   
  
WT/GC/W/864  
 
22 February 2023  
(23-1256) Page: 1/5 
General Council  Original: English  
 
 
REINFORCING THE DELIBERATIVE FUNCTION OF THE WTO TO RESPOND TO GLOBAL 
TRADE POLICY CHALLENGES  
COMMUNICATION FROM THE EUROPEAN UNION  
The following communication, dated 20 February 2023, is being circulated at the request of the 
delegation of the European Union.  
 
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1  CONTEXT AND EU VISION FOR WTO REFORM  
1.  The GATT/WTO has been one of the most successful international organisations over its seventy -
five years of existence, providing a rules -based international system th at has been a key driver of 
global prosperity and poverty reduction.1 In recent years, however, the WTO 's effectiveness has 
been eroded, on account of a paralysed dispute settlement system, limited progress in its rule -
making function and insufficient cap acity to address new pressing global challenges. For the 
European Union, the 13th Ministerial Conference (MC13) will be a critical milestone in the process 
towards improving these three functions and delivering a balanced and meaningful package of 
concrete  outcomes will be key. To achieve this, work will follow different workstreams.  
2.  Having a fully -functioning dispute settlement system is the European Union 's number one reform 
priority for MC13 and the European Union is fully engaged in the ongoing process on that issue. With 
regard to rule -making, the WTO must also build on recent progress in multilateral and plurilateral 
negotiations and reach ambitious outcomes in ongoing work. The development dimension also 
remains a central objective that needs to be in corporated in the reform discussions under each of 
the core functions. Going forward, the European Union will be feeding these different tracks and 
processes with further ideas and contributions.  
3.  This paper is focused on the deliberative function as the th ird vital pillar of WTO reform. The WTO 
today faces an increasingly diverse set of global challenges and demands. These include rising 
geopolitical tensions, the increased role of the state in the economy of various WTO Members 
pursuing active industrial p olicies, the green and digital transitions, the need for a better integration 
of many developing countries - notably least -developed countries (LDCs) - into global value chains, 
the importance of inclusive domestic policies to maintain support for trade op enness, and the impact 
of food and agriculture policies on food security and sustainability.  
4.  The WTO remains a vital institution; the guarantor of rules -based open trade and a guardrail 
against the risk of an increasingly fragmented economic order. If the WTO is to maintain this central 
role in the global trading system, however, Members will need to work together to address the trade -
related aspects of these global challenges. Finding itself at their interface, the WTO uniquely has the 
potential capacity t o formulate responses, not only by reinvigorating the functions of dispute 
resolution and negotiation but also that of monitoring and deliberation.  
5.  The objective of this paper is to propose three thematic areas where enhanced deliberative 
engagement would strengthen the relevance of the organisation and better equip its membership to 
respond to global challenges, while incorporating the development di mension, which is relevant in 
all areas: i) trade policy and state intervention in support of industrial sectors; ii)  trade and global 
 
1 According to the World Bank, global poverty fell from 36 to 9 per cent from 1997 to 2017.  WT/GC/W/864  
 
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  environmental challenges; and iii) trade and inclusiveness. Alongside the essential work on dispute 
settlement and new ru le-making, the European Union believes that the WTO must re -establish itself 
as a forum for more meaningful policy deliberations in areas that impact global trade and policy 
making.  
2  A REINVIGORATED DELIBERATIVE FUNCTION  
6.  The European Union welcomes the vari ous reform efforts that have been initiated, including  
bottom -up work underway to increase transparency and efficiency in subsidiary bodies and the 
Council for Trade in Goods (CTG) to improve the practical functioning of committees (e.g. planning 
of meetin gs, agenda -setting, digital tools, transparency and notification requirements ). The ongoing 
discussions in the appraisal of the Trade Policy Review Mechanism (TPRM)2 offer further important 
elements for improved deliberation and monitoring in the WTO. The  EU looks forward to engaging 
further with other Members on this work.  
7.  Reinvigorating the deliberative function goes beyond these essential procedural improvements 
however, and would contribute towards demonstrating the organisation 's relevance and restore  the 
WTO as the key international forum for global trade governance. It could also in certain cases act 
as a bridge towards possible rule -making where Members consider this an appropriate way forward 
once deliberation has helped them identify the issues an d the best ways to deal with them. For a 
variety of reasons, the deliberative function has been underperforming in recent years and effective 
engagement by Members has been challenging. As part of the Committee work, deliberation per se 
has been overshadow ed by monitoring Members ' compliance with rules and obligations.  
8.  The objectives  and means  under a reinvigorated deliberative function could be to:   
• improve the understanding  of new trade policy challenges through the sharing of 
information , including background analysis  and research by the WTO Secretariat;  
• identify best practices  and the sharing of experiences  through the increased use of 
informal meetings, thematic  sessions,  enhanced cross -committee  coordination and 
joint sessions to leverage in -house expertise;  
• develop non-binding instruments,  such as non -binding principles, guidelines and 
recommendations,  to facilitate the implementation of existing trade agreements, to ass ist 
developing countries in such implementation or to respond to new global trade policy 
challenges; and  
• assess the scope for convergence  on issues not yet sufficiently addressed by the WTO and 
to consider elements for a response, including the possibility , where appropriate, of rule 
making . 
 
