.

The EU maintains that "the discussion on the MFN and non-discrimination principles are intrinsically linked to the notions of variable geometry and plurilateral agreements (both MFN and non-MFN based agreements) covered in the governance track."

In its seemingly misleading proposal, the EU appears to be lecturing developing countries, claiming that "the lack of further gradual reciprocal market opening and rise of state interventions have limited developing members' ability to compete, integrate into global value chains and industrialize."

This is despite the EU itself being one of the main countries affected by the US reciprocal tariffs.

If the EU is truly concerned, "why can't it propose a major topic in the reforms on "unilateral and illegal tariffs imposed by the US"," asked a developing country trade envoy.

Several trade envoys, who asked not to be quoted, suggested that Brussels has "weaponized" the developing country card primarily to advance its own interests since the WTO's first ministerial conference in Singapore in December 1996.

There, the EU introduced the four controversial "Singapore issues" - competition policy, trade and investment, transparency in government procurement, and trade facilitation - as a quid pro quo for merely starting discussions on the mandated issue of agricultural reform.

Allegedly driving its push for plurilateral negotiations, the EU wants members to "consider sectoral trade agreements."

According to the EU, "such agreements could combine liberalisation commitments with relevant disciplines, allowing Members to address the specific challenges of a sector or of a value chain, while reserving the benefits of those agreements to participating Members."

The EU's rhetorical narratives lack credibility, serving as a "camouflaged" way to advance the reform process when it claims that "this approach could help [restore] balance in, for example, strategic sectors negatively impacted by structural imbalances."

Furthermore, the EU said it looks forward to discussing other ideas Members might have and explore additional pathways.

The EU also proposed the following "next steps":

* As previously noted, there are important linkages to the following other areas of WTO reform work, the outcome of which will undoubtedly affect the general balance of rights and obligations.

* First, new rules and commitments could be developed in the form of plurilateral agreements, for which there are already established rules in the WTO. In this context, plurilateral agreements where benefits only apply to the participants are particularly relevant.

* Second, the discussion on foundational issues should also include work on how the distortions, imbalances and negative trade effects caused by State interventions in industrial sectors have altered the overall balance that was considered satisfactory at the time the WTO was established (in an alleged attempt to target China).

* Third, when considering the foundational aspects of WTO reform, the options under consideration should facilitate an approach to development that facilitates their effective integration into global trade.

In short, the EU's proposals appear rather dubious; the stated intentions are one thing, but the real intent to fundamentally change the WTO cannot be concealed, said a trade envoy who asked not to be quoted. +