EU Members Calling for More Pressure on US Over WTO Changes, Official Says

The EU is hoping for concrete input from the U.S. by year-end on changes to the World Trade Organization’s dispute settlement system (see 2210180006), an EU official said, adding member states are growing increasingly impatient about the U.S.’s lack of action. Sabine Weyand, the European Commission’s director-general, also said the discussions within the EU on extending WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS waiver) have become more difficult.

Weyand, speaking during an Oct. 24 Committee on International Trade meeting at the EU Parliament, said the EU has a daunting number of tasks to complete before the next WTO ministerial conference. “MC 12 (see 2206170010) was an almost unhopeful success given the circumstances, and the outcome is very much in line with the EU strategy,” Weyand said. But she also said the WTO is “caught in the middle of responding to these critical challenges while faced with a geopolitical rivalry between the U.S. and China and the tensions between two different economic systems.”

Among the EU’s priorities before MC 13 is restoring a “fully functioning” WTO dispute settlement mechanism, Weyand said. The EU is hoping to complete the task by 2024, but she said it can’t make much progress without more input from the U.S. Although America has “been engaging in recent times,” the EU “still has to learn from the U.S. what their position on substance actually is, including on the core features of the system,” Weyand said.

“For now, we are willing to see how the U.S.-convened process in Geneva plays out,” she said, “but we will need to see timely and usable outputs from that process.” She said the EU is “aiming” to receive more clarity from the U.S. before the end of the year, suggesting several member states are growing increasingly impatient.

“I will not hide from you that some of our like-minded countries … feel that more pressure needs to be put on the U.S. to engage. I'm not sure about that,” Weyand said. “Engagement, yes. But I'm not sure that pressure will necessarily provide an outcome.”

WTO member states still don’t have a clear consensus on “the core features of the system that we want to preserve,” Weyand said. The EU wants to make sure the dispute system has an “independent and impartial” adjudication process and is “binding based on the rule of negative consensus.”

“Within those guide rails, we believe there's plenty of scope for meaningful reform that improves the system and addresses U.S. interests,” Weyand said. “We look forward to stepping up our engagement with the United States and the entire WTO membership in search for a way to reactivate a fully functioning dispute settlement system.”

But it remains unclear how much the U.S. plans to prioritize work on WTO revisions in the coming months. Jennifer Hillman, a former U.S. International Trade Commission member, said “there has been waning faith in the WTO itself” throughout “U.S trade policy-making circles.” She said one of the main barriers to more U.S. participation is its belief that the WTO is “incapable” of addressing U.S. trade concerns with China.

“We need deeper, more diversified, more resilient world markets, and we simply can't get there without a strong and effective multilateral framework of rules, and that starts and ends with a well-functioning WTO,” Hillman said during the meeting. “So it's clear that there's a lot to do."

She also said the lack of a functioning dispute settlement system means countries will be less willing to make new commitments “if they do not believe there is a functioning dispute settlement system holding countries to those commitments.” The “highly visible demise” of the appellate body has led to a “negative” perception of the WTO, added Hillman, a Georgetown Law professor.

“Countries will take their existing obligations less seriously if there is no serious mechanism for enforcing them,” Hillman said. “And I believe you're already seeing that in the United States -- an erosion of concern over taking actions that violate our WTO obligations.”

Weyand also said the EU is prioritizing work on the TRIPS waiver, including a possible extension, and weighing whether the scope should also include therapeutics (see 2210210006). She said the EU is having “difficult discussions” with member states on the waiver, some of whom don’t see a need for it.

Weyand said some countries ask her: “Why are we talking COVID-19 -- it’s over?” Others don’t yet have a “fixed” position on the matter. “So that is a bit of a challenge for us,” she said. “We are consulting interested stakeholders, including industry and nonprofit organizations, in order to come to a united position on this.”

The WTO needs to reach a consensus on the waiver to address issues surrounding the global “distribution of production capacity of vaccines,” both for the current pandemic and for future ones, Weyand said. “So I hope we will be able to move forward,” she said. “But I will not hide from you that the discussions have become more complicated.”