2.1  Trade policy and state intervention in support of industrial sectors  
9.  State intervention in the economy, including in the form of subsidies, is considered by many 
Members a necessary component of the policy response fo r achieving legitimate priority objectives. 
Under certain conditions, well -designed subsidies make an important contribution to achieve the 
climate transition and other environmental goals. Certain subsides can, however, have a detrimental 
impact on both t rade and on the protection of the environment. The rules of the WTO are not 
sufficiently effective in tackling the negative external spill -overs of state intervention in the economy. 
Lack of transparency of some interventions aggravates the problem. As a r esult of these negative 
spill-overs, there are growing tensions in international trade. If these tensions are left unaddressed, 
we risk a further weakening of the rules -based order. In particular, there is a risk that lack of 
transparency of state interven tion and subsidy races increase trade conflicts, undermine the 
cooperation that is necessary to achieve the climate transition, and harm the interests of developing 
countries.  
10.  The recent joint subsidies report by the four International Organisations3 recommended 
increased international cooperation as a way to resolve or pre -empt such trade tensions. It is worth 
 
2 The European Union contributed with a Communication in RD/TPR/1503*.  
3 "Subsidies, Trade, and International Cooperation " prepared by staff of IMF, OECD, World Ban k, and 
WTO, April 2022.  WT/GC/W/864  
 
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  following up on this useful report and exploring the feasibility of launching enhanced deliberations 
on the interaction between trade and state int ervention in the economy.  
11.  The WTO, through its deliberative function and broad membership, can be the place for such 
discussions, in view of establishing an international consensus on what are the acceptable 
parameters for countries ' interventions in suppo rt of industrial sectors and their impact on trade.  
12.  While the improvement of WTO rules may be a possible outcome in the longer term, the more 
immediate focus of deliberations should be on achieving a better understanding of the interface 
between trade and state intervention in support of industrial sectors and on identifying possible gaps 
in the current rules.  
13.  The aim of the deliberations should be to provide more transparency  on support schemes and 
other forms of state intervention, looking beyond the leg al characterisation of whether a particular 
measure may qualify as a subsidy under WTO law or not. It should include the activities of State -
owned enterprises. The deliberations would consider the design  of measures in a way that minimises 
negative spill -overs to other WTO Members and would give particular attention to the green 
dimension, notably the positive and negative impacts of industrial subsidies on both trade and the 
environment. They could also consider the role of support to industrial sectors in  promoting 
development , notably the positive and negative spill -overs on developing countries.   
14.  The deliberations should focus on support measures aimed at industrial sectors, complementing 
the mandated work on further reductions of trade distortive agricu lture support (Committee on 
Agriculture Special Session) and the phase 2 of the fisheries subsidies negotiations.  
15.  MC13 in February 2024 could, based on consensus by the membership, establish a Member -
driven dedicated space to conduct these discussions, in a form to be decided within the WTO, with 
a report and recommendations to be presented to MC14. MC14 would decide on the most appropriate 
way to follow up on the deliberations. Deliberations would be based on submissions from Members, 
with inputs from inte rnational organisations, academics, businesses, NGOs and think -tanks.  
2.2  Trade and global environmental challenges  
16.  There is a growing interest of Members for environment and climate to figure more prominently 
on the WTO agenda. Members are increasingly steppi ng up national policies and measures to 
respond to climate and other global environmental challenges, such as climate change, loss of 
biodiversity and pollution. There is a need to increase awareness about the way in which such 
measures are designed and of  their impact on international trade. Increased transparency, dialogue 
and enhanced cooperation should be encouraged, as the WTO cannot ignore this crucial debate given 
its scale and urgency. Inclusive cooperation on trade -related environmental measures ca n also help 
to prevent trade conflicts.  
17.  The European Union proposes to reinforce deliberation on trade and global environmental 
challenges in the Committee on Trade and Environment (CTE), so that it becomes the key global 
forum for transparency, coordinat ion and policy dialogue on trade -related environmental measures. 
This could cover engagement on trade -related environmental measures, the relationship between 
trade and the implementation of multilateral environmental agreements, and the promotion of 
susta inable development through trade.  
18.  One objective of deliberation in this area would be early and voluntary information exchange  
by Members on their environmental measures that have an impact on trade. The discussions could 
focus on policy objectives and opt ions in the design of measures that maximise climate and 
environmental benefits while minimising trade -restrictive impacts. These exchanges could also cover 
the implementation phase of measures. While recognising the complex nature of some of these 
debates , the European Union intends to continue to feed into this crucial work through its current 
practice of offering transparency and discussion on its own climate -related Green Deal measures 
(e.g. the Carbon Border Adjustment Mechanism (CBAM), Regulation on d eforestation -free supply 
chains, Eco -Design for Sustainable Products Regulation, etc.).  
19.  A further objective would be an expanded role for thematic deliberations  in the CTE. One 
area of work could be deliberation on technical  methodologies . This could include discussion on ways WT/GC/W/864  
 
