C_2020363EN.01011301.xml

P8_TA(2018)0477

WTO: the way forward

European Parliament resolution of 29 November 2018 on WTO: the way forward (2018/2084(INI))

(2020/C 363/17)

The European Parliament,

—	having regard to the Marrakesh Agreement of 15 April 1994 establishing the World Trade Organisation (WTO),

—	having regard to the Doha Ministerial Declaration of the WTO of 14 November 2001 (1),

—	having regard to its previous resolutions on the WTO, in particular those of 24 April 2008 on ‘Towards a reform of the World Trade Organisation’ (2) and of 15 November 2017 on ‘Multilateral negotiations in view of the 11th WTO Ministerial Conference’ (3),

—	having regard to the Outcome Document adopted by consensus on 10 December 2017 at the Annual Session of the Parliamentary Conference on the WTO in Buenos Aires (4),

—	having regard to the results, which include a series of Ministerial Decisions, of the 11th Ministerial Conference held in Buenos Aires in December 2017, at which it was not possible to adopt a Ministerial Declaration (5),

—	having regard to the 6th Global Review of Aid for Trade, which took place in Geneva from 11 to 13 July 2017 (6),

—	having regard to the UN Sustainable Development Goals (7),

—	having regard to the Paris Agreement within the United Nations Framework Convention on Climate Change (UNFCCC), effective since November 2016,

—	having regard to the latest report of the Intergovernmental Panel on Climate Change, published on 8 October 2018, which shows that limiting global warming to 1,5oC is still possible if countries ratchet up their Nationally Determined Contributions by 2020,

—	having regard to paragraph 16 of the European Council conclusions of 28 June 2018 (8),

—	having regard to the joint statement of the trilateral meeting of the trade ministers of the United States, Japan and the European Union adopted on 31 May 2018 (9),

—	having regard to the joint statement of the 20th EU-China Summit establishing a joint working group on WTO reform chaired at vice-ministerial level (10);

—	having regard to the Commission’s concept paper of 18 September 2018 on WTO modernisation (11),

—	having regard to Rule 52 of its Rules of Procedure,

—	having regard to the report of the Committee on International Trade and the opinion of the Committee on Development (A8-0379/2018),

whereas since its creation, the WTO has played a pivotal role in strengthening multilateralism, promoting an inclusive world economic order and fostering an open, rules-based and non-discriminatory multilateral trading system; whereas developing countries now account for about half of world trade, up from 33 % in 2000, while the number of people living in extreme poverty has been cut by half since 1990, to just under one billion; whereas the WTO is built upon a system of rights and obligations, which obligates members to open their own markets and not to discriminate;

B.	whereas the WTO should remain the main point of reference for governments and businesses in rule-setting and trade disputes;

whereas the EU has consistently advocated a strong multilateral and rules-based approach to trade, as the EU economy, and workers and consumers in the EU and its partners, are increasingly integrated with global value chains and depend on predictable developments in international trade for both imports and exports and in social and environmental conditions;

D.	whereas the results of the 11th WTO Ministerial Conference in Buenos Aires in December 2017 were disappointing, and clearly showed that the negotiating function of the organisation is paralysed;

whereas the rules-based multilateral trading system is facing its deepest crisis since the creation of the WTO, threatening the basic functions of the organisation, namely setting the essential rules and structure for international trade and delivering the most effective and developed dispute settlement mechanism of any multilateral organisation;

F.	whereas despite important exceptions such as the Trade Facilitation Agreement, WTO trade reform has lagged since the 2000s;

whereas the Appellate Body is the ‘jewel in the crown’ of the WTO owing to the binding character of its decisions and its status as an independent and impartial review body; whereas the Appellate Body’s membership fell to the minimum number of judges it needs to function after the ending of the term of Judge Shree Baboo Chekitan Servansing, leaving only three judges appointed; whereas this deadlock, caused by the US administration, could lead to the collapse of a system that is essential to managing disputes among all WTO members;

Reiterates its full commitment to the enduring value of multilateralism, and calls for a trade agenda based on fair and rules-based trade for the benefit of all, which contributes to peace, security and the sustainable development agenda by including and enhancing social, environmental and human rights, and ensuring that multilaterally agreed and harmonised rules are uniformly applied to all and effectively upheld; stresses that the WTO must also contribute to promoting fair trade and combating unfair practices; underlines that trade is not an end in itself but a tool for reaching globally defined development goals;

