The European Commission also reaffirmed its support for the WTO as a multilateral trade platform and urged updates to the ‘rule book' on international trade, a press statement said.
READ MORE: G20 Trade Ministers Reach Consensus on WTO Reform — Argentine Envoy
"Now the WTO system is slowly grinding to a halt. It is probably in its deepest crisis ever," EU trade chief Cecilia Malmstrom said at a news conference. "Key members are not supporting the system but opening unilateral measures with effects we unfortunately know too well."
Malmstrom also said that the multilateral trading system had a provided stable and predictable framework to companies for many decades, adding that "the WTO is indispensable in ensuring open, fair and rules-based trade."
However, she lamented that the WTO had not been able to sufficiently adapt to changes in the global economy. "The world has changed, the WTO has not," she stated.
"It's high time to act to make the system able to address challenges of the today's global economy and work for everyone again", she continued, urging the EU to take a greater role achieving reforms.
We are proposing ideas to modernise the @WTO and to make international trade rules fit for the challenges of the global economy.
— European Commission 🇪🇺 (@EU_Commission) September 18, 2018
Follow the statement by Commissioner @MalmstromEU on WTO reform and the Alliance for Torture-Free Trade ↓ #EUTrade https://t.co/zwFUN2tnTo
The Commission's concept paper proposed three key WTO reforms such as new rulemaking and development approaches, greater transparency, and modernized dispute settlement arrangements.
The proposals accuse the WTO of remaining "blocked by an antiquated approach to flexibilities" which give preferential treatment to two-thirds of the blocs' members. It also noted that the WTO's monitoring function was "crippled by ineffective and repetitive committee procedures" based on insufficient transparency. It also said that geo-strategic developments were compounding problems.
READ MORE: India Defers Retaliatory Trade Measure Against the US
It also claimed that updating global trade rules should combat coerced technology transfers and industry subsidies, but should adapt to other markets such as e-commerce. It also recommended better monitoring protocols and give the organization the power to punish "willful" non-compliant members. The EU also proposed ways to overcome deadlocked WTO trade disputes, where the United States blocked appointments to the appeals chambers that settle them.
By the end of September, the seven-member appeals chamber will be reduced to three judges, the minimum requirement, Reuters mentioned. However, this remains on a "cliff edge" when two more judges will leave in December 2019, one Commission official stated.
The WTO is an agreement between 164 member states, where each state has vetoing powers, crippling reform efforts in recent history.
President Trump has criticized the power of WTO judges and has accused China of ‘unfair' trade practices. President Trump also threatened last month to withdraw from the WTO, an instrument the US signed in 1994 to replace the 1948 General Agreement on Tariffs and Trade (GATT).
However, Malmstrom has sided with Beijing, urging China to drive WTO reforms as the country has benefitted the most from the organization.
READ MORE: China Concerned US Could Pull Out of WTO Deal, Cutting Tariffs on Tech Goods
President Trump's unilateral trade war has upset international trade, with many senior trade official scrambling for a solution. Members will reconvene this week to address further proposals before heading to Ottowa next month.
Argentinian ambassador to China Diego Ramiro Guelar said at a Buenos Aires-based WTO meeting on Saturday that trade and commerce ministers reached a full consensus to reform the WTO.