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  to measure the embedded emissions of internationally traded products and on identifying ways to 
facilitate compliance of developing members.  Another topic could be circular economy,  including  
cross-border trade in reus able or repairable products with the aim of identifying best practices. 
Discussions could also be centred on a particular topic such as deforestation , and focus on the range 
of measures taken by various Members with the aim of identifying best practices. A s regards 
subsidies , the CTE could provide input to the work to be carried out in the Member -driven dedicated 
space on trade policy and state intervention in support of industrial sectors and for the protection of 
the environment (see section 2.1. above).  
20.  To strengthen the inclusive nature of the deliberative work and given the interlinkages 
between development and environmental challenges , there is a need to reinforce the capacity  
of all Members, including developing and least developed countries, to take part in the debates. 
Developing countries often face challenges in participating in such discussions due to lack of 
resources and technical expertise. The CTE should identify ways of providing technical assistance 
and capacity building to strengthen their participation and ensure their perspectives and needs are 
taken into account. T he CTE could also work on identifying means to support developing countries 
in the challenges they may face in complying with trade -related climate  and environmental  
measures.  Developing -country Members and donors could present relevant technical assistance and 
capacity -building activities under Aid for Trade in joint sessions of the CTE and CTD , particularly as 
concerns assistance to LDCs to comply with product -related standards . For example, the European 
Union is funding a project with the International Trade Centre (ITC) that aims to support developing 
countries ' engagement in environment work in the WTO through capacity - and knowledge -building, 
and facilitating the preparation  of their submissions.  
21.  Finally , the CTE could further strengthen coordination  with other relevant committees such as 
the Technical Barriers to Trade (TBT) Committee, the Sanitary and Phytosanitary (SPS) Committee, 
the Subsidies and Countervailing Measures  Committee and the Committee on Agriculture.  
2.3  Trade and inclusiveness  
22.  The WTO is facing increased calls for a more inclusive multilateral trading system. A first part 
of the response must be to ensure the centrality of the development dimension in WTO refor m, 
across the three functions of the organisation. The EU also believes that an important objective 
should be to reinforce the role of the Committee on Trade and Development (CTD) as a forum to 
deliberate on current development challenges as well as to mor e effectively mainstream 
development related issues in the work of different WTO committees.   
23.  But the question of inclusiveness is broader. In the view of the European Union, there are two 
further key dimensions to the debate on inclusiveness: first, impro ving the understanding of how to 
achieve inclusive outcomes of trade liberalisation to spread the gains from trade more widely within 
societies; and second, strengthening the inclusiveness of the trade -policy making process itself in 
order to incorporate a ll necessary perspectives.  
Promoting inclusive outcomes  
24.  Inclusiveness is critical to maintain support for open trade. While ensuring the equitable 
distribution of the gains of market opening is essentially a domestic responsibility, the WTO should 
not igno re the policy relevance of these debates. For trade to be seen as part of the solution to 
current economic and social challenges, the European Union sees the need for the WTO to increase 
deliberation on inclusiveness and the social dimension of trade liber alisation4. This would deepen 
understanding  and lead to more informed and inclusive policy outcomes to expand the 
opportunities from trade in the different Member countries.  
25.  The European Union proposes that the WTO provides a forum to underpin this debat e with 
background work by reinvigorating its cooperation with the World Bank and the ILO. This could 
include undertaking joint analysis5 on the distributional impacts6 of trade  (e.g. effects on wages 
 
