WTO's long-term development prospects buoyed by MC12

The World Trade Organization's 12th Ministerial Conference (MC12) was recently held in Geneva, Switzerland, with agreements reached on a series of key trade initiatives such as fisheries subsidies, health and pandemic response, e-commerce, food security, environmental sustainability and services domestic regulation. Against the backdrop of the complicated international situation, these outcomes have given a strong boost to the international community's confidence in the organization's long-term development.

In the face of multiple crises including geopolitical conflicts, the COVID-19 pandemic, food shortages and surging inflation, safeguarding the global multilateral framework is still a consensus among the vast majority of WTO members.

In intensive final negotiations over fisheries subsidies, most WTO member economies, with the bigger picture in mind, made coordination and concessions with each other, finally reaching a decision that all parties agreed upon. The Agreement on Fisheries Subsidies is the first new multilateral deal successfully negotiated under the WTO since the landmark Trade Facilitation Agreement in 2013, marking an important outcome following 21 years of negotiations over fisheries subsidies.

Currently, the WTO is striving to go beyond traditional trade issues and focusing on trade settlement models under new circumstances. The inclusiveness of the multilateral trading system has been manifested with more attention paid to issues involving developing countries and sustainable growth.

To enhance efficiency and promote updated international trade rules, the WTO is using more flexible measures such as plurilateral trade negotiations and the issuance of joint statements to more effectively advance multilateral trade negotiations and to reshape its leading role in global trade. Since October 2021, participating members of the WTO have issued the Joint Statement on Investment Facilitation for Development, Joint Initiative on Services Domestic Regulation, and Joint Initiative on E-commerce, representing the latest progress in these areas and injecting fresh momentum into the organization's development.

The three pillars of the WTO are multilateral trade negotiations, dispute settlement and the trade policy review mechanism. From a long-term perspective, the global trading system has its limitations and core issues related to WTO institutional reforms can hardly make breakthroughs over a short period of time.

The most pressing task is to break the impasse of the suspension of the Appellate Body and resume the WTO's dispute settlement mechanism. As a matter of fact, prior to the MC12, many members had submitted statements to the WTO Secretariat, expressing their shared aspiration for an early resumption of the dispute settlement mechanism. India, Pakistan, Sri Lanka and 44 African countries issued a joint statement, calling for accelerating WTO reforms and urging members to reach a consensus on the resumption of a multilaterally participated dispute settlement mechanism and improvement of the WTO's trade policy monitoring at an early date.

The WTO's difficulties have much to do with the United States. The US has, for the 54th time, blocked a proposal to commence the selection process to fill vacancies on the Appellate Body, obstructing the normal functioning of the WTO and severely undermining the organization's core functions.

The WTO's trade policy review mechanism is also facing new challenges. The fisheries subsidies deal reached at the recently concluded MC12 is different from previous preferential tariff reduction agreements as it involves more behind-the-border measures, imposing strict restrictions on a country's domestic industrial policies and environmental protection policies and putting forward higher requirements for all countries' trade policy transparency. Furthermore, if a country violates WTO rules with overfishing and other behaviors damaging the sustainable development of global fisheries, it will have a direct negative impact on the country's ocean environment and fishery development and indirect impact on other countries and the world at large.

As the world's second-largest economy and biggest developing nation, China will play an increasingly important role in the WTO's long-term development.

To start with, China has been an active participant, staunch supporter and major contributor in the multilateral trading system. Since its accession to the WTO in 2001, China has firmly upheld the WTO rules and earnestly fulfilled its commitments upon entry into the WTO. The WTO has thus far carried out eight trade policy reviews for China, with members widely commending China's role and performance. China has not only fulfilled its commitments to the WTO in trade and investment facilitation including tariff reduction and market opening-up, but also is playing a positive role in new trade issues such as The Expansion of the Information Technology Agreement, trade facilitation agreement, and investment facilitation.

Second, China is an important participant of and policy coordinator in the global economic governance system. As an important member of the G20 and BRICS, China has deeply integrated into the global economic governance system, maintaining good interactions and policy communications with its trading partners. As an active coordinator, China advocates the WTO not being politicized. It advocates safeguarding the WTO-centered multilateral trading system, supports free trade, opposes abuse of "national security" as an excuse for levying high tariffs on other members and imposing discriminative investment restrictions. Furthermore, China advocates rules-based WTO reform to push the multilateral trading system toward a more free, open, fair and inclusive direction for development.

Lastly, China is a provider of public goods in global economic and trade governance. China aims at building an institutional open economy, with wider-range, broader-scope opening up at a higher level. As the world's second-largest economy, China's further opening-up is bound to accelerate the process of economic globalization and trade liberalization. China is stepping up efforts to expand its free trade agreements network with trading partners across the world. The country has ratified the Regional Comprehensive Economic Partnership agreement and the implementation of the RCEP agreement is well underway. It has applied to join the Comprehensive and Progressive Agreement on Trans-Pacific Partnership, and the Digital Economy Partnership Agreement. Such high-standard regional and bilateral trade agreements will pave the way for WTO's long-term development.

Chinese solutions and Chinese wisdom－such as the China-proposed APEC Connectivity Blueprint 2015-2025 in Digital Era and "BRICS+" cooperation model－have become public goods offered by China for improving global economic governance, effectively making up for deficits in global governance, trust, peace and development.

Such proposals highlight China's promotion of an inclusive multilateral trading system that is manifested with more attention paid to the sustainable growth of developing countries. The WTO has 164 member economies and their combined trade volume accounts for 98 percent of the world's total, making the organization the most representative one in the global trade. Therefore, its efficient functioning is vital to facilitating the smooth operation of the global trade system and coping with crises.

The author is an assistant research fellow with the Institute of World Economics and Politics at the Chinese Academy of Social Sciences. The author contributed this article to China Watch, a think tank powered by China Daily.

The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn