Mounting trade tensions, an increase in trade-restrictive measures and continuing economic uncertainty created real challenges for world trade in 2018. These factors and a deceleration in overall economic activity slowed momentum in global trade, restricting merchandise trade growth to 3 percent compared with 4.6 per cent in 2017. This downward trend is expected to continue in 2019, with trade projected to grow by just 2.6 per cent. If trade growth is to bounce back in 2020, it is vital we resolve tensions and create an environment where trade can play its full part in driving economic growth and reducing poverty.
To chart a positive path forward for world trade, WTO members are discussing ways to strengthen the trading system to enable it to better respond to the challenges of today’s economy, including rapid technological change which is creating huge shifts in patterns of employment. G20 leaders emphasized the need for reform of the multilateral trading system at their summit in Buenos Aires in December, while also underscoring the system’s vital importance.
Different approaches to improving the functioning of the WTO are under discussion, including improving members’ compliance with obligations to submit information on their trade policies and practices in a timely fashion. Members are also seeking more effectively to address trade-distorting practices, such as subsidies, and to address issues in the Appellate Body, an essential component of the WTO’s dispute settlement system.
The current impasse in the process for appointing Appellate Body members is putting the dispute settlement system under severe strain. WTO members are actively submitting proposals to address the impasse and to improve the system. If a solution is not found by December, due to the expiration of two Appellate Body members’ terms the number of sitting members would fall to one, and the Appellate Body would no longer be able to hear appeals. The importance of finding an urgent resolution to this situation cannot be overstated.
Another area of discussion among members is how to improve trade negotiations at the WTO so that we can keep delivering new agreements and build on recent successes, such as the landmark Trade Facilitation Agreement, the abolition of agricultural export subsidies, the expansion of the Information Technology Agreement, and a number of positive steps for least-developed countries and food security concerns.
[To read the original report, click here]
Copyright © 2019 World Trade Organization. All rights reserved.