4 The Marrakesh Agreement establishing the WTO recognises in its preamble that trade cooperation be 
conducted with the ultimate objective of "raising standards of living " and "ensuring full employment ". 
5 See WTO and ILO joint study  "Investing in Skills for Inclusive Trade ", 2017.  
6 See World Bank report "The Distributional Impacts of Trade. Empirical Innovations, Analytical Tools, and 
Policy Responses ", 2021.  WT/GC/W/864  
 
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  and employment, labour market outcomes, impacts on dif ferent sectors, regions and types of 
workers etc.). Work should also aim to provide analysis and insights on how to expand the 
opportunities from trade, focusing on how to better integrate  developing countries into global 
and sustainable supply chains and achieve increased diversification, paying particular attention 
to those countries most in need. This work should also include the gender dimension of inclusiveness.  
26.  The General Council could provide a forum for thematic discussions on different aspects of  the 
inclusiveness agenda based on reports prepared by the WTO in cooperation with other international 
organisations. The TPRM also provides an opportunity for Members to share experiences on domestic 
efforts and the promotion of corporate social responsib ility to spread the benefits of trade and 
promote inclusiveness.  
Inclusiveness of trade policy -making processes  
27.  As part of the discussion on inclusiveness, Members should also address the capacity 
constraints faced by some developing countries in participa ting in WTO deliberations and allow 
them to shape the agenda in areas of relevance and interest to them. To this end, a review of 
existing technical assistance and capacity -building needs  for effective participation in the WTO 's 
activities  could take place.  
28.  As an organisation, there have also been demands for the WTO to strengthen the  inclusiveness 
of the  trade policy -making process  itself by bringing in broader perspectives and concerns to 
address today 's agenda. While the WTO 's Marrakesh Agreement ex plicitly recognises the role that 
non-governmental organisations (NGOs ) can play in its activities, there is scope for enhancing 
engagement with external stakeholders .7 Practices and the level of engagement with external 
stakeholders currently vary across  different WTO committees, bodies and negotiations. Building on 
the useful experience with stakeholder involvement in thematic meetings of the TBT Committee or 
the early phases of Structured Discussions and Joint Statement Initiatives (JSIs) to help inform  the 
policy debate and support evidence -based discussions, it is proposed to broaden engagement with 
external stakeholders and  experts  in informal seminars and workshops.  To bring in business 
expertise and workers ' perspectives that would be relevant acros s the work of the organization, a 
standing WTO  consultative committee  with balanced representation of business, labour and civil 
society could be considered.  
3  CONCLUSION  
29.  A reinforced deliberating function is critical to enhance the WTO 's ability to respond to the global 
challenges that have an impact on the trading system. The three areas for reinforced deliberation 
suggested in this paper are by no means exhaustive and should be seen together with other 
initiatives. These include for instance a reinforced e -commerce work programme that helps countries 
to address the challenges of regulating the digital economy and contributes through capacity building 
to bridging the digital divide. The European Union looks forward to further discussing in the General 
Counci l and its subsidiary bodies how to make progress on these initiatives by MC13.  
 
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7 The main channels of engagement so far are the annual Public Forum, attendance of civil society at 
Ministerial Conferences, the Trade Dialogue series  and briefings by the WTO Secretariat to specific, registered 
NGOs.  