The European Union and the World Trade Organization

The World Trade Organization (WTO) works to guarantee a rules-based international trading system. Despite the impasse in trade negotiations, ways to modernise WTO rules and address new global challenges are being explored. Under the Lisbon Treaty, Parliament legislates jointly with the Council, has to approve any changes or new WTO agreements and has an important scrutiny role on international trade policy.

In the early decades of the 20th century, trade issues prompted countries to engage in increasingly complex interactions, creating the need for a platform to facilitate and regulate trade relations. The resulting 1947 General Agreement on Tariffs and Trade (GATT) not only provided a round-table discussion forum, creating a multilateral approach to trade, but also established a system of internationally recognised rules on trade. The underlying idea was to create a level playing field for all members through the ‘substantial reduction of tariffs and other barriers to trade and the elimination of discriminatory treatment in international commerce’[1].

As international trade moved beyond the exchange of tangible goods to include services and ideas, the GATT was transformed and institutionalised as the World Trade Organization (WTO). It was established in 1995 as a result of the Uruguay Round of trade negotiations and it incorporated earlier trade agreements, such as the GATT itself, the Agreement on Agriculture and the Agreement on Textile and Clothing, as well as other general agreements. The most significant new agreements were the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). In February 2017, the Trade Facilitation Agreement – the first multilateral agreement completed since the WTO was created – entered into force. In 2022, after having been postponed twice due to the restrictions resulting from the COVID-19 pandemic, the 12th Ministerial Conference in Geneva reached an agreement on fisheries subsidies and an amendment to TRIPS for COVID-19 vaccines. In order to keep up with recent developments in a rapidly changing trade environment, the 13th Ministerial Conference (MC13) in Abu Dhabi (United Arab Emirates) in 2024 set out a forward-looking reform agenda, including a renewal of the commitment to establish a fully and well-functioning dispute settlement system by 2024 and to improve use of the special and differential treatment provisions for developing and least developed countries (LDCs), which currently form two thirds of the WTO membership.

The trade dispute settlement mechanism

One of the WTO’s most important achievements has been to consolidate its Dispute Settlement Body, which has the power to rule on trade disputes and to enforce its decisions. This dispute settlement mechanism works on the basis of predefined rules enabling WTO members, regardless of their political weight or economic clout, to lodge complaints over alleged breaches of WTO rules and to seek reparation. This mechanism has led to a reduction in unilateral defence measures, to which countries previously resorted and which often provoked retaliation by the countries targeted, at times leading to fully fledged trade wars.

So far, the WTO dispute settlement system has served to guarantee that stronger members do not prevail over weaker ones and has provided clear rules on retaliatory measures. However, the Appellate Body is now effectively defunct as its members have reached the end of their mandates and vacant positions have not been filled. To overcome this situation, the EU and its Member States, together with 25 other WTO members, have started an initiative for an alternative mechanism called the multi-party interim appeal arrangement (MPIA), consisting of 10 arbitrators who will hear appeals of WTO panel reports under the MPIA.

Since the creation of the WTO, the EU has been one of the biggest users of its dispute settlement system. Between 1995 and 2022, the Union was involved in 203 dispute settlement cases, 110 as complainant and 94 as defendant[2]. In 217 other cases, it has requested third-party status, which allows WTO members to monitor disputes involving other parties. The EU, which is represented by the European Commission, has also often sought to improve and clarify WTO agreements by requesting rulings from its panels and its Appellate Body.

The European Parliament closely monitors the evolution of disputes involving the EU. Parliament’s Committee on International Trade presents its views on trade disputes through reports, public hearings, and oral questions to the Commission and the Council.

The Doha Round and beyond

Since 2001, the WTO’s members have been engaged in a broad round of multilateral trade negotiations known as the Doha Round, or Doha Development Agenda (DDA), the main goal of which is to place development at the heart of the world trade system. The Doha talks seek to give developing countries an increasing role and to strengthen their capacity to benefit from international trade and help them combat poverty.

The DDA was based at the outset on the principle of a ‘single undertaking’[3], and is still open.

Although the EU supported the launch of a broad and ambitious round, the negotiations have stalled over major issues, mainly related to market access. The most significant differences are between the positions of major emerging countries and those of industrialised countries or blocs concerning the way the international trading system should be reshaped.

At the 11th Ministerial Conference in December 2017, like-minded groups of WTO members issued joint statements on advancing discussions on e-commerce, on developing a multilateral framework on investment facilitation, on launching a working group on micro, small and medium-sized enterprises (MSMEs) and on advancing ongoing talks on domestic regulation of trade in services. These plurilateral negotiations of the joint statement initiative are open to all WTO members.

At the 12th Ministerial Conference in June 2022, a historic agreement on ending unsustainable fisheries subsidies was reached, after over 20 years of negotiations. This is the first ever multilateral agreement focused on sustainability and the first new WTO agreement since 2013. The agreement is a crucial step in ensuring that fisheries subsidies pursue sustainability as their core objective and avoid harming oceans and fish stocks, as these are indispensable for the livelihoods of coastal communities around the world.

