WTO reform

The issue of WTO reform is a broad one, encompassing many facets of the WTO's work.  In the Outcome Document adopted at MC12, ministers agreed to address the challenges that the WTO is facing and to ensure the WTO's proper functioning. They committed to work towards necessary reform of the WTO, with the aim of improving all its functions, with the work being member-driven, open, transparent, inclusive, and addressing the interests of all members, including development issues. The work is being carried out through the WTO's General Council and its subsidiary bodies.

Members, both individually and in groups of members, have put forward many ideas on reform, including in the form of proposals and submissions.  These ideas cover issues such as improving the deliberative functions of the WTO; institutional matters; transparency; the working procedures of WTO councils and committees; development; and more general proposals on overall reform of the organization. Others call for discussions on current issues confronting some members such as the use of industrial subsidies, ensuring policy space to promote industrialisation in developing countries, and making trade more inclusive.

Work on WTO reform began immediately after MC12. Four informal meetings on WTO reform were convened in November 2022, and in February, June and September 2023.

At the informal meeting in November 2022, members' discussions focused on reform interests and expectations, and organization of work, with the reform areas highlighted including development, dispute settlement, negotiations, deliberative function, institutional matters, and day-to-day work in WTO bodies.  The subsequent informal meetings focused on reform issues related to development (in February 2023), deliberative function and institutional matters (June 2023), and trade and industrial policy (September 2023).

WTO reform was also an issue addressed at a Senior Officials Meeting in Geneva on 28 October. In their summary report as co-chairs of the meeting, WTO Director-General Ngozi Okonjo-Iweala and General Council Chairperson Ambassador Athalia Lesiba Molokomme said the senior officials attached high priority to the WTO reform process. The co-chairs also highlighted discussions on specific aspects of the reform discussions, including institutional reform, the WTO's deliberative and negotiating functions, possible areas of future work, and others.  The summary report is available here.

Since the Senior Officials Meeting, work has advanced on "reform by doing."  The Goods Council adopted a report in December (G/L/1523) capturing 127 reforms that have been implemented to improve the functioning of the Goods Council and its 14 subsidiary bodies. These include measures to improve the planning and organization of WTO meetings, the procedures for the conduct of formal and informal meetings and the introduction of digital tools to improve productivity and exchange of information.

The General Council continues to monitor progress on "reform by doing", with the most recent update report containing the state of play on reform by doing in WTO councils, committees and negotiating bodies, as applicable, circulated to members on 11 December (JOB/GC/359/Rev.2).

WTO reform has become an important element in efforts to ensure a successful Ministerial Conference in Abu Dhabi. In this regard, members are currently working on a section on WTO reform for a possible MC13 Outcome Document. As currently drafted, this would comprise the following elements:

• a reaffirmation of ministers' commitment at MC12 to work towards necessary reform of the WTO and acknowledgment of the progress made in this regard;
• welcoming and taking note of the work done to date to improve the daily functioning of WTO councils, committees and negotiating groups, with a view to enhancing the WTO’s efficiency, effectiveness, and facilitation of members' participation in WTO work;
• instructing the General Council and its subsidiary bodies to continue to conduct this work and report progress as appropriate to the next Ministerial Conference.

MC13 outcomes

At MC13, WTO members reaffirmed their commitment to work towards necessary reform of the organization. The Abu Dhabi Ministerial Declaration reaffirms the MC12 pledge to work towards necessary reform of the WTO to improve all its functions, with a view to enhancing the WTO's efficiency, effectiveness, and facilitation of members' participation in WTO work.

Ministers at MC13 instructed the General Council and its subsidiary bodies to continue this work and report progress as appropriate to the next Ministerial Conference.

Dispute settlement

A central issue in the reform discussion is dispute settlement, an issue which a large majority of delegations have identified as a top priority.   The issue took on greater urgency after members were unable to reach consensus on the appointment of new Appellate Body members due to objections from the United States.  This blockage eventually led to the Appellate Body no longer being able to function starting from 11 December 2019.

At MC12, ministers recognized the importance and urgency of addressing challenges and concerns regarding the dispute settlement system and to carrying forward discussions with the aim of having a fully and well-functioning dispute settlement system accessible to all members by 2024.

Informal conversations among delegates on dispute settlement reform at the technical level started in April 2022, led by the United States.  In February 2023, Guatemala's Deputy Permanent Representative to the WTO, Marco Molina, began convening an informal negotiating process with members.  Mr Molina has reported back to the Dispute Settlement Body (DSB) on a regular basis regarding the informal process, with reports provided at the March, May, July, October and December 2023 meetings as well as the 26 January 2024 meeting of the DSB.

Since February 2023, members have identified the areas of the dispute settlement system that they seek to reform. All members were invited to submit their ideas for reform, with more than 70 proposals initially put forward.   Most of the proposals seek to improve the dispute settlement system by providing a range of options to 1) resolve disputes; 2) simplify procedures; and 3) make them less costly, more transparent, accountable, and accessible to all members, particularly, to developing and least developed country members.

Other proposals seek to ensure a common understanding of the functioning of the dispute settlement system and provide the necessary incentives to change the behaviours of participants in dispute settlement proceedings, with the objective of focusing on what is necessary to resolve disputes among members. In addition, members began concentrating their efforts on resolving the question regarding the second tier of the dispute settlement system, the appeal/review mechanism. Members also considered the establishment of mechanisms to review the operation of the system and correct any deficiencies that might appear in the future.

Dispute settlement reform was one of the topics discussed at the Senior Officials Meeting on 28 October.  The co-chairs of the meeting, the Director-General and General Council Chairperson, said senior officials strongly supported the ongoing informal process being carried out by technical experts and recognized the value of the process, and the progress made so far, in order to achieve a tangible and meaningful outcome at MC13. 

The senior officials also identified the following elements on the way forward, the co-chairs said:  first, the need to focus on addressing the dispute settlement challenges with a sense of urgency; second, the need to take into account the dispute settlement interests of all members; and third, the need to uphold the WTO member-driven approach as well as to ensure full participation, inclusiveness and transparency.

At the General Council meeting on 14 February, Petter Ølberg, Ambassador of Norway and chair of the Dispute Settlement Body (DSB), reported that members saw great value in the informal process convened by Mr Molina and recognized the significant progress achieved to date.  At the same time, "formalization" of the process - when and how to bring the ongoing informal discussions into a formal setting within the DSB and/or General Council - has been raised by members.  To date, there is no consensus on doing this, with formalization meaning different things to different people, he noted.

The DSB Chair also said the negotiating text that has emerged from the informal process will be part of his report to the General Council and would be circulated after the meeting for transparency purposes.  While considerable work has been done, issues related to appellate review are still being worked on and are not yet complete.  Ambassador Ølberg said he would reach out to delegations before MC13 to see if an agreement on a political message on dispute reform can be transmitted by ministers at MC13.  Such a message could recognize the work already done as a valuable contribution to fulfilling the MC12 commitment and instruct members to continue working on pending issues.

Mr Molina also reported to the General Council meeting on 14 February regarding the informal process.  He noted that the text sent to the DSB and General Council chairs was a seventh iteration running to more than 50 pages.  Discussions regarding the appeal review mechanism are ongoing and aimed at identifying viable solutions, he said, adding that whatever solution emerges will be an integral part of a comprehensive dispute settlement reform package.

The DSB Chair's report to the General Council, which includes Mr Molina's report and the consolidated text on dispute settlement reform emerging from the informal process, is available here.

A draft Ministerial Decision on Dispute Settlement Reform was circulated on 16 February.

MC13 Outcomes

At MC13, ministers adopted a Decision on Dispute Settlement Reform, which recognizes the progress made in the work done so far. It also instructs officials to accelerate discussions, build on the progress already made, and work on unresolved issues, including issues regarding appeal/review and accessibility, to achieve the objective set forth at MC12 of having a fully and well-functioning dispute settlement system accessible to all members by 2024.