Multilateralism has been at the core of global trade governance since the end of World War II. The multilateral trading system, first under the General Agreement on Tariffs and Trade (GATT) and subsequently in the World Trade Organization (WTO), has managed to increasingly integrate countries’ economies over time and tempered unilateral approaches to international trade. The WTO also has an effective Dispute Settlement System and has recently shown that it can deliver multilateral results, namely the 2013 Trade Facilitation Agreement and the 2015 Nairobi Package. The WTO, however, has failed to conclude the 2001 Doha Development Round of trade negotiations and has been unable to address new trade issues that have arisen since its creation in 1995. This has led many countries to pursue bilateral, regional and plurilateral trade agreements outside the multilateral framework. The worldwide rise of protectionism also threatens the WTO’s objective of free trade. This is exemplified by the election as United States President of Donald Trump, who has called the WTO ‘a disaster’ and whose policies could severely undermine WTO legitimacy. The EU nevertheless continues to strongly support the multilateral trading system, as it benefits from the WTO’s rules-based system that supports free trade. At the same time, the EU views bilateral, regional and plurilateral agreements as complementary approaches to the WTO and is thus actively pursuing agreements along both avenues. Finally, the EU is also actively involved in settling disputes before the WTO, including with the USA. The European Parliament has expressed its support for this approach.
Source: European Parliament Think Tank