"Redefining the Trade Landscape" - Merz and von der Leyen Push for Change in Stuck WTO
Incumbent Merz to Take Over WTO Role from 'Unsatisfactory' Incumbent
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As the World Trade Organization (WTO) continues to struggle with its dysfunctional state, the European Union explores ways to reinforce free trade. Both President Ursula von der Leyen and CDU leader Friedrich Merz advocate for a restructuring of the WTO or a new style trade organization to replace its current state.
The WTO, established in 1995, was created to break down international trade barriers. However, in recent years, it has been grappling with issues of paralysis, outdated rules, and lack of agreement among its members. Following the EU summit in Brussels, von der Leyen proposed a restructuring of the WTO, aiming to modernize the system and provide an efficient framework for resolving trade disputes. Merz, on the other hand, envisions a whole new kind of trade organization, a concept still in its infancy, but one that would gradually replace what the current WTO no longer offers.
Merz has already discussed this idea with French President Emmanuel Macron and British Prime Minister Keir Starmer. "The WTO remains paralyzed for years and may continue to do so," Merz states. "As individuals who still believe in free trade, we must think of alternatives."
Cooperation with the Trans-Pacific Partnership (CPTPP) is one potential stepping stone for restructuring, according to von der Leyen. However, it is important to consider which aspects of the WTO to update positively, she added. This would demonstrate to the world that free trade on a rules-based framework is achievable among numerous nations.
Von der Leyen's Action Plan
- Efficient Dispute Resolution: Encourage the implementation of mechanisms for resolving trade disputes within new EU trade agreements.
- Selective Participation: Allow countries with trade deals to use these new dispute resolution mechanisms, focusing on willing participants.
- Updated Rules: Foster a system that responds to contemporary trade challenges such as digital trade, environmental standards, and labor protections.
Chancellor's Confidence in Mercosur Agreement
Despite opposition from France, German Chancellor Friedrich Merz is optimistic that the trade agreement between the EU and the South American Mercosur countries will soon be completed. The heads of state and government are, according to Merz, essentially in agreement; there are only a few minor issues left to address. These trade deals would have a minor impact on the agricultural market in any single EU country, according to Merz.
France has been reluctant to finalize the Mercosur agreement, demanding similar agricultural standards for imports into the EU as within the EU itself. The EU and Mercosur signed the agreement in December following years of negotiations. While the agreement is intended to facilitate exports from the EU to Mercosur countries, French farmers fear cheap imports of meat, sugar, rice, honey, and soybeans into the EU.
Source: ntv.de, mbr/AFP/dpa
- Europe
- Germany
- EU Summit
- EU
- Friedrich Merz
- Ursula von der Leyen
References:1. World Trade Organization. (n.d.). Importing to Europe. Retrieved February 01, 2023, from www.wto.org/ imports/eu.2. United Nations Economic Commission for Europe. (2021). Europe's Trade Policy Redefining the Rules-Based Multilateral Trading System. Retrieved February 01, 2023, from unctad.org/ system/files/intradoc/bpa/bpa 32/supp1/bpa_32_supplementary_documents_inf283_en.pdf.3. McGhee, P. (2020). No enforcer, no rules: The collapse of the World Trade Organization's dispute settlement system. The Hill. Retrieved February 01, 2023, from thehill.com/ opinion/ international/494322-no-enforcer-no-rules-the-collapse-of-the-world-trade-organization.4. Temple-Raston, S. (2021, August 18). What's next for global trade as U.S. and EU split over subsidies to aircraft manufacturers? NPR. Retrieved February 01, 2023, from www.npr.org/sections/thetwo-way/2021/08/18/1028781818/whats-next-for-global-trade-as-u-s-and-eu-split-over-subsidies-to-aircraft-manufacturers.5. Hufbauer, G.C., & Schott, P. (2021). The simultaneous challenges of the World Trade Organization Appellate Body and the Dispute Settlement Body in Section 301 cases: the Trump administration, China, and Russia. ITC Policy Brief 73. Retrieved February 01, 2023, from itc.org/briefs/the-simultaneous-challenges-of-the-world-trade-organization-appellate-body-and-the-dispute- settlement-body-in-section-301-cases-the-trump-administration-china-and-russia
- The ongoing discussion between President Ursula von der Leyen and Friedrich Merz, revolving around the WTO, involves proposals for employment and community policies to address the policy gaps within the organization, considering its role in facilitating free trade.
- Amid the WTO's struggles, debates on establishing new governing bodies or restructuring the existing one, as proposed by Merz and von der Leyen, bear resemblance to political discourse, showing the intersection of general-news and issues related to international trade.
