Act of faith

China can assume an important role in breaking the deadlock in the WTO decision-making to restore belief in the multilateral trading system

The COVID-19 pandemic continues to have an effect on the World Trade Organization. Because of the emergence of the Omicron variant of the virus, the 12th WTO Ministerial Conference that was originally scheduled for this year has been postponed again.

The conference is held every four years with the aim of improving the multilateral trading system, as, in recent years, the increasing number of WTO members and their growing divergences have posed challenges to its decision-making mechanism.

Once the WTO moves away from consensus-based decision-making, major powers will again play a leading role as they did during the General Agreement on Tariffs and Trade era. Besides, the WTO has a one-vote veto system that deadlocks multilateral negotiations. Severe defects in package negotiations have also been exposed. While the mode is conducive to balancing and exchanging interests in and between members, years of negotiations are at a stalemate for it is time-consuming and hard to reach a consensus. Moreover, the WTO Appellate Body and the dispute settlement mechanism face uncertainties.

Obstructed by some countries, the Appellate Body has been paralyzed and the dispute settlement mechanism exists in name only.

This year marks the 20th anniversary of China's accession to the WTO. Over the past two decades, China has supported the multilateral trading system and followed its rules. It should play an active role in resolving the current deadlock.

The easy issues should be tackled first. Since WTO reforms are complicated and time-consuming, all sides should jointly send a positive signal to support the multilateral trading system to restore the confidence of the international community in WTO mechanisms. The immediate priorities for negotiations are anti-pandemic cooperation and the restoration of the Appellate Body, although efforts are also needed to drive progress on issues that have been agreed upon by all sides, such as an agreement on fisheries subsidies.

China has fulfilled its commitment of making COVID-19 vaccines a global public good. It supports the WTO's decision on exempting certain intellectual property rights for anti-pandemic supplies including vaccines, and has participated in the council's discussions for the Agreement on Trade-Related Aspects of Intellectual Property Rights to increase vaccine output and promote their fair distribution.

China has also established a multi-party interim appeal arbitration arrangement with dozens of other members to restore the selection process of judges to the WTO's Appellate Body and maintain its two-tier dispute settlement mechanism.

As the first WTO negotiation on sustainable development, the fisheries subsidies negotiation has lasted for 20 years. As a major fishing country, China has participated in the negotiations, assumed international obligations within its capabilities, and contributed to promoting the completion of negotiations on schedule.

Efforts are also needed to reach more consensus through open plurilateral negotiations, which are an innovative measure taken by China to address the deadlock of WTO negotiations, and put forward new negotiation issues. China has initiated proposals including the Friends of Investment Facilitation for Development and plastic pollution prevention and control, which involve more than 100 and 60 members, respectively. The proposals have upgraded WTO rules and injected impetus into multilateral negotiations. Inspired by China, many countries have initiated plurilateral proposals on e-commerce and service trade negotiations.

The open plurilateral negotiations on investment facilitation for development, led and promoted by China, are one of the most promising results of the WTO Ministerial Conference. As a coordinator of the FIFD, which comprises 14 developing and least-developed country members, China has been stressing that it will further intensify outreach efforts toward other WTO members, including non-participants. As important supplementary mechanisms to the package of multilateral negotiations, open plurilateral negotiations have addressed some problems in the WTO's current decision-making mechanism by reaching Critical Mass Agreements and implementing the agreements based on most-favored-nation treatment.

Open plurilateral negotiations also provide WTO members with greater leeway. All sides have the right to participate in negotiations on specific issues or withdraw midway.

With the Doha round of trade talks deadlocked, it has become difficult for WTO members to reach agreements on major issues over the past 20 years. Meanwhile, regional free trade agreements have become effective supplements to the multilateral trading system. China has signed 19 FTAs with 26 countries and regions, and is promoting high-standard implementation of the Regional Comprehensive Economic Partnership agreement and has made an official application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Although the opening-up level of FTAs is higher than that of the WTO, issues such as agricultural subsidies and public storage for food security can only be resolved within the multilateral trading system. China's negotiation, signing and implementation of more high-standard FTAs can help build an international consensus in support of the multilateral trading system, facilitate international trade and investment between countries that sign agreements, and promote new issues and rules to be included in WTO negotiations. The move can also ease external pressure caused by FTAs on the multilateral trading system and enhance the authority and effectiveness of the WTO.

The multilateral trading system with the WTO at its core is key to economic globalization and common development. As a large and responsible developing country, China should continue to actively participate in WTO negotiations and maintain its major status in the formulation of international rules for the multilateral trading system. It should seek to play a greater role in combating the pandemic, uphold multilateralism, and build an open world economy. It also needs to support the inclusive development of the multilateral trading system, boost the protection of the rights and interests of developing countries, defend the core values of inclusiveness and non-discrimination in the multilateral trading system, and contribute to delivering the benefits of WTO reforms to all members.

The author is an assistant researcher 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.