Considers that it is now a matter of urgency to proceed to the modernisation of the WTO, in the light of the latest developments but also owing to the long-standing lack of progress on the Doha Development Agenda (DDA), and to fundamentally review several aspects of the WTO’s functioning with a view to increasing both its effectiveness and its legitimacy; considers it essential, in this perspective, for the WTO Secretariat to create opportunities for all WTO members to be involved in the debate from the beginning; calls on the Commission and the EU Member States in the WTO to reach out to other WTO members, in particular our major trading partners such as the US, Japan, China, Canada, Brazil and India, in order to agree on common positions; is encouraged by the initial statements from the EU-China summit regarding the reform of the WTO;

Welcomes in this regard the mandate given by the European Council to the Commission on 28-29 June 2018, and takes note of the approach outlined in the conclusions, as well as of the Commission's concept paper on WTO modernisation of 18 September 2018 and Canada’s proposals for WTO reform of 25 September 2018; looks forward to the publication of more proposals, especially from developing countries, as well as from working groups already established among WTO member states;

Expresses its utmost concern over the fact that only three posts on the Appellate Body are filled, thus severely undermining the current and proper functioning of the dispute settlement process, and calls firmly on the US to resolve this situation in a way that allows for the vacant Appellate Body seats to be filled expeditiously; welcomes the initial proposals put forward by the Commission in its concept paper on WTO modernisation to resolve the deadlock by addressing some of the concerns that have been raised, including through transitional rules for outgoing members or changes to the length of terms on the Appellate Body or to the maximum time allowed before the publication of a report, as well as to the setting of new case-law by the Appellate Body; notes that the concerns expressed by the US regarding the Appellate Body extend beyond procedural changes and entail significant reforms to the rulings of the body’s judges;

Views the decision of the US to impose tariffs on steel and aluminium products on 31 May 2018 on grounds of ‘national security’ under Section 232 of the Trade Expansion Act of 1962 as unjustified and considers that it fails to address the challenge posed by excess steel in global markets and does not comply with WTO rules; strongly encourages the Commission to work with the US to address trade disagreements and remove barriers to trade within the WTO’s rules-based dispute settlement framework;

Is of the view that, as a way to address the root causes of the current crisis, it is necessary for the WTO to adapt to a changing world while delivering on some of the outstanding issues of the DDA, especially regarding food security; considers that it is therefore necessary:

to address current gaps in the rulebook in order to level the playing field as regards market-distorting subsidies and state-owned enterprises, as well as to keep intellectual property protection and investment market access up to date; also to address issues of protection and forced source code disclosure and other state- directed activities giving rise to overcapacities, as well as regulatory barriers to services and investment including technology transfers, requirements of joint ventures and local content requirements; and to monitor the implementation, administration and operation of existing agreements;

b)	to create the necessary regulatory framework to cope with technological developments by covering e-commerce, global value chains, public procurement, updated domestic regulation for services, and micro, small and medium-sized enterprises (MSMEs);

c)	to master the most pressing global environmental and social challenges, ensuring systemic policy coherence between trade, labour and environmental agendas;

d)	to welcome in this regard, the joint statements that were adopted in Buenos Aires on e-commerce, domestic regulation, investment facilitation and women’s economic empowerment, as well as the work that has been done on these issues since then;

Stresses that the EU should emphasise its rules on privacy and data protection so that they may be promoted at international level and become a benchmark for the development of international and multilateral standards;

Recalls that access to public procurement is one of the European Union's priorities in its trade negotiations and that, in this sense, the fulfilment of the commitments of WTO members to join the Government Procurement Agreement (GPA) and improvements in the functioning of and respect for the provisions of this agreement are expected in a spirit of reciprocity and mutual benefit; notes that the full effectiveness of potential improvements in the state aid framework and the role of public enterprises partly depends on progress in this area; calls on the Commission to work with those members who are in the process of acceding to the GPA to accelerate their efforts in order to extend the benefits of procurement liberalisation among WTO members;

Is convinced that the current differentiation between developed and developing countries does not reflect the economic reality and the effective situation in the WTO, and that this has been an obstacle to advancing the Doha Round, to the detriment of countries most in need; urges advanced developing countries to take up their share of responsibility and make contributions commensurate to their level of development and (sectoral) competitiveness; notes that the Commission’s concept paper calls for rules under which developing countries will graduate from their low-income status as they grow richer; believes the special and differential treatment (S&DT) mechanism should be re-examined in order to better reflect human development indexes, as a policy tool enabling developing countries to link implementation of multilateral agreements with receiving assistance from richer countries and donor organisations;

10.

Strongly welcomes the ratification by two thirds of the WTO membership of the Trade Facilitation Agreement (TFA) in February 2017; is convinced that the TFA sets an important example and could provide a model for future WTO deals, taking into account the differences in the development status and needs of the WTO’s members; encourages WTO members to take responsibility and maintain their commitments in accordance with their real economic power and capabilities; considers that the next challenges will be the full ratification of the agreement, especially by the African members who are expected to benefit the most from the agreement, the effective implementation of the TFA, and the notification of development assistance under the agreement;

11.

Acknowledges that on the whole China’s accession to the WTO in 2001 has increased access to its domestic market, which has benefited the global economy; is concerned that China does not apply the spirit and principles of the WTO’s tenets of national treatment;

12.

Takes the view that it is necessary to revise the functioning of the negotiating process by introducing more flexibility than has currently been the case under the consensus rule, while recognising that the Single Undertaking approach has limited the effectiveness of multilateral trade governance; express its support for the concept of flexible multilateralism, whereby WTO members interested in pursuing a certain issue where full consensus is not yet possible should be able to advance and conclude plurilateral agreements, either through so-called WTO Annex 4 agreements, in accordance with Article II:3, Article III:1, and Article X:9 of the Marrakesh Agreement, or via ‘critical mass’ agreements that extend negotiated concessions to the WTO membership on a most-favoured-nation (MFN) basis; encourages the Commission not to use these articles as an alternative to constructive dialogue with WTO members to address barriers to trade and reform of the WTO and its functions; considers in this regard that its members should boost the WTO’s capacity-building to ensure that it is equipped with financial and human resources in accordance with expanded needs so as to maintain the same quality of work; believes that, in general, the monetary contributions of new members should increase the WTO’s budget and not lead to lower membership fees for existing members;

13.

Recognises that while rules-based multilateralism remains the key part of the WTO’s structure, there are possibilities for deeper and more flexible plurilateral cooperation among interested states in areas where consensus has proven difficult to achieve; notes that such agreements must complement and not undermine the multilateral agenda and should be used not as alternative fora to address trade barriers, but rather as stepping-stones towards progress at the multilateral level; calls for the resumption of plurilateral negotiations for the Environmental Goods Agreement (EGA) and the Trade in Services Agreement (TiSA), and asks for special rules for SMEs in plurilateral and multilateral agreements; stresses the importance of the WTO continuing and deepening its work in international cooperation with other international organisations such as, but not limited to the UN, the OECD, the WCO, and the ILO;

14.

Stresses the role that trade can and must play in contributing to development and the achievement of the 2030 Sustainable Development Goals (SDGs) and of the Paris Agreement commitments in the fight against climate change; regrets that the EGA was blocked in 2016 and recalls its potential to provide greater access to green technologies and help meet the above-mentioned commitments; underlines that beyond the negotiations on fisheries subsidies, the WTO must now define the more concrete action that needs to be taken in this regard to protect marine life; recalls that the WTO concept of Process and Production Methods (PPM) offers possibilities to differentiate among so-called ‘like-products’ for their environmental impact; suggests revitalising the WTO’s Committee on Trade and Environment (CTE), with the mandate of drawing up criteria for combating environmental free-riding and establishing closer links to the UNFCCC Secretariat;

15.

