WTO Deputy Director-General Says WTO Is Evolving to Meet the Moment
Anabel Gonzalez, one of the World Trade Organization's deputy directors-general, said in a farewell column that although progress is being made on improving the WTO, "governments face some tough choices in the months and years to come to deal with pressing matters that, if left unchecked, could seriously erode the multilateral trading system and damage trade as an engine of growth and prosperity."
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Gonzalez, who served as a DDG for a little more than two years, said the WTO is adapting to today's challenges. "Discussions to make the WTO's deliberative function more effective and efficient are underway, with dedicated conversations planned on issues such as industrial policies and serious reflection on how to deepen and improve existing dialogue on trade and the environment and on the needs of developing countries," she wrote Aug. 3. "The road ahead will continue to be bumpy, but the future lies in gradual evolution, not revolution."
Gonzalez warned that if the dispute settlement function of the WTO is not revived, and there's not agreement on how to manage "the negative spillover effects of rising subsidies and the increased use of the national security exception to explain trade actions," those problems could erode confidence in the WTO. She added: "Dealing with diverging approaches to trade measures aimed at combating climate change is also key."
She didn't mention the EU, but its looming carbon border adjustment mechanism could hit U.S. exporters, since the U.S. doesn't have a national price on carbon.
Gonzalez challenged the message that comes from the Office of the U.S. Trade Representative, though she did not name the U.S. as a party that argues that the pandemic and the war in Ukraine revealed "vulnerabilities arising from trade specialization." The administration says friendshoring is the answer to that problem; Gonzalez said those with this view think "countries are better off rolling back global supply chains and producing what they need at or close to home."
She said the facts don't support that view, since transportation costs and manufacturing activity "have largely returned to normal, suggesting that the main driver of supply chain pressures was a pandemic-induced surge in demand for durable consumer goods rather than any deep, structural flaws in global production networks."