At the 13th ministerial meeting (MC13) from 26 February to 1 March 2024 in Abu Dhabi, members tried to revitalise the WTO at a time of rising geopolitical tensions through negotiations on a comprehensive agreement on global fisheries subsidies, agriculture reform, and meaningful progress on dispute settlement. However, some members blocked progress on agriculture and on the adoption of a text to fulfil the mandate set by UN Sustainable Development Goal 14.6 to ban harmful fisheries subsidies worldwide, complementing the agreement reached in 2022. On the positive side, members at MC13 committed to taking specific next steps towards a reform of the WTO, including restoring a fully functioning dispute settlement system by the end of 2024.

In February 2024, the joint statement initiative on a domestic regulation for services became binding for 45 members. The joint statement initiative negotiations on the Investment Facilitation for Development (IFD) were also successfully concluded in February 2024, and are supported at present by 120 proponents, which are mainly developing countries and LDCs. This initiative aims to develop a global IFD agreement to improve the investment and business climate and make it easier for investors in all sectors of the economy to invest, conduct their day-to-day business and expand their operations. The next step will be to incorporate this agreement into the WTO rulebook. This will require a decision by consensus, which some members still oppose. Finally, an agreement was reached at MC13 to extend the moratorium on customs duties on e-commerce until the next WTO Ministerial Conference.

Following the EU’s initiative, most members reiterated their solidarity with Ukraine.

The Parliamentary Conference on the WTO, co-organised by the European Parliament and the Inter-Parliamentary Union, regularly offers an opportunity for constructive participation (see below for more information on this conference). On several occasions, Parliament has called for negotiations to resume, emphasising the importance of the Doha Round for world trade and economic development.

Parliament has also been closely associated with negotiations for more limited agreements, such as the ongoing negotiations on e-commerce. It attends the WTO Ministerial Conferences, as part of the EU Delegation.

The EU and the WTO

The EU has played a central role in developing the international trading system since World War II. Currently, the EU is exploring the possibility of modernising the WTO[4].

Like the GATT (and later the WTO), the EU was itself originally designed to remove customs barriers and promote trade between its Member States. The EU single market was partly inspired by GATT principles and practices. The Union has always been among the main promoters of effective international trade based on the rule of law. Such a system helps ensure that its businesses enjoy fair market access abroad, and thus supports economic growth, both domestically and in third countries, particularly less developed ones.

The EU’s common commercial policy is one of the areas in which the Union as such has full and exclusive competency. In other words, the EU operates as a single actor at the WTO and is represented by the Commission rather than by the Member States. The Commission negotiates trade agreements and defends the EU’s interests before the WTO Dispute Settlement Body on behalf of all 27 Member States. The Commission regularly consults and reports to the Council and Parliament on the content and strategy for the multilateral discussions. Under the Lisbon Treaty, the Council and Parliament are co-legislators with an equal say on international trade matters.

Through the WTO, the EU has also sought to promote a multilateral framework for trade negotiations, intended to complement bilateral negotiations. However, the stalemate in the Doha Round and the fact that other trading partners have turned to bilateral agreements have compelled the EU to partly reconsider its long-standing strategy and return to regional and bilateral negotiations.

The current impasses at the WTO are also a sign that the international trading system has changed dramatically in the past 30 years. The system has evolved, with new actors – essentially transition and developing countries – playing a central role. The liberalisation of the international trading system has benefited some developing countries, which have experienced an unprecedented phase of sustained economic growth. The EU is well aware of these new dynamics. It has pointed to the need to move beyond the negotiation approach of the past years and try innovative approaches to address the increased importance of regulatory issues, as compared to tariffs. In February 2023, the EU proposed three key areas for focused deliberation at MC13, namely trade policy and state intervention to support industries, trade and global environmental challenges, and trade and inclusiveness.

The Parliamentary Conference on the WTO

The Parliamentary Conference on the WTO is jointly organised by the European Parliament and the Inter-Parliamentary Union (IPU) and is intended to strengthen democracy internationally by bringing a parliamentary dimension to multilateral trade cooperation.

The first formal meeting of parliamentarians at the WTO dates back to the December 1999 WTO Ministerial Conference held in Seattle. In 2001, Parliament and the IPU agreed to pool their efforts and sponsor a parliamentary meeting during the WTO Conference in Doha. This meeting laid the foundations of what has become the Parliamentary Conference on the WTO.

This conference provides a forum in which parliamentarians from all over the world exchange opinions, information and experiences on international trade issues. Participants monitor WTO activities; promote the effectiveness and fairness of the WTO; advocate transparency in WTO procedures; work to improve the dialogue between governments, parliaments and civil society; influence the direction of discussions within the WTO; and build up national parliaments’ capacity in international trade matters.

The Parliamentary Conference on the WTO meets during WTO Ministerial Conferences and sometimes in between. The Parliamentary Conference last met on 24 and 25 February 2024, ahead of the MC13.


[1]GATT Agreement (1947), introductory paragraph.
[2]Figures as of 1 April 2024, WTO website.
[3]The ‘single undertaking’ principle essentially means that ‘nothing is agreed until everything is agreed’.

Wolfgang Igler