Reaffirms the links between gender equality and inclusive development, as also expressed in SDG 5, emphasising that women’s empowerment is key to the eradication of poverty and that removing barriers to women’s participation in trade is critical for economic development; welcomes the increased focus of the WTO on issues related to trade and gender, and encourages all 121 signatories to the 2017 Buenos Aires Declaration on Trade and Women’s Economic Empowerment to deliver on their commitments; emphasises the need for a systemic gender approach to all fields of WTO rule-making in the form of gender-specific impact assessments; notes the importance of initiatives such as SheTrades in highlighting the positive role of women in trade and encouraging greater participation of women in international trade around the world;

16.

Draws attention to the conclusions of the 6th Global Review of Aid for Trade, held in Geneva in July 2017, entitled ‘Promoting Trade, Inclusiveness and Connectivity for Sustainable Development’; supports the view that this should be translated into concrete action in order to facilitate e-commerce and turn digital opportunities, such as blockchain, into trade realities, for developing countries as well; notes in this regard that investment in both physical and digital infrastructure, as being crucial to achieving progress in this area, remains a key challenge; calls, therefore, on WTO members to promote investment in both physical and digital infrastructure, encouraging, among other initiatives, public-private partnerships;

17.

Reiterates its call for the EU to ensure that its activities with developing countries, in the areas of both development and trade, are based on a balanced framework among equal partners, are aligned with the principle of Policy Coherence for Development established in Article 208 of the Treaty on the Functioning of the European Union, and are aimed at the promotion of and respect for human rights;

18.

Regrets that the WTO’s 11th Ministerial Conference did not secure progress on issues of key importance to developing countries; welcomes, however, the enhanced preferential treatment previously secured at the WTO for least-developed countries (LDCs), including preferential rules of origin and treatment for service providers, and emphasises the need to undertake capacity building measures that would allow suppliers from LDCs to benefit from the LDC services waiver;

19.

Stresses that transparency is a key element in ensuring a stable and predictable trading and investment environment; believes it is important to enhance the transparency of monitoring procedures by increasing incentives for WTO members to comply with notification requirements, reducing their complexity and burdens and by providing capacity-building if needed, while wilful non-compliance should be discouraged and challenged;

20.

Stresses that the role of the WTO Secretariat in facilitating and safeguarding a bottom-up approach for the active participation of all members is critical and that it should be further strengthened and made more flexible in support of various negotiating processes, as well as in implementation and monitoring functions; considers it necessary to strengthen the financial and human means and resources available to the WTO Secretariat, and urges WTO members to mutually fulfil their responsibilities in this regard; expresses the view that the regular work of the WTO committees should also be revitalised by giving their chairs a more active role in developing and proposing solutions and compromises, thus going beyond simply moderating the contributions of members, and that this extended task should be supported by the Secretariat;

21.

Urges the WTO members to ensure democratic legitimacy and transparency by strengthening the parliamentary dimension of the WTO, and to support a memorandum of understanding establishing a formal working relationship with the Parliamentary Conference on the WTO; stresses, in this regard, the need to ensure that parliamentarians have full access to trade negotiations and are involved in the formulation and implementation of WTO decisions, and that trade policies are properly scrutinised in the interests of their citizens;

22.

Instructs its President to forward this resolution to the Council, the Commission, the governments and parliaments of the Member States, and the Director-General of the WTO.

(1) Doha Ministerial Declaration (WT/MIN(01)/DEC/1) of 14 November 2001 — https://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_e.htm

(2) OJ C 259 E, 29.10.2009, p. 77.

(3) Texts adopted, P8_TA(2017)0439.

(4) http://www.europarl.europa.eu/pcwto/en/sessions/2017.html

(5) https://www.wto.org/english/news_e/news17_e/mc11_10dec17_e.htm

(6) https://www.wto.org/english/tratop_e/devel_e/a4t_e/gr17_e/gr17programme_e.htm

(7) http://www.un.org/sustainabledevelopment/sustainable-development-goals/

(8) http://www.consilium.europa.eu/en/press/press-releases/2018/06/29/20180628-euco-conclusions-final/

(9) http://trade.ec.europa.eu/doclib/docs/2018/may/tradoc_156906.pdf

(10) https://www.consilium.europa.eu/media/36165/final-eu-cn-joint-statement-consolidated-text-with-climate-change-clean-energy-annex.pdf

(11) http://trade.ec.europa.eu/doclib/docs/2018/september/tradoc_157331.pdf