WTO chief calls for structural changes amid Appellate Body impasse

Roberto Azevedo, director-general of the World Trade Organization (WTO), on Tuesday called for political leadership to modernize the multilateral trade institution amid the continued impasse over its Appellate Body.

"The multilateral trading system is worth keeping, but that does not mean keeping it as it is. There are areas where it could improve, where it must improve," Azevedo said here at a conference hosted by the Washington International Trade Association.

"In fact, some of the unconventional policies and bilateral arrangements we see today might never have arisen had we done more to update the system. The impasse on dispute settlement is a case in point," he said, adding that many members were dissatisfied with different aspects of how the Appellate Body was operating.

The Appellate Body, the de facto court of appeals at the WTO, has been unable to hear any new cases since Dec. 11, 2019, because it only has one judge left due to a repeated blockage of the nomination of its members by the United States.

"It is my hope that members will use the current crisis to produce an improved two-step appeals process," said the director-general.

Noting that change in multilateral institutions is often difficult, Azevedo called for political leadership and involvement to push for structural changes at the WTO.

"Technical experts sitting in Geneva cannot do it themselves. We need political leadership and involvement. It's either this, or we prepare to pay for the consequences," he said, warning that lack of predictability in trading conditions would lead to slower economic growth.

"Without predictability, growth and job creation would be slower and more fragile than they would otherwise have been. Investment and consumption decisions would be postponed, many of them indefinitely," said the WTO chief.

While the WTO is facing several challenges, Azevedo stressed that WTO members are once again advancing on multiple fronts, including negotiations to curb fisheries subsidies and the potential for new rules on investment facilitation, e-commerce and domestic regulations of services.

"Looking ahead, I am sure that WTO members are ready for change. They want to improve the system we have -- not throw it away and attempt to start from scratch," he said.