The EU needs the WTO now more than ever

Translated by Gaia Baraldi

The European Union has once again shifted its focus to the debate on World Trade Organization (WTO) reform, bringing an issue that has remained unresolved for years back to the center of the international agenda, now taking on a new urgency. Pushing Brussels toward this position is a growing perception of asymmetries in global trade, particularly linked to the rise of Chinese exports and the difficulties of the multilateral system in managing such imbalances.

The European Commission has called for a “serious reform” of the WTO to address what is perceived as a growing influx of low-cost products into the European market, often supported by state-led industrial policies that are difficult to frame within current rules. This position reflects a growing concern among member states that the global trading system, as it currently exists, is no longer fully capable of ensuring fair competition. The crux of the problem lies precisely in the structural limitations of the WTO, which was created in a vastly different economic context and now struggles to adapt to a world characterised by geopolitical competition, massive state intervention and new forms of industrial capitalism. In particular, the EU challenges the idea that some countries can benefit from the advantages of the multilateral system (such as reduced tariffs and market access) without offering an equivalent level of internal openness.

In recent days, European officials have emphasized that the principle of the most-favoured-nation should be reconsidered in light of global economic transformations. In other words, privileged access to European markets should be conditional upon genuine reciprocity, introducing a more dynamic dimension into international trade rules. Lately, the EU has gradually abandoned a purely liberal approach to adopt a vision more focused on economic security and the protection of its industries, in which the call for WTO reform is thus incorporated not only as a response to external dynamics, but also as a European internal priority.

At the same time, this highlights a structural inconsistency between two seemingly conflicting objectives: on the one hand, the desire to preserve multilateralism as a pillar of the global economic order, on the other, the need to adapt this system to new realities, even at the cost of profoundly changing its rules. The EU thus finds itself trying to reform the WTO without further weakening it.

Negotiations are progressing slowly, hampered by differing visions among major powers and the lack of consensus on key issues such as the role of state subsidies, the transparency of industrial policies, and the functioning of the dispute settlement system. All of this directly threatens the relevance of the organization itself, to the benefit of bilateral or regional agreements (as recently seen with the EU–Mercosur trade agreement).

For the European Union, the WTO continues to be the primary multilateral system guaranteeing stability and predictability, even though it is increasingly clear that without significant reform, it risks being unable to meet the needs of the contemporary global economy.
The issue of Chinese exports only serves to add another layer of complexity to the situation, particularly given the increase in production capacity in key sectors and the existence of strong state-led industrial policies that call into question the balance of the trading system. For European bureaucrats, reforming the WTO means not only defending their own industries but also redefining the rules of the game globally. It is also part of a broader strategy in which the European Union seeks to assert a more active role in international economic governance. This is not simply about reacting to existing dynamics, but about contributing to shaping a new balance between market openness and the protection of strategic interests in a highly technical and political test.

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