US Won't Introduce a WTO Reform Package, Assistant USTR Says

There's a consensus on the need for reform at the World Trade Organization, according to Assistant U.S. Trade Representative for WTO and Multilateral Affairs Andrea Durkin, but since member countries have different ideas about what reform is, and different ideas about how to achieve it, it will be a "significant challenge" to make changes in Geneva.

Durkin spoke to an audience at the Yeutter Institute for International Trade at the University of Nebraska-Lincoln on Nov. 2.

Many observers have complained that the U.S. has not laid out the reforms it wants to the Dispute Settlement System that would convince it to allow binding dispute settlement to resume. Durkin said decisions in the WTO harmed America's ability to respond to non-market abuses, and that the U.S. wants to make sure the Dispute Settlement System does not impose new obligations or take away rights that were not agreed to by the members.

"I want to be cautious in how I describe and label outcomes that we would say are reform outcomes because we are not looking for a package for ministers to bless, per se. Our approach is actually to reform by doing," she said.

She said the U.S. has been talking with other countries' delegations about what's wrong with Dispute Settlement, and they're hearing repeatedly that developing countries feel it's not accessible.

"We know there are longstanding differences, but we cannot continue to look backward, either wistfully or regretfully," she said. "We can only move forward and focus on common goals, even if we disagree on how to achieve those goals."

Non-market trade distortions is generally code for China, and Durkin said results at the last ministerial meeting at the WTO were encouraging, because China chose not to claim an exemption as a developing country when it could have. That was the case for the TRIPS waiver, which gave developing countries more leeway to produce COVID vaccines developed in the West without paying large licensing fees.

The ministers also agreed to end subsidies for fishing vessels engaging in unregulated fishing, or illegal fishing, and there are strong transparency provisions in the agreement. "We believe there are gaps in the disciplines from our point of view," Durkin said, including a "need to more squarely address forced labor."

China does not get an out on those transparency requirements.

But Durkin said China often doesn't comply with WTO notification rules for subsidies. She said many countries feel WTO rules are not fit to purpose to address China's state-directed economic model.

"Agreements have failed to restrain China’s use of subsidies due to substantive limitations in the agreements, but China’s failure to observe the most basic WTO transparency obligations inhibits further discussions that are necessary to further close those gaps in the rules,” she said. “And China’s not the only large economy that’s failing to offer members transparency about their measures.”

One of the audience members asked Durkin how the negotiating function of the WTO could be revived. She said there will not be a major round of tariff liberalization negotiations as in the past, but, she said, "I think there is absolutely a desire to move forward incrementally where you can with whoever you can."

She noted that 120 countries signed onto a future work program on sanitary and phytosanitary "regulatory challenges." She said there's the opportunity in committees to discuss specific concerns with SPS measures when they are being developed, before they go into effect. She said that's working well.

"Not everything gets resolved, that’s clear, but it is a solid basis for discussing a risk-based, science-based approach," she said.