Functioning of the WTO: Mapping the Challenges and Asking the Hard Questions

Abstract

The World Trade Organization was created at the end of the Uruguay Round negotiations, and became operational in 1995. Its creation led to a deepening of trade concessions, and the organization provided Members with a highly legalized dispute settlement system to support implementation. As a result of this move towards market integration and legalization, many new actors brought
their issues and concerns to the WTO. However, perceptions of its role and impact have changed. Today the organization risks becoming marginalized in providing regulatory solutions, as trade negotiations have moved from the multilateral level to regional-, plurilateral-, and bilateral-level forums. “The balance of power” has shifted towards emerging markets. The Doha Round impasse has less to do with transatlantic differences than with highly industrialized countries and large developing countries disagreeing over the degree of market access and protection for vulnerable sectors of the economy. The preferential trade agreement landscape offers a challenge to the organization. If countries improve selected market access through small group deals, the appetite for negotiating ambitious multilateral solutions might decrease. This “new regionalism” will require a different response from the WTO.
This background paper presents some of the key challenges in governing the WTO system and focuses on the negotiation function of the organization, the role of the Committees, and the interaction between the WTO system and the business sector. It is meant as a document to be used to take stock and to launch debates about reform in these three areas.