The WTO – Crisis and Reform

In an increasingly globalized world, the importance of the World Trade Organization is growing. It is the central multilateral negotiating and decision-making forum for global trade issues. However, the WTO rules are outdated, incomplete and in need of reform. With 166 members, it is not easy to reach a consensus.

The vbw - Bavarian Industry Association appeals to all WTO members to show willingness to reform and to implement these reforms. Two points are particularly urgent for our economy:

Ensure an effective dispute settlement mechanism

The dispute settlement mechanism must be designed in such a way that it aims at a solution accepted by both parties to the dispute, as provided for in the WTO Dispute Settlement Understanding. If legal uncertainty arises on certain issues during the appeal process, these issues must be referred to the WTO committees for further discussion between WTO members. "Authoritative interpretation" should be used in cases where no consensus can be found.

Strengthen competitive neutrality

Competitive neutrality in global trade must be strengthened and trade-distorting effects of industrial subsidies must be prevented. In order to prevent unauthorized subsidies, stricter control regulations must be enshrined in the WTO Subsidies Agreement. The USA, Japan and the EU have submitted joint proposals to this effect (extension of the list of prohibited subsidies, reversal of the burden of proof, incentive for notification of subsidies, restrictions on financial aid from state-owned enterprises). These proposals are appropriate. In addition, the rules on subsidies must apply not only to goods but also to services.