By: Robert Manning

What is the kernel of the issue?

The WTO is broken; its critical dispute settlement mechanism trade is at risk. The organization as a whole needs major reform.

Why is the issue important?

Since WWII trade, a rules-based system has been an engine of growth and prosperity. Now, the threat of a fragmented system where power and regional arrangements set the terms of trade, especially in fast growing digital commerce, threatens to undermine economic prosperity.

What is the recommendation?

The Biden administration has taken the first step by unblocking consensus on Ngozi Okonjo-Iweala for the new Director-General. Biden should send the USTR to Geneva to table proposals for reforming the dispute settlement mechanism and consult with EU, Japanese, and other like-minded partners and then form a common, broader reform agenda including revising ‘developing nation status’ for nations like China, and transparency on and opprobrium for excessive subsidies.

Related Experts: Robert A. Manning